Julius Friedrich Gans von Ludassy: Review of Untersuchungen über die Theorie des Preises (1890)

Julius Friedrich Gans von Ludassy’s 1890 review of Rudolf Auspitz and Richard Lieben’s Untersuchungen über die Theorie des Preises combines emphatic endorsement with a sustained reconstruction of the book’s argument. He regards its 555 pages as an exceptionally comprehensive attempt to formulate economic theory mathematically. The difficulty of the undertaking is offset by the authors’ precision:

Ihre Ausdrucksweise ist klar, kurz, gedrungen und bündig, nirgends eine Verschwommenheit, nirgends eine Zweideutigkeit.

English translation: Their mode of expression is clear, brief, compact and concise; nowhere a vagueness, nowhere an ambiguity.

For Ludassy, formal rigor need not entail estrangement from economic life. He values the authors’ attentiveness to reality and their refusal to subordinate it to theoretical constructions. His exposition makes their conceptual progression accessible while acknowledging what it omits:

Es liegt auf der Hand, dass wir dabei auf die Erläuterung durch Figuren verzichten und demgemäss auch das mathematische Element auf sein nothwendigstes Maass beschränken müssen.

English translation: It is obvious that in doing so we must forgo elucidation by means of diagrams and must accordingly also restrict the mathematical element to its most necessary measure.

The methodological argument connects economic disagreement with partisan interests and inadequate methods. Its proposed remedy is to isolate causal relationships under abstract assumptions, then progressively modify those assumptions to approach reality. The theoretical economist’s procedure is therefore reconstructive:

Er muss mit seinen Vorstellungen in eine abstracte Welt flüchten, dann aber durch allmälige Aenderung seiner Annahmen der Wirklichkeit wieder nahe zu kommen suchen.

English translation: He must take refuge with his conceptions in an abstract world, but must then seek to approach reality again through gradual alteration of his assumptions.

A crucial step moves from feelings that cannot directly be measured or compared between people to marginal choices that supply a monetary measure. The last portion of a good someone is just willing to purchase has, for that person, the same value as its price. Ludassy situates the authors’ account of price through marginal utility and marginal cost within a lineage encompassing Gossen, Jevons, Menger, Wieser, and Böhm-Bawerk. Price theory has broad significance because rent, interest, and wages likewise involve price determination.

The reconstruction begins with a large market in stable equilibrium, known prices, free competition, and individuals arranging production and consumption to maximize satisfaction. Satisfaction extends beyond monetary gain to intellectual pleasures, charity, and public spirit. From aggregate cost and utility curves, the authors derive supply and demand curves. Their intersection determines annual quantity and monetary turnover; the ratio between these magnitudes gives price. Production and consumption gains lead to Gemeinnutzen, the excess of utility over production costs. Individual curves are then related to their aggregates.

Ludassy emphasizes a classification of goods according to how increased supply affects sales, prices, and turnover. Luxury goods exhibit comparatively large increases in quantities sold with small price reductions. Widely consumed goods such as meat, sugar, and ordinary household articles occupy an intermediate position. Salt and other goods near consumption limits show sharply falling prices with little expansion of sales. This analysis opens onto wealth distribution, custom, social position, monetary valuation, and taxation.

The next step examines optimal adjustment itself. By imagining individuals who persist in a particular mode of production or consumption, the authors construct curves for fixed arrangements. Combining these yields curves for the most advantageous arrangements and establishes their convex or concave form. Adjustment can also be discontinuous: at certain prices, individuals move directly from a smaller to a substantially larger annual quantity, bypassing intermediate quantities that would never be advantageous.

The consumption analysis treats utility as dependent on the surrounding economic situation, not as an isolated property of a commodity. The utility of a given annual quantity depends on simultaneous provision with other goods, including food, clothing, heating, and housing. For each quantity, the optimal consumption combination defines a level of Lebensgenuss. Its difference from the satisfaction attainable without the article defines that quantity’s utility. A numerical measure thus presupposes given prices for other goods and depends on both the commodity and the consumer’s individuality.

Ludassy follows the remaining expansion more briefly: from consumers to producers and inventory holders, then speculation, securities, durable goods, intermediary trade, individual objects, monopoly, competition, international exchange, duties, and taxes. Four mathematical appendices conclude the reviewed book. The review presents this widening apparatus as disciplined abstraction anchored in economic conduct. Its endorsement rests chiefly on formal clarity, explanatory reach, and substantive richness, rather than on detailed critical testing of the authors’ results.