Indian Journal of Economics July 1948

3. The criticism of Veblen4 and others is mainly based upon (i) the refutation of the universally operating diminishing utility (ii) the impotance of the margin and (iii) the assumption of relation between utility curves and the negatively sloping demand curves and the resultant putative effects of such assumption upon price determination. [...] The marginal utility of money is the derivative of the utility function and depends only on the nature of the function i.e. [...] What the philosopher has not observed is that this so-called customary price presented to one generation is itself the result of the continued interaction of the forces of demand and supply and the changes in the value of the numeraire (in terms of which the price is measured) commencing perhaps from the times of Adam and Eve. [...] The marginal rate of substitution of X for Y is the quantity of Y which would just compensate the consumer for the loss of a marginal unit of X." This marginal rate of substitution replaces the concept of marginal utility in the theory of consumer's choice. [...] Hence the attempt made by Hicks to build an economics free 9 In the year 1943 the author of this paper communicated in a note to the Current Science that the introduction of the concept of consumption function and allied concepts would be an alternative method and that it would also fill the lack of symmetry in the theory of consumption in not having a consumption function corresponding to the p