CHAPTER II -- THE LAW OF CONSUMER'S DEMAND

[My apologies for the gap in posting.  I hope to get back on a more regular schedule.]

In Section 1 of this chapter Hicks discusses Marshall's deduction of the downward slope of the demand curve from the law of diminishing marginal utility.  A critical step in Marshall's reasoning is apparently his assumption that the marginal utility of money is constant.  This assumption would imply that an individual's demand for any commodity is independent of his income.  Hicks has (in my opinion) a fairly charitable attitude toward this assumption, namely that "it is in fact an ingenious simplification, which is quite harmless for most of the applications Marshall gave it himself.  But it is not harmless for all applications..." and Hicks intends to make things clearer in the coming sections about how demand actually does interact with prices and  income.

This section has an example of something that Hicks is prone to do occasionally -- stating something fairly deep and non-obvious as though it were obvious.  In a footnote to the sentence about Marshall's assumption that the marginal utility of money is constant, he states "This, of course, abolishes any distinction between the diminishing marginal utility of a commodity and the diminishing marginal rate of substitution of that commodity for money."  The reader may be forgiven for thinking, "'of course'?"