The industry supply curve: Two different traditions

Abstract

The present paper seeks to provide some new insights into the precise nature and the analytical foundations (or lack of them) of the familiar industry supply curve. We reconsider some fundamental phases of its historical evolution. Two different traditions are distinguished: one consists of the formalisations of Marshall's theory proposed by Barone and, later, by Pigou, Viner, Harrod and Robinson; the other consists of the models of Hicks and Allen, on the basis of ideas and criticism put forward by other London School of Economics scholars, like Kaldor and Robbins, in the mid-1930s. It is argued that the second tradition did not really remedy the weak aspects of the Marshallian theory of supply.