Marx, Capitalism, and Neoclassical Economics | Steve Keen | Escaped Sapiens #65
The Escaped Sapiens Podcast
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Neoclassical Economics and Diminishing Marginal Utility
Neoclassical economics, also known as mainstream economics, focuses on microeconomics which analyzes how individuals behave as consumers and how firms behave as producers. It is based on the concept of firms trying to maximize profits and consumers trying to maximize subjective utility. This theory includes the idea of diminishing marginal utility, where as consumers buy more units of a commodity, the extra utility gained from each additional unit diminishes. The utility is subjective, based on how comfortable or satisfied the consumer feels, rather than an objective definition.
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