Marginality Economics Definition

This concept of marginal utility was later used to derive the laws of supply and demand as we know them, and its application to all areas of economics swept the profession, replacing the labor theory of value and other older ideas. Since economics is essentially the science of how people use and value economic goods to realize their unlimited wants and needs with limited and scarce resources, marginal thinking is pervasive in all areas of economics. We define marginality as “an involuntary position and condition of an individual or group on the margins of social, political, economic, environmental and biophysical systems that deny them access to resources, assets and services, restrict freedom of choice, impede skills development and ultimately cause extreme poverty” (Gatzweiler et al. 2011, 3; see also Gatzweiler and Baumüller Kap. 2 of this volume). The perspective of marginality includes the poor who are below certain thresholds and outside established human socio-economic and geographical systems, where improved access to rights, resources and services would contribute to ensuring a decent standard of living. For biological systems, marginality describes the state of organisms outside the optimal homeostatic ranges necessary for living systems (Damasio 2011; see also Callo-Concha et al., chapter 4 of this volume). The concept of marginality facilitates understanding of the underlying systemic contributions of poverty and exclusion, which can overlap with the lack of resources and opportunities needed to achieve desired living conditions. Although the approach to income poverty is easy to conceptualize and measure (in its simplest form, the employee rate counts the proportion of people living below a certain poverty line), it has been criticized for not referring to various concepts of individual needs “or an agreed definition of what it means to be poor” (Gordon et al., 2000, 8). Relative deprivation (RD) is based on the idea that the value of objective circumstances depends on subjective comparisons (Townsend, 1979; Stark and Bloom, 1985; Walker and Smith, 2002; Wilkinson and Pickett, 2007; Stark et al., 2011).

The concept of rural development adds a whole new dimension to the concepts of absolute poverty, as it refers to the circumstances in which comparisons are made and does not define a general threshold. The RD approach is useful because it differs from traditional concepts of poverty in that it defines the relative extent of deprivation of property and material or social conditions, while poverty is understood as “the lack or denial of resources to achieve these living conditions” (Townsend et al. 1987, 85; cited in Sauders 1994, 235-236). Second, the marginality framework highlights the potential roles of actors and actors, including the marginalized themselves. Starting with questions such as: “Who are the marginalized?”; Where do they live? and “How and why are they marginalized? focus on the people, the community and the institutional environment in which they operate. The marginality framework considers social and environmental systems as coupled and facilitates the identification of the relationships between actors and public infrastructure (physical and social) and how the institutional environment creates structures that lead to processes of marginalization. Implicitly, the framework draws attention to the problem of marginality and can thus facilitate targeted actions, not in the sense that they target a group of poor people, but a number of root causes of marginality, such as social exclusion, environmental risks or weak institutions. Within the concept of marginality, the relationship between poverty, environmental change and development can be addressed. Marginality is a multidimensional and interdisciplinary concept that integrates poverty, discrimination and social exclusion; deterioration of ecosystem function; and access to services, markets and technologies. Marginality involves understanding that subjective perceptions of poverty, values and aspirations are important, and that this is all part of the calibration of poverty measurement tools. The concept of marginality is not only inclusive and interdisciplinary, but also provides an integrated and systemic basis for understanding the interactions between social and ecological systems. In a world where there are fewer natural resources for all, the links and changing patterns between the two types of systems are becoming clearer and the role of access to services and technologies is becoming increasingly important.

In addition to the rise of Marxism, E. Screpanti and S. Zamagni pointed to another “external” reason for the success of marginalism, namely its successful response to the long depression and resurgence of class conflict in all advanced capitalist economies after the period of social peace of 1848-1870. Marginalism, Screpanti and Zamagni argue, proposed a free market theory as perfect, since it made an optimal allocation of resources, while allowing economists to attribute all the negative effects of laissez-faire economics to the interference of workers` coalitions in the proper functioning of the market. [41] It could be argued that neoclassical economics and deep marginalism explain supply curves in terms of marginal costs; However, there are clear differences in perceptions of these costs. Complete marginalization assumes that marginal costs increase under the law of diminishing marginal utility, because the application of resources to one application reduces their availability for other applications. Neoclassical economics tends to ignore this argument, but to view marginal costs as rising due to declining returns. Marshall was the second-generation marginalist whose work on marginal utility most influenced the mainstream of neoclassical economics, particularly through his Principles of Economics, the first volume of which was published in 1890. Marshall constructed the demand curve using assumptions that utility was quantified and that the marginal utility of money was constant or nearly constant. Like Jevons, Marshall saw no explanation of supply in the theory of marginal utility, so he combined a marginal explanation of demand with a more classical explanation of supply, with cost being considered objectively determined. Marshall later actively interpreted the criticism that these costs were ultimately determined by marginal performance. [10] This section deals with the meaning of the term in business.