Tyler Cowen is an economist, educator, intellectual, and fellow member of the commentariat (though plenty more eloquent and prolific than me). He's out with a new book... which he describes as "Not quite a book"

It has four chapters, is about 40,000 words, is fully written by me (not a word from the AIs), and it is attached to an AI with a dual page display, in this case Claude.  Think of it as a non-fiction novella of sorts, you can access it here.  You can read it on the screen, turn it into a pdf (and upload into your own AI), send it to your Kindle, or discuss it with Claude.

This is a 4-part series — corresponding to the four parts of Cowen's "book" — where I share some extracts and comments from the book as I'm making my way through it.

The full book, The Marginal Revolution: Rise and Decline, and the Pending AI Revolution, is available here:
https://tylercowen.com/wp-content/uploads/2026/03/TheMarginalRevolution-Tyler_Cowen.pdf

(giving it away openly, like Max Hillebrand did for Praxeology of Privacy is very cypherpunky... and also fits exactly with the times, where the value of generated written art or content drops to zero... so creators might as well give it away. I'm on this theme all the time, #796401, #1467035)

CHAPTER 1: What Is Marginalism?CHAPTER 1: What Is Marginalism?

Marginalism is the change-of-emphasis of economic ideas (and those people consumed by them, whom we call "economists") that happens simultaneously in the late-19th C... it's a change from considering goods and markets as classes or factors of production as uniform blobs to considering the margins at which economic decisions are made. "VALUE" is no longer objective, it's not production based or containing within it a certain amount of socially necessary labor:

the so-called “Marginal Revolution,” dating from 1871, is considered a formative event – maybe the formative event – in the history of economic reasoning. In the early 1870s three different economists published similar insights, known today as marginalism, and thus the name Marginal Revolution. (p. 3)

The revolution (it's literally called that... and why Cowen and Tabarrok's blog is named that, too) that Cowen talks about is that, however little people know about it today, it is the starting point for all (serious) economic considerations — whether people know it or not. As a rough approximation, marginal analysis becomes to economics what gravity is to physics:

Marginalism also is the starting point for explaining wages, rents, returns to capital, and basically all factor prices. For instance, many economic models write down some conditions under which the wage for a worker equals the marginal product for that worker, marginal product being defined as how much that worker adds to the output of the firm. Few economists believe that wage actually will end up literally equal to marginal product, and that difference stems from numerous reasons, including transactions costs, differential bargaining power, various laws, and measurement difficulties. Nonetheless the wage = marginal product model, at least as a rough approximation, is the accepted starting point for figuring out how these other factors are likely to matter. (p. 6)

What Cowen wishes to advance in this portion of the book is that MARGINALISM...

... is deeper and more multi-faceted than most moderns believe. I will use that presentation to explain why it took so long to properly appreciate and apply marginalist insights. On the more ominous side, I will consider how and why marginalism is already declining in import, and why it is receding from the scientific frontier. And why that might be for the better. (p. 7)

Marginalism offered a framework for generating relationships among economic variables, measuring those variables, and then testing hypotheses about those variables. It is no wonder that marginalism succeeded. You can think of it as a full employment project for economists. Opinions will differ on exactly how good or how useful all of this econometric estimation has been. (p. 14)

Regardless of its shortcomings,

"it is broadly recognized that for most problems and for most of the history of the economics profession better alternatives have not been available.” (p. 14)"it is broadly recognized that for most problems and for most of the history of the economics profession better alternatives have not been available.” (p. 14)

The pinpointed 1871 date, corresponding to the publications of books by Jevons, Walras, and Menger in three different European countries, is a tad arbitrary but as good as any. Plenty of historians of economic thought have unearthed earlier marginal analysis (from the 1850s etc), and Cowen includes Jules Dupuit plus some well-known Brits (Gossen, Edgeworth):

Early (“flat-out”) marginalist a few decades before the real deal, (1844):

The 19th century Frenchman Jules Dupuit was an engineer and although his name is not directly linked to the 1871 marginal revolution, he has as good a claim as anybody to be the father of marginalism. Dupuit published his major work, On the Measurement of the Utility of Public Works, in 1844. Dupuit is not so much a precursor of marginalism as a flat-out marginalist early on. He presented the first systematic case for marginal cost pricing, which he applied to public bridges (p. 19)

The social engineering and political improvements

A lot of early marginalists – Gossen, Edgeworth, even Walras, were social marginalists, out to improve policy or the lot of the poor… (a theme that dominates modern welfare economics too).

social marginalism has been part of the marginal revolution from the beginning. Starting in the 1970s, some economists such as Amartya Sen has resurrected broader notions of utility, including the possibility of partial utility comparisons across individuals. (p. 23)

Cowen's illustrative examples, ranging from tolls and congestion pricing on bridges to the effect on abortion of the geographical presence of clinics, aren't exactly crystal-clear. He walks us through the age-old water-diamond paradox (which, stupidly enough, was never a paradox for labor-theory-of-value), and makes the larger — very Cowen-like — point that you may very well ethically disagree with people's behavior, but the implications of marginal analysis remain valid nevertheless!

“The fact that you might interject and suggest those alternatives are somehow morally outrageous does not refute the argument.” (p. 26)“The fact that you might interject and suggest those alternatives are somehow morally outrageous does not refute the argument.” (p. 26)

Many people hate even thinking about the issue in this kind of framework because it brings up the notions of trade-offs and marginal valuations. You might think, as many do, that the abortion debates should be settled by absolute moral values and appeals to rights and ethics, not economic valuations [...] They do not always want to consider that plural and indeed conflicting values may be relevant. In this setting, marginalism is playing a forcing role by keeping those plural values squarely in the discussion. And this is one reason why marginalism is sometimes unpopular. It is corrosive of moral certainties. (p. 27)

In the next chapter, we turn to William Stanley Jevons, one of the marginalists and whom Cowen describes as "Builder and Destroyer of Marginalism."