The Multidisciplinary Pursuit of Optimality: Alfred Marshall and the Establishment of the Economics Profession

Alfred Marshall is today celebrated as an outstanding economist and moreover the founder of the Faculty of Economics and Politics at Cambridge University in 1903. Yet upon examining his life, Marshall stands out first as a classical polymath and then as an evolutionist, very much in line with modern thinking in development economics. Born in Bermondsey, London, Marshall was educated at Merchant Taylors’ School, and attended St John’s College, Cambridge, where he excelled in mathematics and in 1865 was Second Wrangler, being immediately elected to a Fellowship. He spent some time as a mathematical master at Clifton College, Bristol, under the headmastership of John Percival. This opened his social circles to include H.G. Dakyns, J.R. Mozley, and Henry

Sidgwick, who became his early influences in moral philosophy—with which Marshall was fascinated. A mathematician, evolutionist, and a budding philosopher with a growing interest in the hindering problems of social inequality and poverty, Marshall was armed with all the multidisciplinary talent and breadth of ideas that his predecessors had possessed.^[1]

Marshall’s interest in economics was born out of a fascination with utilitarian ethics, such that the solution of economic problems was something of a higher calling—an exercise for ‘man’s higher faculties’ (Keynes 1933 [1972]: 170). Human progress in an equal and liberal manner was a crucial precondition for human happiness and opportunity, in Marshall’s opinion. He writes: ‘The economist can claim...that “the study of the causes of poverty is the study of the causes of the degradation of a large part of mankind”’ (Marshall 1890: 3-4). The resounding notion of potential and optimism runs through Marshall’s justification for his move into political economy, this having some elements of Sen’s later capabilities approach:

I had doubts as to the propriety of inequalities of opportunity, rather than of material comfort. Then, in my vacations I visited the poorest quarters of several cities and walked through one street after another, looking at the faces of the poorest people. Next, I resolved to make as thorough a study as I could of Political Economy (Marshall quoted in Keynes 1933 [1972]: 171; italics in original).

Marshall was a mathematical economist but he preferred to use geometrical exposition to express his ideas. In the tradition of his classical predecessors, Marshall took a multidisciplinary approach in his quest, combining the ideas borne of metaphysics, evolution theory, and psychology:

[F]ascinating inquiries into the possibilities of the higher and more rapid development of human faculties brought me in touch with the question: how far do the conditions of life of the British (and other) working classes generally suffice for fullness of life? Older and wiser men told me that the resources of production do not suffice for affording the great body of people the leisure and opportunity for study; and they told me that I needed to study Political Economy (Marshall quoted in ibid.).

In terms of relating biological evolution with social evolution and the economic capabilities of mankind, Marshall was specific in his distinction between modern and early civilisations. He observed that life in the latter ‘is pervaded almost unconsciously by a few simple ideas which are interwoven in that pleasant harmony that gives their charm to Oriental carpets’ (Marshall 1890: 13). Nevertheless, like Darwinian evolution, so-called Marshallian Evolution—which demanded that ‘Economic evolution is gradual’ (ibid.: xiii)—became a key characteristic of Marshall’s analysis on early development economics. He considered that the ‘influence of economic causes is pressed below the surface. There they work surely and slowly’ (ibid.: 14).

Perhaps a result of the prevailing British Raj in India, Marshall’s venture into political economy concerned the happiness and well-being of an entirely foreign population.^[2] Indeed, his views on India appear to have been well developed and consistent with his assertion that economic evolution is gradual. He even lectured civil service trainees at the University of Oxford for some time (Tahir 1990: 37). For instance, in formalising a theory entrenched in the spirit of Marshallian Evolution and ideas about economic modernity, Marshall refers to the Indian labour market in making his argument. Specialised trades, as Marshall purported, were the glue that held the economy together. He asserts that a key indicator of a modern civilisation is to have division of labour within these specialised trades. Marshall writes:

Some sort of division of labour is indeed sure to grow up in any civilisation that has held together for a long while, however primitive its form. Even in very backward countries we find highly specialised trades; but we do not find the work within each trade so divided up that the planning and arrangement of the business, its management and its risks, are borne by one set of people, while the manual work required for it is done by hired labour. This form of division of labour is at once characteristic of the modern world generally, and of the English race in particular (Marshall 1890: 37).

At the same time, Marshall was of the belief that colonial rule would benefit the Indian economy—if it were to avoid rapid transformation and create an administrative structure conducive to his well-defined vision of evolution. Resource transfer is not then the issue that Marshall would have highlighted. Indeed, neither protectionism nor industrialisation (particularly together) would be necessary for Marshallian Evolution, as Pigou highlighted (Pigou 1920: 458).

Finally, Marshall was a visionary in what he hoped the new Faculty of Economics and Politics at Cambridge would achieve, this in turn helping to pave the way for modern research in development economics. His emphasis was on the goal of betterment, of development, and to this, methodology was secondary. In the Principles (1890), Marshall contributed to the emerging neoclassical school. Yet despite his mathematical background, he was pragmatic about the use of mathematics in economics, noting his preference for diagrams over algebra in his review of Jevons’s Political Economy in 1872 (Marshall 1872). He was much more deeply concerned with the need for historical context for economic ideas, and even praised radicals and socialists for the ‘shrewd observations and pregnant suggestions’ (Marshall quoted in Keynes 1933 [1972]: 196) which lay beneath their less feasible ideas, from which economists and philosophers might learn a great deal. To Marshall, maintaining an open mind about the subject of human betterment, and various ideologies surrounding and interpreting it, was crucial to how he taught the subject to the likes of Maynard Keynes. As Keynes wrote:

[T]he bare bones of economic theory are not worth much in themselves and do not carry one far in the direction of useful, practical conclusions. The whole point lies in applying them to the interpretation of current economic life. This requires a profound knowledge of the actual facts of industry and trade (ibid.).

• [1] The paradox of the economist, as Keynes put it, is that economics is at least in relative terms, an easysubject, at which very few excel: ‘The paradox finds its explanation, perhaps, in that the master-economistmust possess a rare combination of gifts. He must reach a high standard in several different directions andcombine talents not often found together. He must be mathematician, historian, statesman, philosopher—in some degree. He must understand symbols and speak in words. He must contemplate theparticular in terms of the general, and touch abstract and concrete in the same flight of thought. He muststudy the present in the light of the past for the purposes of the future. No part of man’s nature or hisinstitutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician’ (Keynes1933 [1972]: 173-174; italics in original).
• [2] Marshall already had an interest in development issues as demonstrated by his 1875 tour of the USA tostudy protectionism (see McCready 1955: 260).