Alfred Marshall (1842-1924)

Neil Hart

Introduction

Alfred Marshall was undoubtedly the foremost member of his profession at a most critical stage of its development. He was the founder of the Cambridge School of Economics (at least in its modern incarnation), and played the leading role in the process of professionalising economics in Britain at the turn of the twentieth century. The significance of his role in the development of economics as a profession is captured clearly in the following words of his favourite student, John Maynard Keynes:

Marshall was the first great economist pur sang that there ever was; the first who devoted his life to building up the subject as a separate science, standing on its own foundations, with as high standards of scientific accuracy as the physical or the biological sciences. It was Marshall who finally saw to it that never again will a Mrs Trimmer, a Mrs Marcet, or a Miss Martineau earn a goodly reputation by throwing economic principles into the form of a catechism or of simple tales, by aid of which any intelligent governess might make clear to the children nestling

I would like to thank Geoff Harcourt and Peter Kriesler from the University of New South Wales for their helpful comments.

N. Hart (и)

Visiting Fellow, Industrial Relations Research Centre, University of New South Wales, Australia e-mail: This email address is being protected from spam bots, you need Javascript enabled to view it

R.A. Cord (ed.), The Palgrave Companion to Cambridge Economics,

DOI 10.1057/978-1-137-41233-1_16

around her where lies normal economic truth” [Marshall 1897: 296]. But—much more than this—after his time Economics could never be again one of a number of subjects which a Moral Philosopher would take in his stride, one Moral science out of several, as Mill, Jevons, and Sidgwick took it (Keynes 1924: 56—57).

In terms of his contributions to the development of economic analysis, Marshall has traditionally been regarded by historians of economic thought as a leading pioneering equilibrium economist and, alongside the likes of Leon Walras, Carl Menger, and Stanley Jevons, a ‘co-founder’ of the ‘neoclassical’ approach to economics. Joseph Schumpeter (1954: 834) portrayed Marshall’s Principles¹ as representing more perfectly than any other the state of economics that emerged in England at the turn of the twentieth century. However, Marshall remains somewhat of an enigmatic figure in the development of economic analysis, for as Schumpeter (1941) also observed in his semicentennial appraisal of the Principles, Marshall’s analytical apparatus appeared to be ‘obsolete’, a perception reiterated by subsequent commentators such as Brian Loasby (1978). This chapter reflects on the somewhat paradoxical role that Marshall’s writings have played in the development of economic analysis, and the partial equilibrium variant of ‘neoclassical’ economics in particular.

Born on 26 July 1842, in Bermondsey, Surrey (now London),^[1] ^[2] Marshall successfully completed studies towards the Mathematical Tripos at St John’s College, Cambridge, in 1865, achieving the distinction of becoming Second Wrangler to the eminent physicist, John Strutt (later Lord) Rayleigh. His choice of study at Cambridge reflected a fondness and aptitude for mathematics during his school days, as well as an apparent dislike for classical studies, much to the displeasure of his devoutly religious father. Marshall’s achievements in the Mathematical Tripos enabled him to secure a Fellowship at St John’s in 1865. However, by the early 1870s, Marshall’s intellectual endeavours had become devoted almost exclusively to political economy, which, at the time at Cambridge, was attached to the Historical and Moral Sciences. In 1877, Marshall married Mary Paley, a former student, forcing him to abandon his College Fellowship in order to conform to the celibacy rules of the University. He obtained a position at University College, Bristol, where he further progressed his teaching in political economy. Following the death of Henry Fawcett, Marshall was elected Professor of Political Economy at Cambridge in 1885, a chair he held up to 1908 when the position was taken up by his anointed successor, A.C. Pigou.

An appreciation of Marshall’s perspective on the nature and role of economic theory requires a consideration of the enduring influences on his thinking that shaped the intellectual journey that led him from mathematics to the unintended destination of political economy. The nature of this j ourney was described in Marshall’s own reflections contained in a passage that was initially intended for the Preface to his Money, Credit, and Commerce-.

About the year 1867 (while mainly occupied with teaching Mathematics at Cambridge), Mansel’s Bampton Lectures came into my hands and caused me to think that man’s own possibilities were the most important subject for his study.

So I gave myself for a time to the study of metaphysics; but soon passed to what seemed to be the more progressive study of Psychology. Its fascinating inquiries into the possibilities of the higher and more rapid development of human faculties brought me into 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 to the great body of the people the leisure and the opportunity for study; and they told me that I needed to study Political Economy. I followed their advice, and regarded myself as a wanderer in the land of dry facts; looking for a speedy return to the luxuriance of pure thought (Marshall quoted in Keynes 1924: 10).^[3]

On his journey towards the ‘land of dry facts’, Marshall had engaged in periods of intensive study and deliberation in philosophy and psychology, involving initially the philosophical foundations of knowledge and later the process by which knowledge itself is acquired. Enduring influences on Marshall’s thinking were to be found in the writings of Georg Hegel, Herbert Spencer, and Charles Darwin, and in the themes that had developed within the German Historical School, amongst the evolutionists, and from the emerging discipline of psychology that had escaped the clutches of metaphysics. Most significantly, Marshall’s studies occurred at a time when a new evolutionary paradigm of the functioning of the human mind was challenging existing ideas on the nature of knowledge and its role in shaping and transforming society. From his synthesis of these ideas, Marshall insisted on the historical specificity of economic analysis, together with the imperative of analysing economic and social change from an evolutionary perspective in which the cognitive powers of ‘man’ played a central role. Marshall saw the potential for human development as being connected to the growth and application of knowledge, being driven by what he associated with the ‘moral imperative’ that shaped human behaviour. These themes were communicated directly in his 1885 Cambridge Chair inaugural lecture:

In different ways Goethe, Hegel, Comte and other writers called attention to the development of the inner character and outward institutions of man, and worked their way towards the notion of tracing and comparing the modes of growth of the different sides of human nature ... At last the speculations of biology made a great stride forwards: its discoveries fascinated the attention of all men as those of physics had done in earlier years. The moral and historical sciences of the day have in consequence changed their tone, and Economics has shared in the general movement (Marshall 1885b: 154).

Also found in Marshall’s 1885 lecture was a statement of his plans to establish economics as a distinct and respected ‘scientific’ discipline at Cambridge and beyond, with a set of institutional arrangements in place to both nurture and perpetuate its future progress. The significance of Marshall’s contributions in this regard will be briefly reiterated in the next section, with a particular emphasis placed on the nature of Marshall’s professional leadership. This will be followed by an examination of Marshall’s legacy in terms of the subsequent development of economic analysis.

[1] Unless otherwise noted, all references to the Principles refer to the eighth edition of Marshall’s Principlesof Economics as published by Macmillan in 1920. C.W. Guillebaud’s (1961) Notes to the Ninth VariorumEdition (volume 2) provides an invaluable source from which the content and significance of the revisionsto the various editions of the Principles can be observed.
[2] There has been some confusion regarding Marshall’s place of birth, largely due to inconsistentinformation provided at census collections, intentionally or otherwise; see the discussions in Coase(1994) and Littlechild (2012).
[3] The nature of Marshall’s intellectual journey, covered in some detail in Keynes (1924), is now much betterunderstood following the publication of Peter Groenewegens (1995, 2007) definitive biography of Marshalland John Whitaker’s (1996) edited volumes of Marshall’s correspondence. Also of considerable interest are therecollections provided by Mary Paley Marshall (1947). Marshall’s early philosophical essays are assembled inRaffaelli (1994), and his historical notes and essays are presented in Cook (2005, 2008). Amongst the philosophical essays, Ye Machine (reproduced in Raffaelli 1994) is of particular interest.