Frederick Lavington (1881-1927)

Peter D. Groenewegen

Introduction

Frederick Lavington was born in 1881. From 1897 to 1908 he worked in the Capital and Counties Bank, a sign of things to come. In 1908 (the year Marshall retired from his Cambridge Chair), Lavington entered Cambridge as a mature student. In 1909, he obtained a Fellowship from Emmanuel College. As a student in his late twenties, Lavington was considerably older than his fellow students and, by two years, than his lecturer, Maynard Keynes. Charles Fay (1927: 504-505) later recalled that Lavington came up from London with ‘two passions, one for the academic life of discussion and analysis, the other for the pulsating romance of the London money market. His essay on the latter in Part I of the Economics Tripos extracted from us the unusual mark of 90 per cent’. Two problems in Marshallian economics particularly intrigued him: the nature of ‘the particular expenses curve’ and ‘the validity of consumer surplus’. Neither was explained to his satisfaction by Fay until Fay got the definitive answer from Marshall himself.

Lavington was placed in the First Class of Part I of the Economics Tripos in 1910, followed by another First when he completed Part II in 1911.

P.D. Groenewegen (h)

Professor Emeritus Economics, School of Economics, University of Sydney, Australia

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

DOI 10.1057/978-1-137-41233-1_22

Lavington was part of the brilliant student cohort of pre-1914 graduates trained by Keynes and A.C. Pigou. Lavington also won the Adam Smith Prize for his essay, ‘The Agencies by which Capital is associated with Business Power’. After a short spell of lecturing at Cambridge on the capital market, Lavington found employment in 1912 in the new Labour Exchanges (Collard 1990: 197). In 1918, Lavington returned to Emmanuel College as a College Lecturer in Economics; in 1920, he obtained the Girdlers’ Lectureship in Economics as successor to Keynes, a position held until his death in 1927.

Lavington became a monetary economist concentrating on topics associated with the rate of interest, uncertainty, and speculative activity. On these he published three articles in the Economic Journal (Lavington 1911, 1912, 1913). His superb 1912 article ‘Uncertainty in its Relation to the Net Rate of Interest’ established him as a gifted Cambridge monetary theorist. During the 1920s he published two books: The English Capital Market (1921, with a second posthumous edition in 1929) and the far shorter and quite unoriginal The Trade Cycle (1922). Both were reviewed in the Economic Journal (Lemberger 1921; Cannan 1922). An article on the topic of ‘Business Risks’ appeared in two parts in the Economic Journal (Lavington 1925, 1926a), as did a lengthy book review (Lavington 1923). He published three articles in Economica (Lavington 1924, 1926b, 1927), the last two devoted to topics in the theory of the firm.

These publications established his reputation as a sound Marshallian economist and made him part of the Cambridge Monetary School (then led by Keynes, Pigou, and Dennis Robertson) which contributed to money and banking, economic fluctuations, and the business cycle. Lavington was never greatly involved with Keynes. A single letter (from 1911) between the two economists survives, while Keynes’s appointment books mention Lavington only once (Moggridge 1992: 433-434). Lavington’s initial lectures were devoted to topics in finance and the capital market; from 1920, he also lectured on the structure and organization of industry. Both his publications and lectures reveal Lavington as a very orthodox Marshallian economist, a staunch believer in the literal inspiration of Marshall’s Principles of Economics, and credited with the saying, ‘It’s all in Marshall’ (Wright 1927: 504).

The 1920s were a period for Lavington of ill health, combined with a tendency to overwork. Apart from his teaching and research, Lavington played an active role in college life and in wider university activities. Fay (1927: 505) mentioned he was ‘an excellent supervisor’, and both he and Wright (1927) argued that Lavington was far more devoted to Marshall and his econom?ics than members of the Faculty of Economics and Politics generally were. With this background, Lavington’s various economic contributions can now be chronologically examined.