School and Early Cambridge Days

At Marlborough, Austin was ‘rigorously drilled’ in classical grammar by an eccentric schoolmaster, A.C.B. Brown. This allowed him to jump all the necessary hurdles but it dimmed his enthusiasm, so that his heart was never completely captured. It did ensure that Austin wrote in a distinctively agreeable style in his books, articles, reviews, and letters—he was a prolific writer of letters which were noted for their lucid elegance as well as their substance.

When Austin went to economics, Fay, who had persuaded Christ’s to allow him to do so, lent Austin the Marshalls’ Economics of Industry and R.H. Tawney’s The Acquisitive Society to start him off. Austin read them, Frank Taussig’s Principles and Marshall’s Principles during the day in the summer of 1921, while working each evening as ‘poor-man’s lawyer’ in the dockyards of Liverpool, getting ‘a remarkable education regarding the life and problems of the poor’ (Austin Robinson 1992: 205). Austin found Fay an enthusiastic supervisor who was sublimely uncomprehending of the economic theory to be found in Marshall (much as Fay worshipped Marshall himself).

Back in Cambridge after India, Dennis Robertson asked Austin to write the book on Monopoly for the respected Cambridge Economic Handbooks series. Austin ended up writing two books (1931, 1941) as he cleared the ground for Monopoly by writing on The Structure of Competitive Industry, a project which became a book in its own right. Its Economic Journal reviewer, Philip Sargant Florence (to whose Lectureship Austin had been appointed when Sargant Florence went to the Chair at Birmingham), rightly praised it as the potential classic it was to become—‘a most original contribution... lively style.. .obvious.. .fund of industrial experience to back it [up]’ (Sargant Florence 1932: 66). He was as complimentary about Monopoly when nearly a decade later he was again the Economic Journal reviewer (perhaps as Review Editor, Austin wanted to see how Sargant Florence reacted second time around). Sargant Florence gave The Structure of Competitive Industry both high praise and stringent criticism. The praise was for the excellent structure of the argument which gave outstanding unity to the book. Austin looked at the optimum size of firms from a number of points of view—technique, management, product(s), marketing, for example—then brought all these aspects together, reconciled in the size of a real firm. The criticism related to a fuzziness of definition, that in much of his argument, it was not clear whether Austin was referring to plants’ ‘scale of operations’ or to firms’ ‘scale of organisation’.

Nevertheless, Austin’s work essentially established in an excellent way in Cambridge what we now can call industrial organisation. He blended together a judicious mix of theory, facts, and policy—always his approach to economic issues—thus deserving ‘the gratitude of all who wish to bring description closer to theoretical economics’ (ibid.: 69). His reviewer had one main criticism of Monopoly, that Austin confused the difficulties of creating a monopoly and circumventing competition with those of controlling an established monopoly. Despite this, Sargant Florence felt the author managed ‘to pack in most of the real world of monopoly while arguing all the time patiently from first principles’ (Sargant Florence 1941: 483).