MARSHALL, ALFRED (1842–1924)

MARSHALL, ALFRED (1842–1924)

Alfred Marshall wrote his Principles of Economics (1890) to provide a firm foundation for the teaching of Economics in universities; the book quickly became established as the central textbook for the English-speaking world, and was still being read as such in the 1950s. It went through eight editions and numerous reprintings, five times in the 1960s and four in the 1970s. As Professor of Political Economy in Cambridge, he created in 1903 the Economics Tripos, the first specialized threeyear course in economics anywhere in the world. Using his Cambridge position he was the moving spirit behind the formation of the British Economic Association in 1891 (from 1902 the Royal Economic Association), a vehicle for the publication of the Economic Journal as the central specialist academic journal for the new discipline. Unusually, his intellectual authority in Britain as a theoretical and applied economist was combined with the will and capacity to Alfred Marshall wrote his Principles of Economics (1890) to provide a firm foundation for the teaching of Economics in universities; the book quickly became established as the central textbook for the English-speaking world, and was still being read as such in the 1950s. It went through eight editions and numerous reprintings, five times in the 1960s and four in the 1970s. As Professor of Political Economy in Cambridge, he created in 1903 the Economics Tripos, the first specialized threeyear course in economics anywhere in the world. Using his Cambridge position he was the moving spirit behind the formation of the British Economic Association in 1891 (from 1902 the Royal Economic Association), a vehicle for the publication of the Economic Journal as the central specialist academic journal for the new discipline. Unusually, his intellectual authority in Britain as a theoretical and applied economist was combined with the will and capacity to

Marshall was born in Bermondsey, London, on 26 July 1842, son of William, a clerk at the Bank of England, and Rebecca Oliver, a butcher’s daughter. In 1852 he entered Merchant Taylor’s School where he followed a classical curriculum, chiefly of Latin, Greek and Mathematics. In 1861, with some financial help from an uncle who was a successful sheepfarmer in Australia, he entered St John’s College, Cambridge, to study Mathematics, with the long-term aim of entering the Church. He graduated Second Wrangler in 1865—that is, with the second highest first-class degree in Mathematics. After a short spell as a schoolteacher and then as a mathematics coach he was given a college fellowship in November 1865, for which he would have had to attest his adherence to the Church of England. Religious tests of college fellows at St John’s were not abolished until 1871, and marriage remained a bar to holding a fellowship until 1882. But by the end of 1867 his interest had turned to metaphysics, and from there to ethics, initiating a progressive shift towards agnosticism and an interest in social issues strongly marked by contemporary discussion of evolution and human development. This change in his interests was recognized in 1868 by the Master who appointed him to a college lectureship in the Moral Sciences, broadly equivalent to the social sciences of the twentieth century. This appointment opened the way to a focus upon political economy, although his route to the subject meant that he retained a strong interest in social progress and human improvement.

In 1870 Marshall delivered a course of lectures on political economy to women students, the material included in the Moral Sciences Tripos being the only Cambridge degree accessible to young women who, at that time, were generally excluded from the formal intermediate education that would have given them an appropriate working knowledge of classical languages and mathematics. Marshall’s lectures were part of an informal arrangement on the part of liberal Cambridge academics that made teaching available to women officially excluded from the university. In this way he came into contact with Mary Paley, who took up residence in Cambridge in October 1871, was encouraged by Marshall to read for the Moral Sciences Tripos and successfully sat the examination as an unofficial candidate in 1874. She returned home to Stamford and began lecturing on her own account there, returning however in 1875 to the beginnings of what was to become Newnham College, Cambridge. Here she began collaboration with Marshall on a textbook for University Extension lectures, published under their joint names as The Economics of Industry in 1879. This was the first English introduction to economics written for use as a textbook in teaching, and it quickly became the standard reference work. In 1877 Alfred and Mary married, and as Maynard Keynes rightly notes in his biographical essay, Alfred’s dependence upon her devotion became complete. Marshall’s early feminist inclinations subsequently withered. In 1892 he replaced the Economics of Industry with a dry summary of his Principles called Elements of the Economics of Industry, and did his best to eradicate the earlier book from circulation. In later life he maintained that economics was a subject unsuitable for the female mind, although it transpired that women students reading for the Economics Tripos Marshall

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had designed gained degrees consistently above the prevailing average well into the twentieth century.

Alfred’s marriage to Mary meant that he had to surrender the St John’s Fellowship. University education was however expanding rapidly at this time, among the new foundations being University College, Bristol in 1876. Marshall became its first Principal in 1877, with responsibility also for the teaching of political economy. Mary took over the day classes in 1878 before, in 1879, Marshall fell ill with a stone in the kidneys. Apart from his illness, Marshall disliked his work as Principal, and sought to resign. When in 1881 he was eventually replaced he and Mary went on a long convalescent Continental holiday, the initial work on the Principles being completed during a stay in Palermo. On his return he taught political economy for another year at Bristol, moving in 1883 as successor to Arnold Toynbee at Balliol College, Oxford. Part of the motive for this move lay in the imminent retirement of the incumbent Drummond Professor of Political Economy, Bonamy Price, but the death in late 1884 of Henry Fawcett, Professor of Political Economy at Cambridge, opened the way for Marshall’s return to his old university. The Marshalls moved back in early 1885, and both lived out the remainder of their lives in the house they built there, Balliol Croft.

Keynes distinguishes three phases in Marshall’s intellectual development as an economist: he began studying the subject in 1867; from his wide reading of British and Continental authors he had developed the main features of his doctrine by 1875; by 1883 they were arriving at their final form. Thus when appointed to the Cambridge chair at the age of 44 his understanding of the subject was more or less complete, but he had yet to publish a paper or book that embodied this understanding. The Principles was his chosen vehicle for this, although when published in 1890 this was planned as only the first of two volumes—although the material for the second volume, originally assembled in the 1870s, first appeared under the title Money, Credit and Commerce in 1923. When Marshall arrived back in Cambridge his principal interest had become the refinement of his understanding into a major book, and the creation of a medium for its teaching. Although he held a fully paid chair, there was little systematic teaching in the subject, and limited interest in it—the latter contrasting with the Oxford he had left. In the mid- 1880s Cambridge students typically took ten papers to graduate; and Political Economy represented three papers in the Moral Sciences examinations, and one in History. Given the small numbers taking Moral Sciences, and its relatively elementary level, this represented a weak basis upon which to launch his work, so Marshall set about extending this base on both fronts. By the later 1890s he had determined on the creation of a separate Economics Tripos, his eventual success in 1903 owing a great deal to the widespread irritation that his long campaign of agitation had engendered. Marshall’s political skills lay more in wearing down an opposition than charm and persuasion. Once the new Tripos was established his colleagues in Moral Sciences and History dropped political economy from their own Triposes, and so no longer had to endure Marshall’s badgering. The Economics Tripos became, by default, the vehicle for the later development of the social sciences in Cambridge.

Marshall’s capacity for antagonizing colleagues is also apparent in the controversy surrounding the succession to the chair in 1908. For many years Marshall had been assisted in his teaching by Herbert Foxwell, Professor of Political Economy at University College London, where, however, there were very few students. As Marshall got older he

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became increasingly infirm, although the fact that he lived to within a few days of his eightysecond birthday rather indicates a degree of hypochondria. Once the Tripos was established he determined on resigning the chair, and decided that the most suitable successor was Arthur Pigou, a young Cambridge lecturer he had identified as a possible candidate in the early 1900s. However, Foxwell had formed the somewhat unreasonable expectation that, although only seven years younger than Marshall and lacking anything beyond a rather dated and elementary understanding of economics, he should rightfully assume the Cambridge chair. The appointment of Pigou as successor to Marshall in 1908 came as a complete shock to Foxwell and ensured that Pigou’s succession was marked with controversy.

Pigou was Marshall’s choice; but even if he had not been it is more than likely that he would have been selected as the most suitable candidate. The appointment of Marshall’s student did however secure the Marshallian heritage in Cambridge. Marshall lived on in Cambridge, giving advice and supervision to students until his death at home on 13 July 1924. Pigou, although he never engaged in university politics, contributed strongly to the formalization of Marshall’s work while still adhering to the social and ethical values that Marshall had brought to it. During the inter-war years, Cambridge economics was Marshallian economics; and since in this period the largest single concentration of British economists was in Cambridge, and not Oxford or the LSE, this ensured that the study of economics in Britain was heavily marked by Marshallian themes until at least the mid- twentieth century.

Marshall’s original training in mathematics gave him an understanding of the importance of its principles to the development of economics, but he did not seek to impose mathematical routines on economic reasoning in the way now fashionable. The first edition of the Principles opened with a lengthy account of the evolution of human economy, and contained a mathematical appendix to which all formal notation was banished. In his 1885 Inaugural Lecture Alfred Marshall had reviewed political economy since Adam Smith, and in summarizing his differences with this past tradition, he suggested that the chief fault of the earlier English economists had not been that they ignored history and statistics, but that Ricardo and his followers neglected a large group of facts and a method of studying facts that we now see to be of primary importance. Marshall argued that they treated man as a constant quantity, interesting themselves little in human behavioural variation. Economics, he suggested, should not be a formal body of laws, but a means of reasoning, a set of tools that could be used to understand and get the measure of human action. This conception of an organon, a means of reasoning, represents the core of the Marshallian heritage, embodied in the Principles and passed on in this way into the twentieth century.

Although the Principles was much revised and reordered by Marshall, his chief contributions to economics are clear in the first edition of 1890. The analysis was based on the method of partial equilibrium, analysing sectors of human action while holding others constant, a method distinct to the mathematical general equilibrium introduced by Walras that sought to resolve the price mechanism as the interconnection of all markets. Marshall did emphasize the interconnectedness of the economic domain; but the approach that he adopted was not intended to provide a solution to the problem of price formation, rather to illuminate how economies functioned. Accordingly, he recognized the importance of expectations in shaping human behaviour, while at the same time

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recognizing the real limitations of the conception of optimization as a doctrine guiding economic analysis. With the rise of a formalized and abstract economic science in the later twentieth century much of Marshall’s teaching appeared increasingly dated; but the project of turning economics into a mathematically based model of human action now appears more dated than the fundamentals of Marshall’s own approach.

Marshall expressed the hope in his inaugural lecture that a generation of economists with ‘cool heads and warm hearts’ might arise to carry forward the project of human improvement. Marshall certainly lacked the personal emollience of his colleague Henry Sidgwick, but his colleagues understood that he shared their own liberal values. For many years the genteel details of Marshall’s social origins provided in John Maynard Keynes’s seminal 1924 obituary essay were assumed to be perfectly reliable, based as they were for the most part on information supplied by his widow and other family members. There is no reason to think that Mary Marshall deliberately misinformed Keynes, nor that Keynes failed in any way to examine the facts as laid before him. But Marshall’s background was far more humble than either Mary or Maynard Keynes suspected, a circumstance first demonstrated by Ronald Coase, whose new findings were then elaborated in Peter Groenewegen’s biography. Keynes’s version of the family history perpetuated a systematic ‘gentrification’ of Marshall’s origins in which he possibly colluded, his progression to Cambridge seeming quite natural. The new picture of his early life shows how much of a social as much as an intellectual achievement this in fact was; and we can only speculate as to quite why Marshall would have wished to obscure this.