Alfred Marshall

Alfred Marshall

Alfred Marshall (July 26 1842–July 13 1924), born in Bermondsey, London, England, became one of the most influential economists of his time. His book, Principles of Economics (1890), brings the ideas of supply and demand, of marginal utility and of the costs of production into a coherent whole. It became the dominant economic textbook in England for a long period.

Biography

Marshall grew up in the London suburb of Clapham and was educated at the Merchant Taylor's School, Northwood and St John's College, Cambridge, where he demonstrated an aptitude in mathematics, achieving the rank of second wrangler on the Cambridge Mathematical Tripos. Although he wanted early on, at the behest of his father, to become a clergyman, his success at Cambridge University led him to take an academic career. He became a professor in 1868 specializing in political economy. He desired to improve the mathematical rigor of economics and transform it into a more scientific profession. In the 1870s he wrote a small number of tracts on international trade and the problems of protectionism. In 1879, many of these works were compiled together into a work entitled The Pure Theory of Foreign Trade: The Pure Theory of Domestic Values. In the same year (1879) he published The Economics of Industry with his wife Mary Paley Marshall.

While Marshall took economics to a more mathematically rigorous level, he did not want mathematics to overshadow economics and thus make economics irrelevant to the layman. Accordingly, Marshall tailored the text of his books to laymen and put the mathematical content in the footnotes and appendixes for the professionals. In a letter to his protégée, A.C. Pigou, he laid out the following system: "(1) Use mathematics as shorthand language, rather than as an engine of inquiry. (2) Keep to them till you have done. (3) Translate into English. (4) Then illustrate by examples that are important in real life (5) Burn the mathematics. (6) If you can’t succeed in 4, burn 3. This I do often."

Alfred had been Mary Paley's professor of political economy at Cambridge and the two were married in 1877, forcing Alfred to leave his position at Cambridge in order to comply with celibacy rules at the university. He became a principal at University College, Bristol, again lecturing on political economy. He perfected his Economics of Industry and published it more widely in England as an economic curriculum; its simple form stood upon sophisticated theoretical foundations. Marshall achieved a measure of fame from this work, and upon the death of William Jevons in 1881, Marshall became the leading British economist of the scientific school of his time.

Marshall returned to Cambridge to take the seat as Professor of Political Economy in 1884 on the death of Henry Fawcett. At Cambridge he endeavored to create a new tripos for economics, which he would only achieve in 1903. Until that time, economics was taught under the Historical and Moral Sciences Triposes which failed to provide Marshall the kind of energetic and specialized students he desired.

Marshall began work on his seminal work, the Principles of Economics, in 1881, and he spent much of the next decade at work on the treatise. His plan for the work gradually extended to a two-volume compilation on the whole of economic thought; the first volume was published in 1890 to worldwide acclaim that established him as one of the leading economists of his time. The second volume, which was to address foreign trade, money, trade fluctuations, taxation, and collectivism, was never published at all.

Over the next two decades he worked to complete his second volume of the Principles, but his unyielding attention to detail and ambition for completeness prevented him from mastering the work's breadth. The work was never finished and many other, lesser works he had begun work on - a memorandum on trade policy for the Chancellor of the Exchequer in the 1890s, for instance - were left incomplete for the same reasons.

His health problems had gradually grown worse since the 1880s, and in 1908 he retired from the university. He hoped to continue work on his Principles but his health continued to deteriorate and the project had continued to grow with each further investigation. The outbreak of the First World War in 1914 prompted him to revise his examinations of the international economy and in 1919 he published Industry and Trade at the age of 77. This work was a more empirical treatise than the largely theoretical Principles, and for that reason it failed to attract as much acclaim from theoretical economists. In 1923, he published Money, Credit, and Commerce, a broad amalgam of previous economic ideas, published and unpublished, stretching back a half-century.

From 1890 to 1924 he was the respected father of the economic profession and to most economists for the half-century after his death, the venerable grandfather. He had shied away from controversy during his life in a way that previous leaders of the profession had not, although his even-handedness drew great respect and even reverence from fellow economists, and his home at Balliol Croft had no shortage of distinguished guests. His students at Cambridge became leading figures in economics, including John Maynard Keynes and Arthur Cecil Pigou. His most important legacy was creating a respected, academic, scientifically-founded profession for economists in the future that set the tone of the field for the remainder of the twentieth century.

Marshall died at his home, Balliol Croft, in Cambridge, England on July 13 1924 at the age of 81. He is buried in the Ascension Parish Burial Ground in Cambridge.

Theoretical contributions

Alfred Marshall is considered to be one of the most influential economist of his time, largely shaping mainstream economic thought for the next fifty years.

Marshall's economics was advertised as extensions and refinements of the work of Adam Smith, David Ricardo, Thomas Robert Malthus and John Stuart Mill. But he extended economics away from its classical focus on the market economy and instead popularized it as a study of human behavior. He downplayed the contributions of certain other economists to his work, such as Leon Walras, Vilfredo Pareto and Jules Dupuit, and only grudgingly acknowledged the influence of William Jevons himself.

Marshall's influence on codifying economic thought is difficult to deny. He popularized the use of supply and demand functions as tools of price determination (previously discovered independently by Cournot); modern economists owe the linkage between price shifts and curve shifts to Marshall. Marshall was an important part of the "marginalist revolution;" the idea that consumers attempt to equal prices to their marginal utility was another contribution of his. The price elasticity of demand was presented by Marshall as an extension of these ideas. Economic welfare, divided into producer surplus and consumer surplus, was contributed by Marshall, and indeed, the two are sometimes described eponymously as 'Marshallian surplus.' He used this idea of surplus to rigorously analyze the effect of taxes and price shifts on market welfare. Marshall also identified quasi-rents.

References

ISBN links support NWE through referral fees

• Peter Groenewegen; Classics and Moderns in Economics: Essays on Nineteenth and Twentieth Century Economic Thought. Volume: 1. Routledge. 2003. ch 12-16
• Peter Groenewegen. A Soaring Eagle: Alfred Marshall, 1842-1924 (1995)
• McGregor, D. H. "Marshall and his Book", Economica, n.s., 9, (1942) pp 313-24.
• J. K. Whitaker (ed.) Centenary Essays on Alfred Marshall, Cambridge University Press. (1990)

External links

• Biography of Alfred Marshall in the Concise Encyclopedia of Economics
• Principles of Economics, by Alfred Marshall, at the Library of Economics and Liberty
• A collection of Marshall's published works
• An extensive entry on Marshall's life and works

Credits

New World Encyclopedia writers and editors rewrote and completed the Wikipedia article in accordance with New World Encyclopedia standards. This article abides by terms of the Creative Commons CC-by-sa 3.0 License (CC-by-sa), which may be used and disseminated with proper attribution. Credit is due under the terms of this license that can reference both the New World Encyclopedia contributors and the selfless volunteer contributors of the Wikimedia Foundation. To cite this article click here for a list of acceptable citing formats.The history of earlier contributions by wikipedians is accessible to researchers here:

• Alfred_Marshall  ^history

The history of this article since it was imported to New World Encyclopedia:

• History of "Alfred Marshall"

Note: Some restrictions may apply to use of individual images which are separately licensed.