Alfred Marshall

Background

Alfred Marshall was born in London on July 26, 1842, the son of a cashier at the Bank of England.

Education

At Cambridge he abandoned plans to enter the Anglican clergy and graduated in mathematics. Elected to a Cambridge fellowship, Marshall planned then to pursue molecular physics. Instead, he was drawn first to metaphysics, particularly ethics, which he studied in Germany for a year, then to psychology, and finally to economics as a practical means for implementing ethics.

Career

In 1868 Marshall's college, St. John's, established a special lectureship for him in moral science. In 1875 he returned from a study of trade protection in the United States to attempt to make political economy a serious subject at Cambridge. When, in 1877, he married a former student then lecturing in economics at Newnham, the women's college at Cambridge, he became ineligible to continue his fellowship. University College, Bristol, had just been founded, and Marshall, a firm believer in extending adult educational opportunities, agreed to become first principal and professor of political economy. In 1883 Marshall became a fellow of Balliol and lecturer in political economy to students preparing for the Indian civil service. Two years later he took the chair in political economy at Cambridge. Until his retirement in 1908, Marshall dominated a singularly influential school of economics, with separate and tripos status after 1903.

In 1890 Marshall's Principles of Economics was welcomed enthusiastically by economists and a popular audience as a revolutionary work in economics. His other major works were The Economics of Industry (1879), written with his wife; Elements of Economics of Industry (1892); and Industry and Trade (1919). Besides his writing and dedicated teaching, Marshall created the British Economics Association in 1890 (Royal Economics Society after 1902), and he directly influenced government policy on currency, prices, gold and silver, fiscal affairs, poor relief, local taxes, and international trade.

From 1890 until his death on July 13, 1924, Marshall was the patriarch of the new economics.

Achievements

• Alfred Marshall was the founder of the "new economics. " He rejected the traditional definition of economics as the "science of wealth" to establish a discipline concerned with social welfare.
  
  His book, Principles of Economics (1890), was the dominant economic textbook in England for many years. It brings the ideas of supply and demand, marginal utility, and costs of production into a coherent whole. He is known as one of the founders of neoclassical economics.
  
  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 20th century.
  
  The library of the Department of Economics at Cambridge University (The Marshall Library of Economics), the Economics society at Cambridge (The Marshall Society) as well as the University of Bristol Economics department are named after him.
  
  His home, Balliol Croft, was renamed Marshall House in 1991 in his honour when it was bought by Lucy Cavendish College, Cambridge.

Works

More photos

• book

  • Principles of Economics (Great Minds)

    (British economist Alfred Marshall (1842-1924) was one of ...)

  • The Pure Theory of Foreign Trade, the Pure Theory of Domestic Values (Reprints of economic classics)

    (These theoretical appendices for a proprosed volume on in...)

  • ELEMENTS OF ECONOMICS OF INDUSTRY (Illustrated)

    (The book has an active table of contents for easy access ...)

  • Official Papers of Alfred Marshall: A Supplement by Alfred Marshall (1996-05-30)
  • The Economics of Industry

Views

The content and method of Marshall's economics were largely original, but his basic assumptions were derived from the 19th-century belief that social reform depended initially upon the reform of character. He never doubted that every man sought his own, or at least his children's, best interest; that "work" purified human nature, stimulating personal and social progress; or that capitalism would be inherently progressive if it was made more efficient.

Marshall's economic analysis began with the quasistatic, evolutionary institutions of free enterprise and developed as a search for measurable regularities in economic phenomena. Since money could be measured regularly, Marshall studied prices. His most important technical contributions were in price and value analysis. The value of things, which he recognized as necessarily relative and subjective, was expressed as money prices, reached through an elastic play of forces behind demand and supply. "Utility, " the power of goods and services to satisfy consumers' wants, and demand fluctuated in relation to price. Price, in turn, was determined both by the cost of production and by judgments about utility, the two inseparable blades of the economic scissors. Utility, being subjective, was not measurable, but it did reflect a psychological attitude critical in any economic activity. This was typical of the "marginal disutility of labor, " that point at which the worker decided that he had nothing further to gain from additional work.

Nineteenth-century political economy ended and the new economics began with Marshall's pioneering use of econometrics; his creation of economics as a rigorous discipline with its own content and method; his attempt to unify competitive economic theories and practices; and his belief in the evolutionary nature of economic knowledge. Marshall's overweening influence led two generations of economists in Britain and America to spend their professional lives discussing, restating, developing, interpreting, altering, and questioning his doctrines and tools of analysis.

Quotations: "The most valuable of all capital is that invested in human beings"

"Political Economy or Economics is a study of mankind in the ordinary business of life. "

"Capital is that part of wealth which is devoted to obtaining further wealth. "

"Knowledge is our most powerful engine of production. "

"In common use almost every word has many shades of meaning, and therefore needs to be interpreted by the context. "

"Civilized countries generally adopt gold or silver or both as money. "

"The price of every thing rises and falls from time to time and place to place; and with every such change the purchasing power of money changes so far as that thing goes. "

Membership

He was a Fellows of St John's College, Cambridge, a Fellow of Balliol College, Oxford and a Fellow of the British Academy.

Connections

In 1877 he married Mary Paley.

She was a co-founder of Newnham College; she continued to live in Balliol Croft until her death in 1944.

Father:

William Marshall

Mother:

Rebecca Oliver

Spouse:

Mary Paley

(d. 1944)

References

• The Intellectual Foundations of Alfred Marshall's Economic Science: A Rounded Globe of Knowledge (Historical Perspectives on Modern Economics)
• The Elgar Companion to Alfred Marshall by Tiziano Raffaelli (2006-11-01)
• The Structure of Social Action: A Study in Social Theory With Special Reference to a Group of Recent European Writers (Classic Reprint)
• Alfred Marshall in Retrospect
• A Soaring Eagle: Alfred Marshall 1842-1924