Alfred Marshall’s Mission

315 Pages·1990·32.4 MB·English

by  David Reisman (auth.)

ALFRED MARSHALL'S MISSION
Also by David Reisman
ADAM SMITH'S SOCIOLOGICAL ECONOMICS
ALFRED MARSHALL: Progress and Politics
THE ECONOMICS OF ALFRED MARSHALL
GALBRAITH AND MARKET CAPITALISM
THE POLmCAL ECONOMY OF JAMES BUCHANAN
RICHARD TITMUSS: Welfare and Society
STATE AND WELFARE: Tawney, Galbraith and Adam Smith
THEORIES OF COLLECTIVE ACTION: Downs, Olson and
Hirsch
ALFRED MARSHALL'S
MISSION
David Reisman
Palgrave Macmillan
ISBN 978-1-349-11544-0 ISBN 978-1-349-11542-6 (eBook)
DOI 10.1007/978-1-349-11542-6
© David Reisman, 1990
Softcover reprint of the hardcover 1st edition 1990
All rights reserved. For information write:
Scholarly and Reference Division,
St. Martin's Press, Inc., 175 Fifth Avenue,
New York, N.Y. 10010
First published in the United States of America in 1990
ISBN 978-0-312-04491-6
Library of Congress Cataloging-in-Publication Data
Reisman, David A.
Alfred Marshall's mission / David Reisman.
p. cm.
Includes bibliographical references.
ISBN 978-0-312-04491-6
1. Marshall, Alfred, 1842-1924. 2. Neoclassical school of
economics. I. Title.
HB103.M3R45 1990
330. 15'5-dc20 89-77792
CIP
Contents
1 INTRODUCfION 1
2 CHILDHOOD AND CAMBRIDGE 3
3 CAMBRIDGE AND BRISTOL 19
4 OXFORD AND CAMBRIDGE 38
5 ECONOMICS AND PRINCIPLES 60
6 THE EVOLUTION OF THE PRINCIPLES 106
7 BEYOND THE PRINCIPLES 174
8 CONCLUSION 263
Notes and References 266
Index 298
v
1 Introduction
Keynes said that Marshall was 'too anxious to do good'.1 It is never
very easy to say precisely how much good each of us oUght to be
anxious to do, and one also suspects that it is on balance better to be
too anxious to do good than not anxious enough; but the point
remains that Marshall was an earnest, conscientious and purposive
social philosopher who regarded economic science as never more
than the 'servant' of that 'mistress' which must be ethics.2 As Jacob
Viner puts it: 'There have been few of us who have made conscience
be our guide as to subjects of investigation and methods of analysis as
steadily and as consistently as did Marshall. Of course Marshall was
,3
the master-maker of tools, whose Principles of Economics are to this
day, to a greater extent than is true of the insights of any other single
theoretician of the past, the foundations of our own. Yet no one
understands Marshall who understands only consumer's surplus and
elasticity of demand, diminishing marginal utility and increasing real
cost, the normal value and the equilibrium price, or who loses sight
even for a moment of what Keynes so accurately diagnosed as 'the
conflict ... between an intellect, which was hard, dry, critical, as
unsentimental as you could find ... [and] emotions and aspirations,
generally unspoken, of quite a different type. When his intellect
chased diagrams and Foreign Trade and Money, there was an evan
gelical moraliser of an imp somewhere inside him that was so
ill-advised as to disapprove. Near the end of his life, when the
intellect grew dimmer and the preaching imp could rise nearer to
the surface to protest against its lifelong servitude, he once said: '''If
I had to live my life over again I should have devoted it to psychology.
Economics has too little to do with ideals."'4 Too little perhaps, but that
much more nonetheless because of the contribution of a secular
missionary who, endowed with the double nature of the scientific
investigator who is simultaneously a member of 'the tribe of sages
and pastors',5 preferred ultimately to give the preeminence to that
side of his divided personality which made him issue the following
warning to academic introverts deplorably unaware of social duties:
1
2 Alfred Marshal/'s Mission
'We are not at liberty to play chess games, or exercise ourselves upon
subtleties that lead nowhere. It is well for the young to enjoy the
mere pleasure of action, physical or intellectual. But the time
presses; the responsibility on us is heavy. ,6 It comes in the circum
stances as no great surprise to learn that his nephew, the economist
Claude Guillebaud, was able to recall in 1970 that Marshall was a
serious man of great personal integrity, deeply concerned with the
social significance of his discipline as well as with the abstract techni
cal formulations with which, by an irony of intellectual history, his
name is for all time inextricably linked: 'He disapproved profoundly
if he thought he saw any indication of my having wider interests in life
than the only one by which he himself was activated - the furtherance
of economics as a branch of knowledge to be used in the service of
mankind. ,7 Sanctimonious, self-righteous and even intolerant though
Marshall's call to arms may well appear, it is a useful antidote to the
approach <>i those contemporary economists who never stray from
the knot garden of the conventional wisdom, sedulously refined and
elegantlY presented, to contemplate the wider ramifications of their
important subject or the ties of ethical responsibility that bind the
cells willy-nilly to the organism of which they are a part. If Marshall
was too anxious to do good, then it would also be true to say that such
contemporary economists are not anxious enough; and that there is no
better place for them to tum for intellectual regeneration and spiritual
uplift than to the work of an economic moralist who thought big and
whose anthropocentric, holistic, multidisciplinary and quintessentially
dynamic analysis of the capitalist market economy, developed while
anxious to do good, constitutes one of the most stimulating contribu
tions to the literature which treats of the great issues.
Alfred Marshall was a missionary for economics as a science and
for the economic evolution with which it is symbiotically linked; and
it is with his mission that we shall be concerned in this study in
intellectual biography. Our account will be divided into six central
sections headed, respectively, Childhood and Cambridge, Cam
bridge and Bristol, Oxford and Cambridge, Economics and Prin
ciples, The Evolution of the Principles, and Beyond the P,:inciples.
No conclusion is reached as to precisely how much good each of us
ought to be anxious to do. What does emerge, however, is that little
can be said about Alfred Marshall's life and times which does not
bear in some way upon the sense of purpose and notion of service
that are the twin keys to the complex personality of this most social of
social economists.
2 Childhood and Cambridge
Alfred Marshall was born at Clapham on 26 July 1842. His father was
a cashier in the Bank of England, with the result that Alfred enjoyed
a City connection and an exposure to monetary economics at an early
age. William Marshall was also somewhat of a despot in his own
home (Alfred's writings abound in weasel-words such as 'neady',
'generally', 'probably', 'perhaps', 'on the whole'; his economics is
noteworthy for its qualifications and assumptions; and a psychologi
cal explanation for such evasiveness might be the subconscious desire
of the oversensitive spirit to avoid confrontation) and a strict Evan
gelical Christian (a man who, destining his son for a career in the
ministry, compelled him to study useful subjects such as Hebrew -
often, as was the case with Mill, late into the night - and forbade
Alfred not only the self-indulgence of board games but 'the fascinat
ing paths of mathematics' as well: 'His father hated the sight of a
mathematical book. ').1 It must have required a great deal of courage
for Alfred, at the end of his secondary education at the Merchant
Taylors' School (where he was 'small and pale, badly dressed, looked
overworked and was called "tallow candles" by his fellows')2 to tum
down a classics scholarship to St John's College, Oxford, in order to
study mathematics (supported by a loan from an uncle) at St John's
College, Cambridge. He emerged in 1865 with First Class Honours in
that subject, Second Wrangler to J. W. Strutt (later Lord Rayleigh,
Professor of Experimental Physics and Nobel Laureate, 1904).
His plan was to proceed with the study of molecular physics, but
first Marshall took a one-year temporary teaching post at Clifton
College in order to repay his uncle, before returning to Cambridge to
do some tutoring for the Mathematical Tripos. It was at that time (in
1867) that he joined the Grote Club, a group of young intellectuals
who met (like the more famous Apostles) to discuss fundamental
issues, including the speculations of philosophy and theology. Marshall
later wrote as follows about the impact that those discussions had on
him:
3
4 Alfred Marshal/'s Mission
For a year or two Sidgwick, Mozley, Clifford, Moulton, and myself
were the active members, and we all attended regularly. Clifford
and Moulton had at that time read but little philosophy; so they
kept quiet for the first half-hour of the discussion; and listened
eagerly to what others, and especially Sidgwick, said. Then they let
their tongues loose, and the pace was tremendous. If 1 might have
verbatim reports of a dozen of the best conversations 1 have heard,
1 should choose two or three from among those evenings in which
Sidgwick and Clifford were the chief speakers.3
Henry Sidgwick (1838-1900), later to become (in 1883) Knights
bridge Professor of Moral Philosophy in Cambridge and author of
seminal works such as Methods of Ethics (1874) and Principles of
Political Economy (1883), was in those very Grote Club days experi
encing the severe personal crisis that was inevitably his lot, given the
strong desire of that most scrupulous of thinkers to remain 'honest in
the sight of all men':
It is surely a great good that one's moral position should be one
that simple-minded people can understand. 1 happen to care very
little what men in general think of me individually: but 1 care very
much about what they think of human nature. 1 dread doing
anything to support the plausible suspicion that men in general,
even those who profess lofty aspirations, are secretly swayed by
material interests.4
As early as 1861, Sidgwick had been expressing his doubts about the
Anglican communion in correspondence with his friends Browning
(to whom he wrote of his fear of 'perjury': 'I see that there is a great
gulf between my views and the views once held by those who framed
the Articles,)5 and Dakyns (to whom he confided the great problem
he felt he faced 'of reconciling my religious instinct with my growing
conviction that both individual and social morality ought to be placed
on an inductive basis')6 but had nonetheless, in 1863, subscribed to
the 39 Articles of the Faith at the time of his appointment to a
Fellowship at Trinity. It obviously mattered greatly to him that no
one should think he had subscribed merely for personal gain while
believing only 'laxly' in the doctrines he espoused; and thus it
happened in 1869 that the punctilious philosopher felt he had no
choice but to resign his Fellowship (without, incidentally, leaving the
Church) in order, as he put it, 'to free myself from dogmatic
obligations'.7 Sidgwick's courageous action figured prominently in