Economic, Ethical and Political Aspects of Wellbeing: Some Marshallian Insights from His Book on Progress

For “economic science and applied economic ethics” in Marshall, see Coats (1990).

“Some parts of economics are relatively abstract or pure, because they are concerned mainly with broad general propositions: for, in order that a proposition may be of broad application it must necessarily contain few details: it cannot adapt itself to particular cases; and if it points to any prediction, that must be governed by a strong conditioning clause in which a very large meaning is given to the phrase ‘other things being equal’. Other parts are relatively applied, because they deal with narrower questions more in detail; they take more account of local and temporary elements; and they consider economic conditions in fuller and closer relation to other conditions of life” (1920: 37 fn).

Though the power of sustaining great muscular exertion seems to rest on constitutional strength and other physical conditions, yet it also depends on force of will, and strength of character: as recalled in Principles, “this strength of the man himself, this resolution, energy and self-masterly, or in short this ‘vigour’ is the source of all progress” (Marshall 1920: 193–94). In his late notes, Marshall remarks that: “The ideal is not comfort but life, vigour. The comfort of the masses is to be thought for: they ought not to [be] robbed of their sugar, or their tobacco. But it is their life, the physical mental & moral vigour for which we ought to care” (undated, Marshall Library Archive, folder 5.9). This is why for him it was necessary to “Use public money freely in order to increase vigour rather than diminish suffering” (dated 7.9.11; 5.1.12 and 18.1.12, Marshall Library Archive, folder 5.39). A concept that is repeated in a letter written to Helen Bosanquet (28 September 1902), where Marshall stresses: “I have always held that poverty & pain, disease & death are evils of much importance than they appear, except in so far as they lead to weakness of life & character; & that true philanthropy aims at increasing strength more than at diminishing poverty” (Whitaker 1996, II: 399).

For the attention given to “human character”, see Raffaelli’s “Character and capabilities” in Raffaelli et al. (2006).

A clear echo of this Marshallian opinion is in Pigou’s Economics of Welfare where the author notes: “Non-economic welfare is liable to be modified by the manner in which income is earned. For the surroundings of work react upon the quality of life. Ethical quality is affected by the occupations…. In the relations between employers and workpeople in ordinary industry the non-economic element is fully as significant. … Employers and the employed became more distant in station,……This spirit of hostility was an obvious negative element in non-economic welfare due to an economic cause; and the partial suppression of it through the Boards of Conciliation, Whitley Councils and Co-partnership arrangements is an equally obvious positive element. …” (1920: 14–17).

Among the elements that shape individual efficiency we find: “the qualities of physical and constitutional strength, the mental qualities of manual dexterity and skill: and beyond these they include patience, resolution, energy and self-mastery; knowledge and intelligence and artistic instincts; versatility and adaptability; initiative, inventiveness, sense of proportion, and the power of rising to emergency; honesty, solidity of character; order, unselfishness and affection in family life; patriotism; ethical, social, and aesthetic idealism” (undated, Marshall Library Archive, folder 6.21.1).

Since his early Lectures to Women (1873b), Marshall had underlined that man is “the finest instrument of production in the world”, “the most important productive machine” warning that “we must regard a man as intelligent capital” and “mental and moral capital” (Raffaelli et al. 1995: 98, 117–19).

It is Tiziano Raffaelli (1994) who, first, has underlined the importance of some Marshall’s early philosophical studies on mind (especially “Ye Machine”) to understand his approach to economic science and in particular his idea of the growth of knowledge, understood as the product of a mix of routine and innovation, his rejection of the neoclassical concept of homo oeconomicus in favour of ‘a man of flesh and blood’; his view of industrial and social organizations; the use of partial equilibrium analysis; his critical position towards some political and social issues such as socialism, trade unions and bureaucracy; the idea that progress must advance slowly (see on this Caldari 2015, 2018).

In a letter to Bishop Brooke Foss Westcott (24 January 1900), he writes: “There is only one effective remedy that I know of, and that is not short in its working. It needs patience for the ills of others as well as our own. It is to remove the sources of industrial weakness: to improve the education of home life, and the opportunities for fresh-air joyous play of the young; to keep them longer at school; and to look after them, when their parents are making default, much more paternally than we do. Then the Residuum should be attacked in its strongholds. We ought to expend more money, and with it more force, moral and physical, in cutting off the supply of people unbale to do good work, and therefore unable to earn good wages” (Whitaker 1996, II: 263).

As such education plays an essential part in social (and economic) progress so that Marshall has been recognized as a forerunner of human capital theory (see Bowman 1990, see also Nishizawa 2002).

As stressed by Marshall “The existence of grave inequalities of wealth is an integral part of the progress of mankind, as we know it. Another world may be more prosperous than our own, without any similar inequalities. Everyone in it may be intent on the advance of general wellbeing, and care but little how much of it falls to his share” (undated, Marshall Library Archive, Folder 5.8).

Although this manuscript is undated it is bound together with a note by his wife Mary in which she writes: “These pages were written during the last few months when his memory was failing”. Marshall’s handwriting evidences his old age.

Two major works by Marshall on taxation are in fact to be recalled: The Memorandum on the Classification and Incidence of Imperial and Local Taxation (1897) and National Taxation after the War (1917).

For a comprehensive explanation of the British tax system and its evolution over time during Marshall’s life, see Groenewegen (1995).

In the last chapter of Principles (“Progress in relation to standards of life”, contending the chief remedy to fit more of the children of the unskilled for higher work), Marshall notes: “Education must be made more thorough. …It is to educate character, faculties and activities; so that the children even of those parents who are not thoughtful themselves, may have a better chance of being trained up to become thoughtful parents of the next generation. To this end public money must flow freely. And it must flow freely to provide fresh air and space for wholesome play for the children in all working class quarters. Thus the State seems to be required to contribute generously and even lavishly to that side of the wellbeing of the poorer working class which they cannot easily provide for themselves” (1920: 717–18). See also fn. and Appendix G, whose §9 referred to “fresh air rate” (see on this Caldari 2004). In a note written for his book on progress, he underlines: “The chief sources of water supply should be declared national property; and they should be leased, …to local authorities. The same is true of fresh air. The central government should see to it that towns and industrial districts do not continue to increase without ample provisions for that fresh air and wholesome play which are required to maintain the vigour of the people and their place among nations; this is, perhaps, the most important financial responsibility which has not yet been faced” (undated, Marshall Library Archive, folder 6.32.1).