Alfred Marshall

‘It is probably well within the truth to assert that the authority of Marshall has been for several decades, and still remains, supreme among the economists of the English speaking world’ (Davenport 1935, p. 1). Such praise begins Henry Davenport’s 1935 book, The Economics of Alfred Marshall, despite his highly critical attitude to Marshallian economics. Sixty years later, Milton Friedman, a great admirer of Marshall’s microeconomics, argued that Marshall’s great book, Principles of Economics, ‘dominated the teaching of price theory…until well into the twentieth century’ (Friedman 1996, 2004, p. 139).

Alfred Marshall was born on Tuesday, 26 July 1842, at his parents’ house, 66 Charlotte Row, Bermondsey, in the County of Surrey. He was the second child in the family of William Marshall and Rebecca Marshall née Oliver. William Marshall and Rebecca Oliver were married two years previously on 13 May 1840 at the Parish Church of South Camberwell. Alfred Marshall’s older brother, Charles William, was born within eleven months of that marriage on 13 April 1841. Alfred’s younger sisters, Agnes and Mabel Louisa, were born in 1845 and 1850 respectively, and his younger brother Walter, the last child of the family, in 1853.

Biographical fragments imparted to friends and students in later life and recollections from his wife inform on the activities Marshall engaged in during the years immediately following his completion of the Mathematical Tripos in 1865. These years involved a short period as acting mathematics master at Clifton College, a newly established public school, during which Marshall made friendships opening new doors for him at Cambridge. Henry Sidgwick, a Fellow at Trinity and an external examiner at the school, was one of these new friends. He probably introduced Marshall in turn to Clifford and Moulton who, as Mary Paley recorded, were his two greatest friends when he became a Fellow at St John’s. Another Johnian, called Moss, was part of a group of seven young Fellows at St John’s who met regularly together for Shakespeare readings. In addition, Marshall joined the Eranus Society in these years. This was a discussion group including Sidgwick, Venn, Fawcett and Clifford among its members, the first three of them teachers at Cambridge in the Moral Sciences. It brought Marshall thereby in close contact with persons involved in the disciplines he himself began to study on completion of the Mathematics Tripos. Two years later, in 1867, Marshall joined the Grote Club, another Cambridge discussion society concentrating on philosophical subjects and named after the Cambridge Professor of Moral Philosophy who had started it.

During the seven year period 1879–84, Marshall spent five years in Bristol, one year of extended sick leave in Europe and one year at Oxford. At the end of 1884, the death of Henry Fawcett, and Marshall’s successful application to replace him as Professor of Political Economy, enabled him to return to Cambridge. Although these years away from Cambridge constituted a period of exile for the Marshalls away from many of their friends, they were nevertheless fruitful and enjoyable. This is despite the fact that the first four years in Bristol were spoiled for Alfred Marshall by the heavy administrative load that his college position as Principal entailed and, from 1879, by the illness (a stone in the kidney) which allowed them to escape Bristol for a year to Palermo and, more generally, Europe. Their sojourn in Sicily was later described by Mary Paley Marshall as one of the happiest periods in their lives, largely because Alfred Marshall was free to work while she relaxed in that colourful city with her painting. The period of leave in Sicily and Europe was followed by a further year at Bristol as Professor of Political Economy only (hence without the ardours of academic administration for which Marshall clearly was totally unsuitable). In the academic year, 1883–84 Marshall was Fellow of Balliol College and Lecturer in Political Economy at Oxford.

In January 1885, Marshall returned to Cambridge University as its Professor of Economics after an absence of eight and a half years. In mid-December, Marshall had been elected to the position from six candidates altogether, being the clear favourite in an ostensibly strong field. Marshall gave his inaugural lecture on 24 February 1885 on the topic, ‘The Present Position of Economics’. This allowed him to set out his aims for his subject by outlining both its present state in England and what Cambridge could do to assist its further development. The lecture upset some of his senior colleagues in the Moral Sciences. They included Henry Sidgwick and economic historian William Cunningham. It did so by clearly stating the dominant role Marshall intended to establish for economics at the expense of both the traditional Moral Sciences and of historical studies in economics. The contents of Marshall’s inaugural lecture are therefore important and are subsequently reviewed in detail.

The first volume of Marshall’s Principles of Economics was published on 18 July 1890. It quickly became a landmark in the literature of economics, on par with Smith’s Wealth of Nations and J.S. Mill’s Principles of Political Economy, books with which it was in fact often compared. Publication of this work was undoubtedly the high point of Marshall’s economic career. It embodied a great deal of his life’s work between its two covers, even when it became a self-standing single volume of economic foundations. For several decades, it was planned as a two-volume work, intended to cover all major elements of economics. This second volume was, however, formally abandoned by the time the sixth edition appeared in 1910. Some reviewers of the first edition had already hinted at this possibility, given the long gestation period of the first volume. This chapter examines both the process of producing and the contents of Marshall’s Principles of Economics, highlighting in particular the many enduring contributions it made to economic analysis and theory.

This chapter is devoted to examining Marshall’s activities and ideas on political and social topics either closely related to his economics, to his position as Professor of Economics at Cambridge or to his behaviour as academic in advancing certain causes. It also provides examples of his willingness to engage in controversy when the subject, in his view, warranted it. As mentioned at the start of Chapter 5, this chapter gives an opportunity as well to examine a miscellany of Marshall’s activities while being Professor at Cambridge. These are of interest in grasping aspects of his economics, even if they do not directly relate to his activities as teacher and writer explored in the two previous chapters. The length of the title reflects the nature of this chapter. It is a convenient vehicle for bringing together some important episodes in Marshall’s life associated with his role as Britain’s leading academic economist while being Professor at Cambridge.

This chapter reviews the final years of Marshall’s life from his retirement in 1908 as Cambridge Professor of Political Economy to the publication of Industry and Trade in 1919 as the first of an eventual two companion volumes to the Principles. The discussion of these eleven years is broken up as follows. The first section (Section 8.1) deals with Marshall’s retirement, a step he took to provide more time for the writing of the companion volumes whose publication had already been delayed for far too long. It also discusses the final lecture he gave just before he retired and the honours conferred on him by his university including that of the painting by William Rothenstein of his official portrait. Section 8.2 examines the battle for the succession between Foxwell and Pigou, and Marshall’s role in Pigou’s election to the Cambridge chair. The early years of Marshall’s voluntary retirement, that is, up to the beginning of First World War in 1914, are discussed in Section 8.3. Marshall’s work during the war is looked at in Section 8.4 under the heading of a ‘principled war effort’. Section 8.5 then reviews the circumstances surrounding the writing of Industry and Trade, followed by a discussion of its publication, its contents and its reception in Section 8.6. A concluding section closes the chapter.

The final years of Marshall’s life following his deserved triumph with the publication of Industry and Trade were spent in growing ill health, the onset of senility from the early 1920s, rapid increase of short-term memory loss, though poor memory had apparently plagued Marshall from the beginning of the twentieth century. Hypertension, first diagnosed in 1914, steadily grew worse, together with a gall bladder ailment causing nausea, acidity and digestive problems dating from the 1870s, which likewise gradually worsened. Keynes’s description of his last visit to Marshall on 16 May 1924, less than two months before Marshall’s death, is illustrative. It mentioned seeing Marshall in bed with his night cap on, ‘weak in voice, still able to laugh’, no short-term memory left to speak of and ‘now rather like a child, … often troublesome’ (Keynes to Lydia Lopokova, 16 May 1924, in Hill and Keynes (eds) 1989, p. 195).

Alfred Marshall’s legacy was both a rich and an enduring one. From his personal estate he left his library and papers to the Cambridge Faculty of Economics and Politics, together with money to maintain it. His widow, for close to the two decades by which she survived her husband, helped as librarian of what became the Marshall Library of the Cambridge Faculty of Economics and Politics. The printed catalogue of this library, issued in 1927 within a few years of Marshall’s death, indicates the extent and value of this part of his legacy to the faculty he had created at Cambridge (as is discussed later in this chapter).