Principles of Economics by Alfred Marshall

This is a landmark work of economics disguised as a textbook from 1890. Actually, it’s both. In truth, though, landmark mightn’t be the most appropriate descriptive. More a monument. Or better, a mausoleum. This large tome represents all the knowledge that British economics offered and economists thought fit to encapsulate and bury as truth in 1890. Its place as THE great work of British economics between Mill and Keynes had few rivals and, despite Marshall’s free enterprise leanings, no real competition.

The cool Keynes thought Marshall a bit too preachy to be a proper economist. In fact, Marshall does wear his heart on his sleeve throughout this work. A reader is never far from the impression that Marshall is a caring man who believes the business man is a natural humanist bringing material benefit to employees and customers alike. Efficiency isn’t bloodless greed, but material progress which truly benefits all. Against today’s bleaker offerings on economics, this refreshes. Still, the age of Marshall is one where finance was fairly simplistic, trade was just that, and employment meant material production, and its ally, consumption.

Though math was not a subject foreign to Marshall’s talent, quality still reigned over quantity in his world. Marshall lauds the thinker, the achiever, and, to a lesser extend, the common worker. Marshall is less kind to those not economically employable, but Marshall’s humanism emphasized that gospel of materialism would be moral if one tended to proper character, suitable education, and good thrifty economics. The mechanics of marginal utility would attend to the rest. Marshall has been credited with creating the concept of the consumer surplus. This is the remainder left over to a consumer when he purchased an item for less than he otherwise would have. What to do with this consumer surplus was worked out by his students, Keynes and Pigou.

Actually, the last is a glib statement, but one not completely bereft of point. Marshall’s was an age that worshipped enterprise, embraced a healthy suspicion of government interference, and believed that prosperity entailed moral responsibilities as well as rewards. By the author’s last edition, these values were already receding into the twilight. If you’re attracted to the classics, this is a must read. It stands proudly alongside Smith’s Wealth of Nations, Paul Samuelson’s ’48 Economics and others as a work of great historical importance as well as present-day interest.

Add comment