The Elgar Companion to Alfred Marshall

Published by EH.NET (September 2007)

Tiziano Raffaelli, Giacomo Becattini and Marco Dardi, editors, The Elgar Companion to Alfred Marshall. Cheltenham, UK: Edward Elgar, 2006. xxv + 727 pp. $300 (cloth), ISBN: 1-84376-072-X.

Reviewed for EH.NET by David Andrews, Department of Economics, State University of New York at Oswego.

There are few more important figures in the development of modern Anglophone economics than Alfred Marshall. Although his partial equilibrium supply and demand approach was largely abandoned by economists in favor of general equilibrium, it still dominates the introductory microeconomics course and thus popular notions of what economics is all about. Marshall’s importance has been widely recognized for over one hundred years and there is a vast quantity of research and writing on his work. Tiziano Raffaelli, Giacomo Becattini, and Marco Dardi have made an impressive and useful contribution to that literature as the editors of The Elgar Companion to Marshall.

This reference book has ninety-nine short and self-standing entries (averaging about seven pages each) grouped into eight sections. With the exception of a previously published essay by Ronald Coase on “Marshall and Method,” the entries appear to have been written specifically for this book. Many of the entries were written by well-known Marshall scholars and overall the quality of the entries is very high. The authors have interpreted the length constraint in various ways. Some entries try to summarize what is known or agreed on the topic as it relates to Marshall; other authors focus on guiding the reader through the secondary literature; still others make original arguments. Many involve some combination of these three.

This structure does not allow for a continuous argument, but two related themes tie the sections together. First, the Marshall we encounter in these pages is not a narrow economist, but a broad social thinker. We find here the Marshall of Keynes’s famous 1924 obituary. After his undergraduate training in mathematics was over, but before he began to work seriously on economics, Marshall experienced a mental crisis the result of which was that he abandoned his plan to study physics and instead devoted himself to a study of philosophy. He began with metaphysics, specifically “the philosophical foundation of knowledge, especially in relation to theology” (cited in Keynes, 1924). This study led Marshall to ethics, specifically a Sidgwickian utilitarianism, and ethics, in turn, led him to economics, because economics played an essential role in providing the preconditions for the improvement of the working class. Even as he turned to economics, his ethical views continued to be a dominant force in his thinking.

Corresponding to this broad social philosophy, Marshall had a comparably broad approach to social science in which economics plays an important but limited role. He recognized that in reality, economic life is tightly bound up with ethical, social and political currents, currents economists cannot ignore. The second distinctive feature of the portrayal of Marshall is the related and more original claim that the brilliance of Marshall’s intuition that economics should be broad, interdisciplinary and inclusive is only now apparent because the analytical tools that were necessary to follow up the directions he wished to go were not yet available at the time that he wrote, but are available now.

The entries serve to illustrate the two major themes. The first section, Life and Work (thirteen entries) addresses a broad range of Marshall’s concerns, including his role at the University of Cambridge and his major books, but the emphasis is on Marshall’s early writings on philosophy, history and economics. It is here that the basic picture emerges of Marshall as being driven into economics by his underlying religious attitude. The second section, Background and Influences (seven entries) emphasizes the context of Marshall’s early life. The piece by Christopher Stray on “The Young Marshall’s University” is remarkable for the richness of the picture that it paints in a very small space. Unfortunately, Marshall’s intellectual crisis and the influence on Marshall of the circle around Henry Sidgwick receive very little attention.

The third section, labeled somewhat obscurely, “Scope and Method,” includes the essay by Coase but generally addresses Marshall’s inclusive view of social science. Entries address Marshall’s definition of economics and the relationship between economics and such fields as statistics, sociology, economic history, psychology and biology.

The fourth section, on Economic Analysis (thirty-four entries), further subdivided into equilibrium and dynamics (six entries), the theory of value (six entries), the theory of distribution (seven entries), industrial analysis (seven entries) and money and commerce (eight entries), focuses on the “richness and versatility of Marshall’s theoretical tools.” This section contains a number of interesting entries, for example, one by Michael De Vroey defending Marshall’s commitment to partial equilibrium over general equilibrium on the grounds that the inherently dynamical nature of economics made the former more practically useful. Ian Steedman’s entry on the theory of capital and interest is perhaps the most critical in the volume. Nevertheless, this section does not directly develop the claims that dominate most of the rest of the book.

The fifth section, Social and Political Issues (fourteen entries), attempts to show that social and political problems are not “added superstructure” with respect to Marshall’s economic analysis, but are integrally connected. Marshall envisioned dramatic social change involving the elimination of poverty and a sharp reduction of inequality. The purpose of economics was to improve material conditions, but such improvement would occur, Marshall believed, only in connection with social and political forces. The entries on liberalism, socialism, trade unions, women’s education, poverty and progress reflect the influence of his early social philosophy to his later activities and writings.

The sixth section, Marshall and his Contemporaries (eleven entries), is concerned with Marshall’s personal interactions with his contemporaries, including friends, philosophers, economists, colleagues and students, including Henry Sidgwick, W.K. Clifford, Benjamin Jowett, William Stanley Jevons, Francis Ysidro Edgworth, John Neville Keynes and John Maynard Keynes. Some of these entries are very good, notably the entry on Sidgwick by Bart Schultz.

The seventh section, Marshall’s Legacy (four entries), considers debates that followed Marshall’s death. This section, like the fourth, is focused on topics conventionally associated with Marshall and the Cambridge school, e.g., increasing returns, the theory of the firm, and welfare economics. The entries in this section are generally strong but are somewhat outside of the main current of the book.

The eighth section, Marshall and Present-Day Economics (seven entries), examines research areas that have experienced recent revivals of interest in Marshall’s ideas. A number of entries throughout the book hint at the second major claim, that of the rediscovery of Marshall’s insights in a world in which the tools are available to pursue them, but it is only in this final section that this insight moves to center stage. Entries explore Marshall’s connections with recent developments in evolutionary, industrial, cognitive and institutional economics.

One might quibble about the coverage and arrangement, but overall the editors have done a good job in this respect. I have some reservations about the claims made in the section on Marshall and modern economics and it strikes me as unhelpful to associate him with ideas and approaches of which he was unaware and to which he has no opportunity to respond. The space constraints are inconvenient for some entries that attempt to cover broad topics the richness of which is difficult to convey without a large canvas. For example, I would put the entries on “The Victorian Cultural Context,” “Early Influences,” and several in the section on “Marshall’s Legacy” in this category.

Generally the entries serve as good introductions to the subjects they address and will be particularly useful to students, researchers and non-specialists. While the volume makes no pretense of being comprehensive or encyclopedic, it surveys Marshall’s thought broadly. It makes a definite contribution in highlighting the breadth and complexity of Marshall’s thought without underplaying his contributions to economics. The Elgar Companion to Alfred Marshall makes a fine addition to any economics reference collection.

Reference: John Maynard Keynes, “Alfred Marshall, 1842-1924,” The Economic Journal, Volume 34, Number 135, September, 1924

David Andrews (State University of New York at Oswego) is working on a book on Keynes and philosophy.