1.1 Introduction
The Cambridge tradition , through the largely partial equilibrium economics of Alfred Marshall and A.C. Pigou, and the Lausanne tradition, through the general equilibrium economics of LĂ©on Walras and Vilfredo Pareto, are considered as constituting the two main schools of neoclassical economic thought. The subject matter of this book is the consideration of whether the economics of Arthur Cecil Pigou falls within the parameters of a âMarshallianâ thought style. Alfred Marshall established a genuine school of thought during his tenure as Professor of Political Economy at the University of Cambridge. Pigou was groomed and mentored in the Marshallian tradition of economic thinking. Indeed, Marshall was active in his support of both Pigouâs fellowship application at Kingâs College and Pigouâs later appointment as Marshallâs successor to the Cambridge Chair of Political Economy. Both scholars shared a similar liberal and utilitarian heritage, which had long coloured British political economy through the works of the masters, from David Ricardo to J.S. Mill. Nevertheless, there were also striking differences in Marshallâs and Pigouâs respective intellectual contexts. Marshallâs intellectual development and pathway to the study of economics emerged from the rigours of the Mathematical Tripos at Cambridge and his subsequent interests in psychology and ethics during the 1860s, at the height of the Victorian era. This was a time when Darwinâs theory of evolution and its ramifications started to erode traditional beliefs and institutions that had formed the foundations of British society, providing new ways of framing the general nature of reality. The formative years of Pigouâs intellectual development were, by contrast, partly a product of his studies in the History and Moral Sciences Triposes at Cambridge during the late 1890s, and his wide reading between his appointment as a fellow at Kingâs College Cambridge in 1902 and his appointment as Professor of Political Economy at Cambridge in 1908. Consequently, the foundation for his intellectual development was laid in the late Victorian and early Edwardian periods. The scientific advances, social changes, and immanent critiques arising in Marshallâs and Pigouâs respective scientific networks and nexuses had shifted considerably between their formative years of intellectual development. The focus of this book is on the (largely Cambridge) forces associated with the emergence of Pigouâs distinct style of thinking on economic matters and welfare. That focus is pursued by exploring the context of his development as a student and fellow at Kingâs College and the conflicting twentieth-century assessments of Pigouâs Marshallian heritage.
In more recent times, Marshallian studies have blossomed with new perspectives emerging on the development of Marshallâs economic thought. One product of these new perspectives on Marshall has been an increasing emphasis on the discontinuities between the economics of Marshall and Pigou. This has even led to questions being raised as to the legitimacy of Pigouâs Marshallian pedigree. The following pages, however, deal squarely with Pigou and the influences upon his economic thinking, and attempt to provide a Pigouvian context to differences arising between the style and the approach to economic analysis that Marshall imprinted upon the discipline and those of his anointed successor. An alternate way of viewing these differences is presented, not as discontinuities per se, but rather as part of a natural process in the evolution of a style of thought in economics.
1.2 A Marshallian âThoughtâ Style
The central argument presented in this book is that, following Marshallâs retirement, the style of economic thought associated with Marshall evolved in an adaptive way through the work of his successor and, notwithstanding the many differences in Marshallâs and Pigouâs representations of economic theory, Pigouâs economics continued to fall within the broad category of a Marshallian âthought styleâ. Nevertheless, characterising Pigou as a âMarshallianâ does require some clarification. The term âMarshallianâ has been employed in the secondary literature to refer to specific aspects of the economic tradition that Marshall established at Cambridge. Sometimes emphasis is given to the group of scholars at Cambridge trained in Marshallian economics. At other times, emphasis is given to the specific theoretical tools developed by Marshall and used by others. Over time, different tools and theoretical instruments were emphasised, meaning the general understanding of the term âMarshallianâ evolved over the course of the twentieth century. A third focusâadvanced in this bookâconsiders differences between the particular theoretical tools used by Marshall and his followers, and differences in the methodology of science and general approach to economic issues associated with Marshall and his followers, as arising over the course of time as part of an adaptive or evolutionary process. These differences are put into perspective by clarifying Pigouâs position as a âMarshallianâ economist by drawing upon Ludwik Fleckâs notion of a âthought styleâ.
Fleckâs (1979 [1935]) concept of a âthought styleâ is the chief conceptual tool employed to collect, interpret, and order the historical material, and to justify the central contention, running through this book. This historiographical approach is indirectly conveyed in the central contention articulated above. Specifically, the key argument presented in this book is that the style of economic thought associated with Marshall and Pigou, as the respective first- and second-generation leaders of Cambridge economics as a distinct tradition, evolved in an adaptive way, notwithstanding the many differences in the way Pigou and Marshall represented economic theory. As such, Pigouâs economics can be considered as having continued to fall within the broad category of a Marshallian âthought styleâ, where the phrase âthought styleâ in the context of this narrative conveys the larger philosophical-cum-sociological meaning given to it by Fleck. A full account of the Fleckian conceptual framework is presented in Chap. 4, and hence the characteristics of this framework need be considered here only to the extent that the meaning of a Marshallian âthought styleâ is fleshed out.
Fleck contends that a style of thought is shared informally amongst a group of people who practice science, which he refers to as a âthought collectiveâ. He further contends that the way ideas are understood by members of a particular âthought collectiveâ is constrained by their particular âthought styleâ. Members of a âthought collectiveâ (in this case, economists at Cambridge) come to share a particular style of thinking by way of a process of didactic apprenticeship and education. But as individuals can be members of a number of different âthought collectivesâ, the different âthought stylesâ to which individuals are exposed over the course of their lives come into conflict. Individualsâ connections with different intellectual networks and nexuses are therefore a source of novelty and innovation, and the underlying cause for particular styles of thinking to evolve and adapt.
The character of the Marshallian thought style as it evolved under Pigouâs influence is important. There is no attempt in the following pages to paper over the differences between Marshall and Pigou. The reasons for the differences between Marshall and Pigou are important and are subject to investigation. To that end, consideration is given to Pigouâs biography and his formative intellectual development as an undergraduate at Cambridge University and as a young fellow at Kingâs College. In particular, consideration is given to the impact of the British idealist movement, and its various influences, upon the development of Pigouâs thought on methodology, ethics, and economics. The British idealist movement was an influential intellectual force in Great Britain from roughly 1865 through to the commencement of the First World ...
