Economics · A History of Economic Thought by V Lokanathan
Chapter 23 : ALFRED MARSHALL (1842-1924)
Table of contents55 sections
- 1.ALFRED MARSHALL (1842-1924)
- 2.Introduction
- 3.Key Terms
- 4.📌 Exam Tidbits
- 5.Nature and Scope of Economics
- 6.Key Terms
- 7.📌 Exam Tidbits
- 8.Economic Laws
- 9.Key Terms
- 10.📌 Exam Tidbits
- 11.Diagrammatic Approach
- 12.Key Terms
- 13.📌 Exam Tidbits
- 14.Marginal Utility and Demand
- 15.Key Terms
- 16.📌 Exam Tidbits
- 17.Consumer's Surplus
- 18.Key Terms
- 19.📌 Exam Tidbits
- 20.Elasticity of Demand
- 21.Key Terms
- 22.📌 Exam Tidbits
- 23.Supply and Cost of Production
- 24.Key Terms
- 25.📌 Exam Tidbits
- 26.Marshallian Theory of Value and Time Element
- 27.Key Terms
- 28.📌 Exam Tidbits
- 29.Prime Costs and Supplementary Costs
- 30.Key Terms
- 31.📌 Exam Tidbits
- 32.External Economies and Internal Economies
- 33.Key Terms
- 34.📌 Exam Tidbits
- 35.Representative Firm
- 36.Key Terms
- 37.📌 Exam Tidbits
- 38.Law of Returns
- 39.Key Terms
- 40.📌 Exam Tidbits
- 41.Distribution
- 42.Rent
- 43.Quasi-Rent
- 44.Wages
- 45.Interest
- 46.Profits
- 47.Key Terms
- 48.📌 Exam Tidbits
- 49.Marshall's Contribution to Monetary Economics
- 50.Key Terms
- 51.📌 Exam Tidbits
- 52.Conclusion
- 53.Key Terms
- 54.📌 Exam Tidbits
- 55.Quick-Recall Box
Chapter preview
ALFRED MARSHALL (1842-1924)
Introduction
Alfred Marshall was the leader of the second generation of the marginal utility school and is often described as a leading neo-classical economist.
- Background: Born in a middle-class family in London in 1842. His father was a cashier in the Bank of England (described as a domestic tyrant) who provided him with a good education. Marshall specialized in mathematics at Cambridge before studying economics.
- Academic Career: Served as professor of economics at Cambridge from 1885 to 1908.
- Major Works:
- "Economics of Industry" (1879)
- "The Principles of Economics" (1890) — his masterpiece.
- "Industry and Trade" (1919)
- "Money, Credit and Commerce" (1924)
- The Marshallian Synthesis: Marshall did not attempt to demolish the classical economics of Adam Smith, David Ricardo, and John Stuart Mill; rather, he sought to supplement it.
- Earlier Marginalists (e.g., Jevons): Completely rejected the classical theory of value based on cost of production.
- Marshall: Synthesized the utility theory of the Austrian economists with the cost of production theory of the classical economists, putting them together as a connected whole.
| School/Economist | Theory of Value Focus |
|---|---|
| Classical Economists (Smith, Ricardo, Mill) | Cost of production |
| Early Marginalist School (e.g., Jevons, Austrians) | Marginal utility |
| Alfred Marshall (Neo-classical) | Synthesis of both (Cost of production + Marginal utility) |
Key Terms
| Concept | Definition |
|---|---|
| Neo-classical economist | A descriptor for Marshall, reflecting his attempt to synthesize classical cost-of-production theories with the new marginal utility theories. |
📌 Exam Tidbits
- Alfred Marshall (1890): Published "The Principles of Economics", described by himself as "an attempt to present a modern version of old doctrines with the aid of the new work and with reference to the new problems of our own age."
- Haney on Marshall: "Marshall's synthesis, as we may call it, is not perfect, but it is a masterpiece, and as a whole has probably never been surpassed as an explanation of economic life."
- Jevons vs Marshall: Jevons completely rejected classical cost of production; Marshall synthesized it with marginal utility.
Nature and Scope of Economics
Marshall shifted the discipline's focus to include human…
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