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The Life and Contributions of Alfred Marshal
Alfred Marshall's Upbringing
July 26, 1842, in Clapham, England, Alfred Marshall was born. Being in an Evangelical home, his father had tried to push him into joining the ministry, which he chose not to pursue, moving towards the academia route instead. With his high aptitude in mathematics, Marshall entered St. John’s College, Cambridge in 1862 where he studied for the Mathematical Tripos, which was the university’s most prestigious degree, succeeding in 1865 with great honor (was exalted as second wrangler), at which point he was elected to a Fellowship with the school. As time passed, Marshall became more engrossed in the study of philosophy, and eventually specializing in the teaching political economy in 1968. By 1870, Marshall became committed towards the study into a new science of economics.
Throughout the 1870s, Marshall’s desire to develop newly refined economic ideas led him to study the economies of other nations in order to gain a broader perspective on the matter, leading him to visit the USA in 1875 in order to probe its economic conditions. Throughout the 70s, Marshall embarked on a book on international trade and problems of protectionism, and wrote many essays dealing with many theoretical ideas concerning the economy. In 1879, Henry Sidgwick had printed out four of Marshall’s theoretical appendices for the proposed international-trade volume for private circulation under the title The Pure Theory of Foreign Trade: The Pure Theory of Domestic Values. 1879 also marked the year of the publication of Marshall’s first book,
The Economics of Industry
, which he had written along with his wife, Mary Paley Marshall. After Alfred’s marriage to his wife, who was initially a student of his at Cambridge, Marshall left the school, and became the principal of and a professor the university college of Bristol, teaching political economy. During his time Bristol,
the Economics of Industry
was completed and published by the house of Macmillan, who continued as the publisher of all of Marshalls following works. The book had led to him becoming a staple in the economics firmament. He soon became the leader of the scientific school of economics in Britain following the death of W.S. Jevons in 1882. He eventually returned Cambridge in 1884 as professor of political Economy, where he sought to establish a new tripos for economics, succeeding in 1903.
Innovation in Economic Theory
In 1890, Marshall’s book,
Principles of Economics
had put him at the forefront of economic thinkers, as the book replaced Mill’s text as the most dominant English economic text. With the text, Marshall became known as the founder of standard microeconomics. His emphasis on both demand and supply being the main determinants of the price and output of a good, and the factors which shift both curves is a concept rationalized initially by Marshall in the sense of the way it is viewed today. He was also the one who initially conceptualized basic format of what creates the consumer and producer surplus. The theory he noted was that the consumer’s surplus is determined by the difference between the price which the buyer is willing to pay, and the price he/she actually pays. Additionally, he came to the conclusion that consumer value for good decreases with each additional unit acquired. As for producer surplus, he stated that it is determined by the difference between the payment the producer receives and the payment which he/she is willing to accept for the good.
Another main idea Marshall had introduced, and that is still applicable today, is the theory of three periods of a businesses’ progression: the first being where supplies are all fixed; the second being when capital is fixed, but the supply could be adjusted to add additional labor; and the third cycle being one cost and labor becomes all variable. With diminishing returns, a business would only increase quantity of labor and supplies to the point where the price would equal the marginal cost, achieving maximum efficiency.
Over time, through the works of his students John M. Keynes and Arthur Pigou and many others, The innovative ideas contrived by Marshall have been continually refined to formulate the economic system we live in today. Without the initial work of Marshall, the scope in which we are taught to behave in regards to the handling of our resources would likely be very different, and so much is to be owed to all of his dedication to setting up an efficient economy.
Alfred Marshall Biography Economic Theory. (n.d.). HISTORY OF ECONOMIC THEORY AND THOUGHT. Retrieved from
Alfred Marshall (1842-1924 ). (n.d.). Library of Economics and Liberty. Retrieved from
Alfred Marshall. (n.d.). Wisdom Supreme. Retrieved from
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