The economics of industry

Alfred Marshall, an English economist, is widely regarded as the founder of the neoclassical school of economics. This school of thought, which followed the classical economists (Smith, Ricardo, and Mill, among others), gave a more balanced role to supply and demand as determinants of price, took more of an interest in the role of money, and show more greatly extended the role of marginal analysis. Marshall was born near London. His father, a clerk at the Bank of England, wanted his son to become a clergyman, but young Alfred was more interested in mathematics. After graduating from St. John's College at Cambridge, he lectured there for several years. When he married one of his former students in 1877, he had to leave Cambridge because of the celibacy requirements in force at the time. Marshall taught at University College, Bristol, and then at Oxford University, before returning to Cambridge in 1884 (the celibacy requirement having been lifted). Marshall did not publish extensively, but one book was outstanding. His "Principles of Economics," the first of a planned two-volume work, appeared in 1890. An instant success, it established Marshall as one of the world's leading economists. Its strength lay in its comprehensiveness and the degree to which it incorporated previous developments, along with Marshall's own observations, in a seamless fashion. The book was full of now familiar terms, such as consumer surplus, long- and short-run analysis, and external economies. The second volume, intended to cover the topics of foreign trade, money, trade fluctuations, and taxation, was never published because of Marshall's failing health and his penchant for exhaustive revision. He did, however, publish a less comprehensive volume, "Industry and Trade" (1919). A final volume, "Money, Credit and Commerce" (1923), was less ambitious and less creative. Despite his frail health, which troubled him throughout his career, Marshall lived to the ripe old age of 81. His stature was such that he is credited with founding a "Cambridge School of Economics," and his few publications forever changed the world of economics. (Bowker Author Biography) show less