Alfred Marshall on Nineteenth-Century English Economics and Economists

Alfred Marshall (1885): Cambridge Inaugural Lecture: The Present Position of Economics "It is commonly said that those who set the tone of economic thought...

...in England in the earlier part of the century were theorists who neglected the study of fact, and that this was specially an English fault. Such a charge seems to be baseless. Most of them were practical man with a wide and direct personal knowledge of business affairs. They wrote economic histories that are in their way at least equal to anything that has been done since. They brought about the collection of statistics by public and private agencies and that admirable series of parliamentary inquiries, which have been a model for all other countries, and have inspired the modern German historic school with many of their best thoughts.

And as to their tendency to indulge in excessively abstract reasonings, that, insofar as the charge is true at all, is chiefly due to the influence of one masterful genius, who was not an Englishman, and had very little in common with the English tone of thought. The faults and the virtues of Ricardo's mind are traceable to his Semitic origin; no English economist has had a mind similar to his.

The change that has been made in the point of view of economics by the present generation is then not due to the discovery of the importance of supplementing indicting deduction by introduction, for that was well-known before. It is due to the discovery that man himself is in a great measure a creature of circumstances and changes with them; and the importance of this discovery has been accentuated by the fact the growth of knowledge and earnestness have recently made and are making deep and rapid changes in human nature....

The chief fault then in English economist the beginning of the century was not that they ignored history and statistics... [but that] they regarded man as so to speak a constant quantity.... The people whom they know were chiefly city men; and they took it for granted tacitly that other Englishmen were very much like those.... This did... Great harm when they treated of the relations between the different industrial classes. It led them to regard labor simply as a commodity without throwing themselves into the point of view of the workman; without allowing for his human passions, his instincts and habits, his sympathies and antipathies, his class jealousies and class adhesiveness, his lack of knowledge of the opportunities for free and vigorous action. They therefore attributed to the forces of supply and demand a much more mechanical and regular action than they actually have; and lay down laws with regard to profits in wages that did not really hold....

But their most vital fault was that they did not see how liable to change are the habits and institutions of industry. In particular, they did not see that the poverty of the poor was the chief cause of that weakness and inefficiency which are the cause of their poverty: they had not the faith, that modern economists have in the possibility of a vast improvement in the condition of the working classes.

The perfectibility of man had indeed been asserted by Owen and other socialists. But their views were based on little historic and scientific study; and were expressed with an extravagance that move the contempt of the businesslike economists of the age. The Socialists did not attempt to understand the doctrines which they attacked; and there was no difficulty in showing that they had not rightly apprehended the nature and efficiency of the existing economic organization of society. It is therefore not a matter for wonder that the economists, flushed with their victories over a set of much more solid thinkers, did not trouble themselves to examine any of the doctrines of the socialists, and least of all their speculations as to human nature.

but the socialists were men who had felt intensely, and who knew something about the hidden Springs of human action of which the economists took no account. Buried under their wild rhapsodies there were shrewd observations and pregnant suggestions from which philosophers and economists had much to learn. And gradually their influence began to tell...