The Cambridge economist who dominated economics in the UK from the late nineteenth century to the 1930s. After graduating in mathematics from Cambridge in 1865 and becoming a fellow of St John’s College, Cambridge, he turned to the study of ethics and psychology. It was his passionate interest in social issues that led him to economics, beginning with a translation of classical economics into mathematics and some papers on international trade theory. In 1877 he married a pupil, Mary Paley (with whom he wrote his first book, The Economics of Industry (1879)), and was appointed Principal and Professor of Political Economy at the new University College, Bristol. From 1885 to 1908 he was professor of political economy at Cambridge, retiring early to concentrate on his writing.
It was the publication of his Principles of Economics in 1890 that established his leadership of the economics profession. This beautifully written book, which relegates difficult points to footnotes and appendices, was intended to build on the theories of the CLASSICAL and MARGINALIST Schools an integrated analytical framework for the subject. His vast knowledge of economic history and the industrial and labour conditions of his day is evident throughout. He achieved an exposition of price theory still basic to modern microeconomics. ELASTICITY OF DEMAND, the distinction between short and long periods, the concept of ECONOMIC RENT, CONSUMER’S SURPLUS and internal and external ECONOMIES OF SCALE are all carefully explained. Some innovations, e.g.
the REPRESENTATIVE FIRM, were less successful. His sympathy for much of classical economics and his reading of psychology gave him an organic view of the development of firms. He intended to publish a second volume to cover industrial fluctuations, money and international trade but it was not until 1923 that he was able to do so in his Money, Credit and Commerce, when it was too late for him to write with the force he had achieved in his Principles or to refine his analysis. By achieving the separation of the teaching of economics from the other ‘moral sciences’ he soon made Cambridge the centre of UK economics. His star pupils PIGOU and KEYNES used many of his analytical tools and continued the veneration of him and his works.
