Monday, May 21, 2018

Review: Principles of Economics: An Introductory Volume, 8th edition, by Alfred Marshall

I recently noticed on Amazon that the negative reviews of Alfred Marshall's classic Principles of Economics tended to focus on the writing, charging Marshall with being an inefficient, overly wordy writer, and the book a tough read in comparison with other classic treatises like Adam Smith's The Wealth of Nations, or even John Stuart Mill's The Principles of Political Economy (themselves not exactly light reads, with Mill's book like Marshall's a textbook, with all that implies for someone trying to read it straight through). I must admit that I found the book something of a slog myself—enough that I gave some thought as to why this was the case.

As it happens, the essential concepts Marshall covers—cost and utility, marginal and otherwise; elasticity and substitution; equilibrium; diminishing and increasing returns—and their application to the production, consumption and distribution of wealth and income by way of supply and demand—are in themselves simple, intuitive and apt to be familiar to anyone who would pick up Marshall today. And Marshall can write with great lucidity and conciseness, not only when recounting history (as he does with great polish in the appendices), but when dealing with more intricately theoretical questions (as in his admirable summing up of scientific method in the early part of Book I, Chapter III). Additionally the gloss and summary chapters offer ample assistance for anyone who loses the thread of the discussion along the way.

However, the material being covered—an economic theory based on utility—is still rather more abstract and less "common sense" or empirical than Smith or Mill's earlier work. Its presentation is also more difficult than Stanley Jevons' earlier, founding exposition of marginal utility (he called it "final utility") in The Theory of Political Economy, also heavily reliant on long verbal descriptions of microeconomic models accompanied by a great abundance of algebraic equations and graphical demonstrations of the principles and examples discussed. The reason is that where Jevons merely presented the principal line of thought, and with relative brevity, Marshall devotes many hundreds of pages to exhaustively working out the implications, in the process creating (in Marshall's own words) not a "few long chains of reasoning," but a mass of "many short chains and single connecting links" that sacrifice clarity for completeness as they bury the reader in hypothetical yet gory details. (In fact, in Book V, Marshall himself tells the majority of his readers to skip over the section's second half altogether—some 77 pages, equal to an eighth of the main text!)

Perhaps especially given the nature of the theory (its elegant reductionism), this exhaustive working out of the implications may be less essential, less rewarding than with less compact, less tidy theories. And of course, the superabundance of mathematical content accompanying the exhaustive verbal explanation just conveys the same exact information as the verbal descriptions in a different manner. Bluntly put—if one gets the verbal descriptions, they find that working through the equations, curves and schedules doesn't really add anything to what they already knew. This is of course the norm for economics, but still, the meticulous instinctively do it, and here are bound to do it frequently and lengthily.

Accordingly, after plodding through these hundreds of very densely written pages, a reader already well-acquainted with these ideas (so much more widely diffused now than in Marshall's time) is apt to feel that they have not got much return on their effort. Knowing this does not make what may feel like an obligatory task for a student of economic theory or history any easier, but it is better to acknowledge why a book is "difficult" than just mouth about its "being hard," and if one can make allowance for all that, there is a good deal to admire here. Dated and problematic as the "Marshallian" view of economics is in many ways for readers from across the ideological spectrum (he was very much a Victorian strongly inclined to orthodoxy), Marshall, like most thinkers whose names get thrown around this way, was a rather more rigorous, nuanced thinker than his adherents, conscious of at least some of the limits of his analysis. His legacy doubtless includes some harmful misperceptions, the term he chose to use in the very title of the book—Principles of Economics (in place of the earlier term "Political Economy")—reflecting the tendency to treat economics as if it were physics, making the economic process seem"depoliticized" and above social constructs, rather than an arrangement grounded "in the contingent historical and political requirements of the prevailing social order."

Still, Marshall recognized the unavoidable imprecision of a "science of human nature" relative to classical mechanics (he compared it with the tides, not gravitation); the reality that economics derives its interest from the practical questions it addressed, and must be based on the hard facts of real life (no economic "Scholasticism" or anti-empiricism for him); the fact that people live in society, which is more than the sum of individuals, and that collective action is a thing that has to be analyzed as more than individual action writ large; that the role of time must be considered, and not simply the maximization of values but the cultivation of productive power must be taken into account in fostering national well-being; that in actual life labor is not simply another commodity, however much it may suit some to treat it that way, and that even those most narrowly committed to growth along orthodox lines cannot avoid facing the Social Question—he acknowledges all these early on, and endeavors to adhere to them subsequently. Of course, the conclusions to which these realizations lead will not satisfy those whose economic views tend in other directions, but it does show up any claim that a doctrinaire model-monger adequately lives up to Marshall's precedent, or the best in his work.

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