Marshall Revisited: A Reply

Author(s): Hans E. Jensen

Source: Journal of Economic Issues, Vol. 19, No. 4 (Dec., 1985), pp. 967-974
Published by: Taylor & Francis, Ltd.
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Je jOURNAL OF ECONOMIC ISSUES

Vol. XIX Number 4 December 1985

Notes and

Communications

Marshall Revisited: A Reply

In a note in a recent issue of this journal, Thomas D. Birch disputed my

claim that (Alfred) "Marshall's ethics were Utilitarian." Birch did so on

the basis of an examination of "Marshall's 'ethical vision' in the light of

his concept of economic chivalry as presented in his essay, 'Social Possi-

bilities of Economic Chivalry.'" Actually, Birch did more than criticize

my position: he put forth a counterclaim according to which "Marshall's

normative vision is embodied in his version of economic chivalry, not

Utilitarian ethics." As a matter of fact, said Birch, "Marshall made an

explicit rejection of Utilitarianism" in a footnote in his Principles of Eco-

nomics [Birch 1985, pp. 194, 198, 195].

What did Marshall proclaim in this footnote in which he ostensibly

"lamented" that economists have been accused of harboring a philosophy

of hedonism [Birch 1985, p. 195]?

In the first place, he was concerned with "motives to all action" [Mar-

shall 1956, p. 14n; emphasis added]. In elaborating on this particular as-

pect of human nature, Marshall's point of departure was the following

statement in the text of the Principles:

In the broader uses of . . . [economic] studies, when they are being applied

to practical problems, the economist, like every one else, must concern

himself with the ultimate aims of man, and take account of differences in

real value between gratifications that are equally powerful incentives to

action and have therefore equal economic measures. A study of these

measures is only the starting point of economics: but it is a starting point

[Marshall 1956, p. 14; emphasis added].

967

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968 Notes and Communications

It was on this behaviorally flavored commentary that Marshall elab-

orated as follows in the first part of the footnote in question:

The objections raised by some philosophers to speaking of two pleasures

as equal, under any circumstances, seem to apply only to uses of the

phrase other than those with which the economist is concerned. It has

however unfortunately happened that the customary uses of economic

terms have sometimes suggested the belief that economists are adherents

of the philosophical system of Hedonism or of Utilitarianism. For, while

they have generally taken for granted that the greatest pleasures are those

which come with the endeavour to do one's duty, they have spoken of

'pleasures' and 'pains' as supplying motives to all action; and they have

thus brought themselves under the censure of those philosophers, with

whom it is a matter of principle to insist that the desire to do one's duty

is a different thing from a desire for the pleasure which, if one happens

to think about the matter at all, one may expect from doing it; though

perhaps it may not be incorrectly described as a desire for 'self satisfac-

tion' or the 'satisfaction of the permanent self' [Marshall 1956, p. 14nl.

Although he might have walked a philosophical tightrope when he con-

structed this part of the footnote, it is fairly clear that Marshall was

here concerned with interpretations of human motivations and behavior.

Hence he made no reference to his own ethical beliefs.

Secondly, as shown in Birch's partial quote from the second part of

Marshall's footnote [Birch 1985, p. 195], the latter also referred to the

"large use of 'pain and pleasure' " by certain Benthamites [Marshall 1956,

p. 1 5n]. By this phrase, Marshall alludes to the said Benthamites' conten-

tion that feelings of pain and pleasure supply the "motives to all action"

[Marshall 1956, p. 14n; emphasis added]. The following is the full text of

that part of Marshall's footnote in which this observation is found:

It may however be noted that the followers of [Jeremy] Bentham (though

perhaps not Bentham himself) made this large use of 'pain and pleasure'

serve as a bridge by which to pass from individualistic Hedonism to a

complete ethical creed, without recognizing the necessity for the intro-

duction of an independent major premise; and for such a premise the

necessity would appear to be absolute, although opinions will perhaps

always differ as to its form. Some will regard it as the Categorical Impera-

tive; while others will regard it as a simple belief that, whatever be the

origin of our moral instincts, their indications are borne out by a verdict

of the experience of mankind to the effect that true happiness is not to be

had without self-respect, and that self-respect is to be had only on the

condition of endeavouring so to live as to promote the progress of the

human race [Marshall 1956, p. 15n].

Clearly, this part of the footnote is in the nature of a brief commentary

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Notes and Communications 969

on certain aspects of the Benthamite theory, or philosophy, of ethics.

Again, Marshall did not put forth his own personal ethics, Utilitarian or

otherwise, in the second part of the footnote in question. As in the first

part of the note, there is not one hint at what he thought should, or ought

to, be.

Marshall's Personal Ethics and Their Source

It may fairly be argued, therefore, that an appeal to the text of this par-

ticular footnote in the Principles does not shed any light on the problem

of whether Marshall's personal ethics were Utilitarian or not. In this con-

nection, I should like to make one point clear. My observation that Mar-

shall's ethical beliefs were Utilitarian in nature [Jensen 1983, pp. 70-71]

should not be construed to mean that I argue that Marshall formulated a

theory of ethics a la Bentham's thesis that "Nature has placed mankind

under the governance of two sovereign masters, pain and pleasure" so that

it is "for them alone to point out what we ought to do." Rather, I maintain

that Marshall derived his personal ethics from Bentham's behavioral prop-

osition that it is also for these two sovereign masters "to determine what

we shall do" [Bentham 1962, p. 1]. In other words, as Birch admits,

"Marshall's theory of behavior was certainly Utilitarian" [Birch 1985, p.

195]. But let me be specific and start with the following value-laden be-

havioral pronouncement by Marshall.

We must take account of the fact that a stronger incentive will be required

to induce a person to pay a given price for anything if he is poor than if

he is rich. A shilling is the measure of less pleasure, or satisfaction of any

kind, to a rich man than to a poor one. A rich man in doubt whether to

spend a shilling on a single cigar, is weighing against one another smaller

pleasures than a poor man, who is doubting whether to spend a shilling

on a supply of tobacco that will last him for a month. The clerk with

? 100 a-year will walk to business in a much heavier rain than the clerk

with ?300 a-year; for the cost of a ride by tram or omnibus measures a

greater benefit to the poorer man than to the richer. If the poorer man

spends the money, he will suffer more from the want of it afterwards than

the richer would. The benefit that is measured in the poorer man's mind

by the cost is greater than that measured by it in the richer man's mind

[Marshall 1956, p. 16].

This ... leads to the conclusion that an increase by (say) a quarter of the

wages of the poorer class of bona fide workers adds more to the sum total

of happiness than an increase by a quarter of the income of an equal num-

ber of any other class [Marshall 1956, p. 597].

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970 Notes and Communications

According to Marshall, there is a limit to the growth of income-induced

happiness, however: "The direct increase of happiness that results from

increasing wealth becomes less and less as the wealth increases." For ex-

ample, a "person who has already a few hundred a year may ... be nearly

as happy as he chooses to be." By the same token, a person with an income

substantially above this level would suffer hardly any diminution of his

happiness, or "pleasure," if he should experience even a considerable

reduction of his income [Marshall 1889, p. 238].

As far as Marshall was concerned, the ethical implications of these

Utilitarian propositions were obvious: "Take from the rich and give to

those who are less rich" [Marshall 1900, p. 386]. He was convinced, how-

ever, that there were strict limitations in the long run to the efficacy of

direct income redistribution via the government's budget. An ethically

acceptable distribution of income could be established permanently only

by increasing the earning capacity of the current poor. This would neces-

sitate a rise in public investments in human capital. Consequently, Mar-

shall recommended that the "State should give . .. a good general and

technical education to all" and higher education to those who qualified

scholastically. If this came to pass, even those workers who did not bene-

fit from the new educational opportunities would have their "earnings ...

increased." The members of this class of "lower labour" would experi-

ence a rise in their income because they would be "made scarce" by vir-

tue of the fact that the better educated and trained among them would be

"pushed up to higher class work." And, said Marshall, the resultant "re-

distribution" of work and income "increases the sum total of human hap-

piness" [Marshall (Lecture 3) 1883, pp. 209, 208].

Moreover, Marshall pointed out that total happiness would be in-

creased still further if the expanded educational activities, and the provi-

sion of the needed new facilities, were financed from taxes levied in ac-

cordance with a progressive rate structure. That is to say, "the poorer

classes should contribute a smaller percentage of their revenue than the

middle classes; and these, again, a smaller than the richer classes" [Mar-

shall 1926, p. 337]. Thus, in Marshall's opinion, there would be an "in-

crease of happiness" if the "rich" were "taxed more heavily than they are,

in order to provide for their poorer brethren the material means for a

healthy physical and mental development" [Marshall 1885, p. 162; 1889,

p. 229].

In view of the above, I do not find it difficult to accept F. Y. Edge-

worth's verdict that Marshall, "in the vein of Bentham. . . aimed at in-

creasing the 'sum-total of happiness.' " Hence, as far as Marshall was con-

cerned, economics is "an instrument, by the perfection of which it might

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Notes and Communications 971

be possible to better the conditions of human life" [Edgeworth 1925, p.

71; Pigou 1925, p. 82]; conditions that he evaluated on ethical standards

emanating from his Utilitarian theory of human nature and behavior. And

to repeat, this theory moved Marshall to conclude that "the same sum of

money measures a greater pleasure for the poor than for the rich." In other

words, "a pound's worth of satisfaction to an ordinary poor man is much

greater than a pound's worth of satisfaction to an ordinary rich man"

[Marshall 1885, p. 162; 1956, p. 108].

In one of those lectures on Moral and Political Philosophy that he de-

livered to female students in 1873-1874, Marshall himself pointed out that

there is, in principle, a close connection between the Utilitarian theory of

behavior, on the one hand, and a set of operational ethical beliefs on the

other:

There is a popular usage of the word 'utilitarian' in which utilitarian con-

siderations are opposed to ethical [considerations] or at all events distinct

from them. I have tried to show that this usage of the phrase 'a utilitarian

philosophy' is so utterly trivial and foolish that it is not worth while to

discuss it. I have argued that not only is ethical well-being a portion of

that well-being which any reasonable utilitarian system urges us to pro-

mote, but that it is much the most important element of that well-being

[in M. P. Marshall 1947, p. 19].

Economic Chivalry

How do the above-quoted Utilitarian notions of Marshall dovetail with

his own concept of economic chivalry? An answer to this question may be

found in some of those conclusions that he reached on the basis of his

work in two distinct fields. These areas are, on the one hand, his empiri-

cally based descriptions of the contemporary economic order and, on the

other, his formulation and application of an "evolutionist"' theory of hu-

man nature-a theory he merged with his Benthamite doctrine of motiva-

tions and behavior [Jensen 1983, pp. 74-79].

As far as Marshall's empirical inquiries are concerned, they fostered in

him a disgust with, and resentment of, the manner in which real income

was used in the economic society of his time. Hence he agreed with the

''common saying that we have more reason to be proud of our ways of

making wealth than of our ways of using it." For example, said Marshall,

the "well-to-do classes expend vast sums on things that add little to their

happiness and very little to their higher well-being." It was not just the

rich, however, who suffered from an illusion concerning the true shape of

a civilized person's utility-grounded preference schedule. In their attempts

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972 Notes and Communications

to emulate the lifestyle of the upper classes, even "the working classes buy

many things that do them little good and some things that do them harm"

[Marshall 1907, p. 3241. Moreover, the outlooks of the actors in the eco-

nomic drama had been molded in, and by, a harsh capitalistic environ-

ment. Consequently, it was accepted as a matter of course by the populace

that "competition must be greedy." This was an attitude that "troubled"

Marshall [Marshall 1919, n.p.].

The evolutionist portion of Marshall's theory of human nature con-

vinced him, however, that there were grounds for optimism. This theory

showed, he argued, that it would be possible to bring about a "change in

human nature" because of the considerable "pliability" of that very same

nature. According to Marshall, human nature had actually changed in the

course of the history of Western man. The "growth of knowledge" and its

increased application in the "production, distribution and consumption of

wealth" had "made and are making deep and rapid changes in human na-

ture" [Marshall 1956, pp. 622, 631; 1885, p. 154; 1956, pp. 631-32;

1885, p. 154]. In particular, human wants, and thereby the individual's

ranking of satisfactions, have changed. In Marshall's words, "each step

upwards" in the process of economic development "is to be regarded as

the development of activities giving rise to new wants." Thus when he

read the record of the past in the light of his nature-cum-nurture theory of

human motivations and actions, Marshall came to the conclusion that the

''whole history of man shows that his wants expand with the growth of his

wealth and knowledge" [Marshall 1956, pp. 76, 186].

Marshall viewed this pliability of human nature and wants as an in-

strument that could be used by educators, especially by the economists

among them, for the purpose of bringing about a refinement of economic

tastes, propensities, and activities. He opined, for example, that there was

"much latent chivalry in business life, and that there would be a great deal

more of it if we sought it out and honoured it as men honoured the media!-

val chivalry of war." Significantly, Marshall's evolutionist interpretation

of history led him to believe that such an enhancement of chivalrous atti-

tudes would indeed be possible. "War is more cruel even than competition

to oust rivals from their work and living," observed Marshall. Neverthe-

less, he added, "there grew up around it a chivalry which brought out the

noble, emulative side of war, and even some of the finer sympathies." He

was therefore confident that if "we can educate this chivalry" in the eco-

nomic realm, "the country will flourish under private enterprise." And he

hypothesized that if "we can do this for a generation or two, then people

bringing the latest news from this world may talk boldly of the chivalry of

wealth" [Marshall 1907, pp. 330, 346, 330].

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Notes and Communications 973

In other words, Marshall was convinced that the right kind of educa-

tion would "raise people to a higher level; to become not only more effi-

cient producers but also wiser consumers, with greater knowledge of all

that is beautiful, and more care for it." Once this milestone has been

reached on the road of human evolution, people's feelings of pleasure, or

utility, will be much more refined and cultured than were such human

sensations in the closing decades of the nineteenth century. But this is not

the whole story, according to Marshall. Once such a transformation of

feelings and attitudes is finally an accomplished fact, people may actually

"be proud of the elevation of life which has been achieved by training the

finer elements of human nature to full account in the production of wealth

and in its use" [Marshall 1885, p. 173; 1907, p. 330]. Needless to say,

Marshall was convinced that such a development would be tantamount to

an increase in both the quality and quantity of human happiness.

Conclusion

In my opinion, the record is clear. Marshall's personal ethics were Util-

itarian in the sense that they were rooted in his Benthamite theory of moti-

vation and behavior. His "theme" of economic chivalry [Birch 1985, p.

196], on the other hand, was the form that Marshall gave his evolutionist

theory of how happiness, in the Utilitarian sense, can be improved quali-

tatively by means of public policy in the realm of education.

This Marshallian twist may, of course, have been the result of a Vic-

torian do-gooder's wishful tinkering with that which he might have viewed

as a body of crude and coarse Benthamite ethics; hence his efforts to refine

such ethics. Refined Utilitarian ethics are still Utilitarian ethics, however.

Hans E. Jensen

The author is Professor of Economics, The University of Tennessee, Knoxville.

He would like to thank the Faculty Board of Economics and Politics, University of

Cambridge, for permission to quote from the Marshall Papers in the Marshall Li-

brary of Economics and to express his appreciation to Mr. A. R. Finkell, Librarian,

and his staff in that Library for their assistance and efficiency in locating source

materials. The author is also grateful for financial support from the Capital Gifts

Endowment of the College of Business Administration, The University of Tennessee,

Knoxville. The usual disclaimers apply, of course.

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974 Notes and Communications

References

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Birch, Thomas D. 1985. "Marshall and Keynes Revisited." Journal of Eco-

nomic Issues 19 (March): 194-200.

Edgeworth, F. Y. 1925. "Reminiscences." In Memorials of Alfred Marshall,

edited by A. C. Pigou, pp. 66-73. London: Macmillan.

Jensen, Hans E. 1983. "J. M. Keynes as a Marshallian." Journal of Economic

Issues 17 (March): 67-94.

Marshall, Alfred. 1883. "Lecture 3. Remedies for Poverty: Is Nationalisation

of Land a Remedy?" In "Alfred Marshall's Lectures on Progress and Pov-

erty," by George J. Stigler. The Journal of Law & Economics 12 (April

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. 1885. "The Present Position of Economics (1885)." In Memorials

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1889. "Co-operation (1889)." In Memorials, pp. 227-55.

. 1900. Letter to Bishop Westcott of January 24. In Memorials, pp.

386-85.

. 1907. "Social Possibilities of Economic Chivalry (1907)." In Me-

morials, pp. 323-46.

. 1919. Letter to Mr. Hilton of April 14. In the Alfred Marshall Pa-

pers, Box 3 (62). The Marshall Library of Economics, the University of

Cambridge.

. 1926. Official Papers, edited by J. M. Keynes. London: Macmillan.

. 1956. Principles of Economics. 8th ed. London: Macmillan [1890].

Marshall, Mary Paley. 1947. What I Remember. Cambridge: At the University

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Pigou, A. C. 1925. "In Memoriam: Alfred Marshall." In Memorials of Alfred

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Comment on "The Instrumentalisms of

Dewey and Friedman"

In his paper in the December 1984 issue of this journal, James R. Wible

has performed a useful task in noting the different meanings attached to

the word "instrumentalism" by different writers, a point to which Wendell

Gordon also called attention in his 1983 AFEE presidential address.

Unfortunately, despite his apparent knowledgeability in the area of

"contemporary philosophy of science," Wible has not demonstrated his

conclusion, which reads:

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