A c pigou and the `marshallian` thought style a study in the philosophy and mathematics underlying cambridge economics

A.C. PIGOU AND
THE ‘MARSHALLIAN’
THOUGHT STYLE
A STUDY IN THE PHILOSOPHY AND MATHEMATICS
UNDERLYING CAMBRIDGE ECONOMICS

Karen Lovejoy Knight

PALGRAVE STUDIES IN THE
HISTORY OF ECONOMIC THOUGHT


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Karen Lovejoy Knight

A.C. Pigou and the
‘Marshallian’
Thought Style
A Study in the Philosophy and
Mathematics Underlying Cambridge
Economics


Karen Lovejoy Knight
Independent Scholar
Duncraig, WA, Australia

Palgrave Studies in the History of Economic Thought
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In loving memory of my father V.C. (Peter) Burton—
Busy boy Burton who borrowed biros and buried himself in books


Preface

My interest in the economic thought of A.C. Pigou arose when studying
welfare analysis and the challenges to Pigou’s method that emerged during the 1930s. This stimulated an interest in how economic ideas become
accepted, both in a disciplinary sense and in the wider acceptance of
economic “facts” as they are perceived by the general public. Reviewing
how Pigou was perceived by historians over the course of time revealed,
however, a general change in perspective as to his lineage as a Marshallian
economist. I noticed that in more recent times Pigou’s discontinuity,
rather than continuity, with Marshall’s style of economic thinking tended
to be emphasised. Views of Pigou as overly mechanistic and deterministic
seemed at odds with the general philosophical stance that he presented in

his collected philosophical essays and with his interest in and contribution to psychical research. As such, this study was motivated by a desire
to understand these opposing conceptions of Pigou as a Marshallian
economist by taking account of Pigou’s philosophical views and their
relevance to his economic analyses.
Duncraig, WA, Australia

Karen Lovejoy Knight

vii


Acknowledgements

I’d like to thank Michael McLure and Robin Ghosh at the University of
Western Australia who provided invaluable guidance, support, advice,
and scholarship during the completion of this project. A very special
word of thanks is also due to Greg Moore for his valued support and
comments.
The book is in part a result of substantial archival research undertaken
in the United Kingdom. I would like to acknowledge the kind assistance
of: Patricia McGuire, the archivist at the King’s College Archive Centre
in Cambridge; Rowland Thomas, the librarian at the Marshall Library
Archive in 2012, and Simon Frost, deputy librarian at the Marshall
Library in 2012; Angharad Meredith, Harrow School’s archivist; Alysoun
Sanders, the archivist at Macmillan Publishers Limited; and Helen
Cunningham, the archivist at the Cumbria County Council.
I would like to thank Geoff Harcourt and Robert Leeson for providing
helpful comments to Michael McLure in completing Karen Knight and
Michael McLure’s (2016) “A.C.  Pigou (1877–1959)”, in The Palgrave
Companion to Cambridge Economics, edited by Robert Cord, Palgrave

Macmillan, as some of this work has been included in Chap. 2, including
two anecdotes that Geoff Harcourt provided on the behaviour of Pigou
at Cambridge. I would also like to thank Jon Ffrench for his communications regarding his grandfather’s letters, which shed some insight into the
social life that Pigou was party to during the years before the First World
ix


x Acknowledgements

War. Nahid Aslanbeigui, J.E. King, Harry Bloch, and Simon Cook and
participants at conferences convened by History of Economic Thought
societies in Australia, Europe, the United States of America, and Japan
provided helpful comments on various aspects of this work as it
developed.
Many thanks also to Laura Pacey, Clara Heathcock, and editorial staff
at Palgrave Macmillan, who have provided invaluable advice and assistance during the completion of the project. I would also like to thank
Milly Main for editing services during the final stages of the project.
R.F.  Kahn’s unpublished correspondence has been reproduced with
the kind permission of Professor David Papineau. Although every effort
has been made to trace and contact copyright holders for the unpublished works of D. Robertson, A.L. Bowley, and W.M. Allen, it has not
been possible to find their literary executors. Permission has been granted
by the King’s College Archive Centre, the Cumbria Archive Service, and
Roger Hiley to reproduce the photographs appearing in the book.
Finally, thank you to James, Alana, Lassie, and Alfred as without your
love and support this work would not have been completed.


Contents

1A.C. Pigou and the Cambridge Tradition  1

2The Elusive A.C. Pigou 19
3The ‘Prof ’ and Marshallian Economics 79
4The ‘Marshallian’ Thought Collective and Thought Style115
5Balancing the Material and the Ideal151
6Mathematics and Formalism in Economic Theory205
7Conclusion257
Appendix A: Comparison of Sidgwick and Lotze263

Appendix
B: Moral Sciences Part II Syllabus and Recommend
Texts267
xi


xii Contents

Appendix C: Contents of Pigou’s Remaining Private Library279
Appendix D: Letters on The Theory of Unemployment, Kahn291
Appendix E: Letters on The Theory of Unemployment, Bowley293
Appendix F: Letters on The Theory of Unemployment, Allen299

Appendix
G: Letters on The Theory of Unemployment,
Robertson305
Appendix H: Comparison, The Theory of Unemployment’s
Corrigenda307
Index311


List of Figures

Fig. 2.1 Pigou’s depiction of the aggregate labour supply curve.
Citing: Aslanbeigui (1992a, p. 419)
Fig. 4.1 Thought styles and embedded theories. Citing:
Wolniewicz’s (1986, p. 220)

41
123

xiii


List of Photographs

Photograph 2.1 A.C. Pigou (‘The Prof ’) in 1952, courtesy of Peter Lofts 58
Photograph 2.2 Pigou in the Newlands House group photo in 1896.
Source: Photograph courtesy of Cumbria Archive
Service; reference DMar/10/2. Pigou is seated to the
direct left of Caroline and Frank Marshall
59
Photograph 2.3 The climbing house, Lower Gatesgarth, courtesy of
Roger Hiley
60
Photograph 2.4 1893 (Pigou standing directly behind Caroline and
Frank Marshall). Source: All from this series courtesy
of the Cumbria Archive Centre—Cumbria Archive
Centre ref. number: DMar/10/2
61
Photograph 2.5 1895 (Pigou seated to the direct left of Caroline
Marshall)61

Photograph 2.6 1896 (Pigou seated to the direct left of Caroline
Marshall)62

xv


List of Tables

Table 4.1 The Marshallian thought collective
Table 4.2 The Marshallian thought style

134
138

xvii


1
A.C. Pigou and the Cambridge Tradition

1.1 Introduction
The Cambridge tradition, through the largely partial equilibrium economics of Alfred Marshall and A.C. Pigou, and the Lausanne tradition,
through the general equilibrium economics of Léon Walras and Vilfredo
Pareto, are considered as constituting the two main schools of neoclassical
economic thought. The subject matter of this book is the consideration of
whether the economics of Arthur Cecil Pigou falls within the parameters
of a ‘Marshallian’ thought style. Alfred Marshall established a genuine
school of thought during his tenure as Professor of Political Economy at
the University of Cambridge. Pigou was groomed and mentored in the
Marshallian tradition of economic thinking. Indeed, Marshall was active

in his support of both Pigou’s fellowship application at King’s College
and Pigou’s later appointment as Marshall’s successor to the Cambridge
Chair of Political Economy. Both scholars shared a similar liberal and
utilitarian heritage, which had long coloured British political economy
through the works of the masters, from David Ricardo to J.S.  Mill.
Nevertheless, there were also striking differences in Marshall’s and Pigou’s
respective intellectual contexts. Marshall’s intellectual ­development and
© The Author(s) 2018
K. Lovejoy Knight, A.C. Pigou and the ‘Marshallian’ Thought Style, Palgrave Studies
in the History of Economic Thought, />
1


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K. Lovejoy Knight

pathway to the study of economics emerged from the rigours of the
Mathematical Tripos at Cambridge and his subsequent interests in psychology and ethics during the 1860s, at the height of the Victorian era.
This was a time when Darwin’s theory of evolution and its ramifications started to erode traditional beliefs and institutions that had formed
the foundations of British society, providing new ways of framing the
general nature of reality. The formative years of Pigou’s intellectual development were, by contrast, partly a product of his studies in the History
and Moral Sciences Triposes at Cambridge during the late 1890s, and his
wide reading between his appointment as a fellow at King’s College
Cambridge in 1902 and his appointment as Professor of Political
Economy at Cambridge in 1908. Consequently, the foundation for his
intellectual development was laid in the late Victorian and early Edwardian
periods. The scientific advances, social changes, and immanent critiques
arising in Marshall’s and Pigou’s respective scientific networks and nexuses had shifted considerably between their formative years of intellectual
development. The focus of this book is on the (largely Cambridge) forces

associated with the emergence of Pigou’s distinct style of thinking on
economic matters and welfare. That focus is pursued by exploring the
context of his development as a student and fellow at King’s College and
the conflicting twentieth-century assessments of Pigou’s Marshallian
heritage.
In more recent times, Marshallian studies have blossomed with new
perspectives emerging on the development of Marshall’s economic
thought. One product of these new perspectives on Marshall has been an
increasing emphasis on the discontinuities between the economics of
Marshall and Pigou. This has even led to questions being raised as to the
legitimacy of Pigou’s Marshallian pedigree. The following pages, however,
deal squarely with Pigou and the influences upon his economic thinking,
and attempt to provide a Pigouvian context to differences arising between
the style and the approach to economic analysis that Marshall imprinted
upon the discipline and those of his anointed successor. An alternate way
of viewing these differences is presented, not as discontinuities per se, but
rather as part of a natural process in the evolution of a style of thought in
economics.


  A.C. Pigou and the Cambridge Tradition 

3

1.2 A Marshallian ‘Thought’ Style
The central argument presented in this book is that, following Marshall’s
retirement, the style of economic thought associated with Marshall
evolved in an adaptive way through the work of his successor and, notwithstanding the many differences in Marshall’s and Pigou’s representations of economic theory, Pigou’s economics continued to fall within the
broad category of a Marshallian ‘thought style’. Nevertheless, characterising Pigou as a ‘Marshallian’ does require some clarification. The term
‘Marshallian’ has been employed in the secondary literature to refer to

specific aspects of the economic tradition that Marshall established at
Cambridge. Sometimes emphasis is given to the group of scholars at
Cambridge trained in Marshallian economics. At other times, emphasis
is given to the specific theoretical tools developed by Marshall and used
by others. Over time, different tools and theoretical instruments were
emphasised, meaning the general understanding of the term ‘Marshallian’
evolved over the course of the twentieth century. A third focus—advanced
in this book—considers differences between the particular theoretical
tools used by Marshall and his followers, and differences in the methodology of science and general approach to economic issues associated with
Marshall and his followers, as arising over the course of time as part of an
adaptive or evolutionary process. These differences are put into perspective by clarifying Pigou’s position as a ‘Marshallian’ economist by drawing
upon Ludwik Fleck’s notion of a ‘thought style’.
Fleck’s (1979 [1935]) concept of a ‘thought style’ is the chief conceptual tool employed to collect, interpret, and order the historical material,
and to justify the central contention, running through this book. This
historiographical approach is indirectly conveyed in the central contention articulated above. Specifically, the key argument presented in this
book is that the style of economic thought associated with Marshall and
Pigou, as the respective first- and second-generation leaders of Cambridge
economics as a distinct tradition, evolved in an adaptive way, notwithstanding the many differences in the way Pigou and Marshall represented
economic theory. As such, Pigou’s economics can be considered as having
continued to fall within the broad category of a Marshallian ‘thought


4 

K. Lovejoy Knight

style’, where the phrase ‘thought style’ in the context of this narrative
conveys the larger philosophical-cum-sociological meaning given to it by
Fleck. A full account of the Fleckian conceptual framework is presented
in Chap. 4, and hence the characteristics of this framework need be considered here only to the extent that the meaning of a Marshallian ‘thought

style’ is fleshed out.
Fleck contends that a style of thought is shared informally amongst a
group of people who practice science, which he refers to as a ‘thought
collective’. He further contends that the way ideas are understood by
members of a particular ‘thought collective’ is constrained by their particular ‘thought style’. Members of a ‘thought collective’ (in this case,
economists at Cambridge) come to share a particular style of thinking by
way of a process of didactic apprenticeship and education. But as individuals can be members of a number of different ‘thought collectives’, the
different ‘thought styles’ to which individuals are exposed over the course
of their lives come into conflict. Individuals’ connections with different
intellectual networks and nexuses are therefore a source of novelty and
innovation, and the underlying cause for particular styles of thinking to
evolve and adapt.
The character of the Marshallian thought style as it evolved under
Pigou’s influence is important. There is no attempt in the following
pages to paper over the differences between Marshall and Pigou. The
reasons for the differences between Marshall and Pigou are important
and are subject to investigation. To that end, consideration is given to
Pigou’s biography and his formative intellectual development as an
undergraduate at Cambridge University and as a young fellow at King’s
College. In particular, consideration is given to the impact of the British
idealist movement, and its various influences, upon the development of
Pigou’s thought on methodology, ethics, and economics. The British idealist movement was an influential intellectual force in Great Britain from
roughly 1865 through to the commencement of the First World War.
The philosophical tenor and influences of this movement changed considerably during its era. Importantly, it is recognised that the foundational period of Marshall’s intellectual development is located in the
early period of the movement, whereas the development of Pigou’s
thinking on science, ethics, and economics during the foundational


  A.C. Pigou and the Cambridge Tradition 

5

period of his intellectual development occurred during the late years of
the British idealist movement.
The general approach taken with regard to the exegesis of Pigou’s primary works also needs to be outlined. Pigou’s body of work is substantial.
It comprises more than a dozen books and 100 articles and pamphlets
over a working life that spanned over half a century. The course of his
career was punctuated by two world wars and the Great Depression and
he continued to produce scholarly work well after his retirement in 1943.
Although various aspects of Pigou’s large body of work are drawn on in
this book, his exposure to ethics and economics during his formative
early adult years have been accorded particular importance. During the
first decade of the twentieth century, early works in industrial relations
and unemployment, philosophy of science and ethics, and general applications of Marshall’s analytical framework to a range of economic problems, all contributed to the development of Pigou’s seminal work in
welfare economics, Wealth and Welfare (1912). Labour issues would
remain a main theme running through his work on welfare economics,
and at the height of the Depression years he published The Theory of
Unemployment (1933). Pigou’s The Theory of Unemployment has been
drawn on as a case study to examine particular aspects of his method and
style that represent a clear departure from the stylistic features associated
with Marshall’s relegation of mathematical formalism to appendices and
footnotes in published texts. But to address the fundamental provenance
of the differences between Pigou and Marshall, the greatest emphasis is
placed on the period prior to Pigou being raised to Professor of Political
Economy at Cambridge. In that regard, Pigou’s Burney Prize-­winning
essay, subsequently published in book form as Robert Browning as a
Religious Teacher (1901), his various philosophical essays published collectively as The Problems of Theism, and Other Essays (1908)—as well as
his 1909 paper published in the Proceedings of the Society for Psychical
Research, “Psychical Research and Survival after Bodily Death”—have
been particularly relevant in the reconstruction of his philosophical

vision and ethical position. In addition, Pigou’s retrospective pieces
reflecting on Marshall and developments within the profession of economics, which appear in various essays and addresses over the course of
his career, and in his essay on Marshall in Memorials of Alfred Marshall


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K. Lovejoy Knight

published in 1925, have also been particularly important in establishing
Pigou’s own perceptions of the traditions in which he had been trained.

1.3 A Pigouvian Perspective
Pigou’s lack of attention from intellectual historians that his path-­
breaking publications warrant is depicted by David Collard (1981) in
his book chapter in Denis O’Brien and John Presley’s edited compilation, Pioneers of Modern Economics in Britain. Collard notes that considerations of Pigou in a historiographical sense have suffered because
he has, so to speak, been caught between the “shadow” of Marshall and
“the pyrotechnics” of Keynes. This unsympathetic landscape was further consolidated by a blossoming of both Marshallian and Keynesian
studies in the 1980s. The number of these studies, which have included
major biographies and other important works on both Marshall and
Keynes, stands in contrast to the relatively fewer and later contributions
examining aspects of Pigou’s life and work from a squarely Pigouvian
perspective. This book centres on Pigou and employs a different
approach to gain insights in the broader development of his economic
thought. Unexplored archival material and Pigou’s lesser writings are
drawn on to gain insights into his life as an economist and a Fleckian
approach  is deployed to represent Pigou as both evolving away from
Marshall’s founding framework and yet remaining within a Marshallian
‘thought-style’.
The growth of ‘Marshall Studies’ has reinvigorated interest in the

institutional and evolutionary aspects of Marshall’s economics. Studies
examining these themes have tended to highlight the static, analytical,
and formalist nature of Pigou’s approach to economic theory compared
to that of his master, with many such studies referencing Krishna
Bharadwaj’s (1972) article on Marshall’s informal annotations in his
copy of Pigou’s Wealth and Welfare. Discontinuities between the two
economists’ approaches in these cases are emphasised. Keynesian
experts, on the other hand, have largely focused on Keynes’s identification of Pigou as a ‘classical’ economist who was wedded to the approaches
to economic thought found in the lineage of Ricardo, Mill, and


  A.C. Pigou and the Cambridge Tradition 

7

Marshall. Keynes emphatically made this point to differentiate his own
theoretical approach in The General Theory of Employment, Interest and
Money (1936) from those stemming from the traditions in which he
had been trained. In doing so, of course, Keynes was linking Marshall
and Pigou as defenders of the classical doctrine. As such, Keynesian
studies have tended to emphasise Pigou’s continuity with Marshall’s
thinking. In other words, the assessments of Pigou that have emerged
from the burgeoning studies of Marshall and Keynes have, in many
cases, been formed from the lenses of Marshall or Keynes.
Studies of Pigou in his own right have been scarce relative to studies of
Marshall and Keynes that make reference to Pigou’s work (the latter of
which use such references for the purpose of revealing what Keynes or
Marshall thought on a particular issue, or what Keynes or Marshall
thought of Pigou’s work on particular aspects of economics). It is only
recently that books dedicated solely to Pigou, notably by Nahid

Aslanbeigui and Guy Oakes (2015), and Ian Kumekawa (2017), have
been published.1 Nevertheless, a small, but growing, stream of studies
shedding light on Pigou and his contributions to economic thought have
arisen from four broadly defined types of studies: sociological studies of
Cambridge economists specifically and the economics profession generally; contextual studies focused on the philosophical tradition of utilitarian studies and welfare issues at Cambridge as compared to Oxford and
elsewhere; contextual studies of Pigou’s activities at Cambridge; and
rational reconstructions of aspects of Pigou’s contributions to economic
thought. Studies from these four perspectives that have contributed to
scholarship on Pigou are briefly reviewed in the paragraphs that follow,
not only to signal that a small, but rich, body of literature devoted to
Pigou has slowly begun to emerge from different corners of the sub-­
discipline of history of economic thought, but also to signal that none of
this literature is guided by the Fleckian framework that is adopted in the
work presented in this book.
With regard to sociological investigations of British economics, Alfred
William Coats (1967) is the landmark study of Marshall’s choice of Pigou
as his successor, inspiring further investigation of the topic (Coase 1972;
Coats 1972; Jones 1978). Pigou’s role in the professionalisation of the discipline has also been investigated by Coats (1993) and John Maloney (1976,


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K. Lovejoy Knight

1985). Various other historical studies have also addressed sociological
aspects of the economics discipline in which Pigou figures. This includes,
for example, studies undertaken by Nahid Aslanbeigui and Guy Oakes
(2002, 2007a, b, 2009, 2015), Alon Kadish (2010 [1989]), Keith Tribe
(2000, 2011, 2012), and Maria Cristina Marcuzzo and Annalisa Rosselli
(2005).

Contextual studies focused on the philosophical tradition of utilitarian studies and welfare issues at Cambridge as compared to Oxford and
elsewhere include those by Margaret O’Donnell (1979), Roger Backhouse
(2006), Steven Medema (2009), and Backhouse and Tamotsu Nishizawa
(2010). The more recent of the studies cited above have complemented
and extended the earlier work published by O’Donnell that highlighted
the influence of Henry Sidgwick upon Pigou and the development of
welfare analysis at Cambridge. These studies have provided a broader
context of the development of Pigou’s welfare analysis as embedded in
wider traditions arising at Cambridge during the late nineteenth century,
and in comparison to other disciplinary centres, including Oxford.
Authors examining rational and contextual treatments of aspects of
Pigou’s scholarly contributions from a ‘Pigouvian’ perspective have
increased modestly since the 1980s, commencing with significant contributions by Collard (1981, 1983) and Aslanbeigui (1989).2 In 2003,
emerging from debates on the development of Keynes’s General Theory,
Gerhard Michael Ambrosi (2003) provided a comprehensive rational
reconstruction and consideration of Pigou’s and Keynes’s respective theoretical analyses of unemployment during the 1930s. More recent contributions have included further work by Aslanbeigui (2010), Aslanbeigui
and Oakes (2012), and contributions from Michael McLure (2010,
2012, 2013a, b, c), Rogério Arthmar and Michael McLure (2017),
Atsushi Komine (2007), Satoshi Yamazaki (2008, 2012), and Norikazu
Takami (2009, 2011a, b, 2014).
Recent books dedicated solely to reconstructions of Pigou include those
by Aslanbeigui and Oakes (2015) as part of A.P. Thirlwall’s Great Thinkers
in Economics series, and Ian Kumekawa’s (2017) contextual piece.
Aslanbeigui and Oakes (2015) consider Pigou’s broad oeuvre in context
with his wider research programme and present Pigou as a logician of policy analysis. The book by Kumekawa (2017) presents a particular arc of


  A.C. Pigou and the Cambridge Tradition 

9

Pigou’s life, delving into Pigou’s changing political attitudes and relationship with the public over the course of his life, providing a somewhat
unsympathetic sketch of Pigou, the man.
This book builds on the literature cited above by dwelling on largely
unexplored manuscripts and aspects of Pigou’s life and works and, more
importantly, by providing a radical re-reading of Pigou’s relationship to
the Marshallian research framework by deploying a Fleckian lens to collect and interpret the historical particulars. This reinterpretation is executed in four related and overlapping stages. First, aspects of Pigou’s
biography are reconstructed to provide context to his life and times and a
general overview of his main scholarly contributions is presented. Second,
the existing secondary literature on Pigou is examined to reveal the changing interpretations of his status as a Marshallian economist. Third, differing perspectives of Pigou’s Marshallian roots are reconciled by employing
Fleck’s sociology of knowledge framework to provide an alternative sociological framing of the community of scholars at Cambridge during the
period spanning 1884–1943. This framing does not treat differences arising between Marshall’s and Pigou’s economic theories as discontinuities
and continuities per se but as degrees of difference that occurred as part
of an evolutionary process in Marshallian economic thinking. Fourth,
exegesis of selected aspects of Pigou’s body of work is undertaken and
drawn on to account for the degrees of difference that arose between
Pigou’s and Marshall’s styles of economic thinking. This includes exegesis
of Pigou’s total body of philosophical writings in order to reconstruct the
philosophical milieu at Cambridge during the formative period of his
intellectual development, and interpretation  of his book The Theory of
Unemployment, published in 1933, to develop a particular case study on
Pigou’s more explicit use of mathematics in an economic text.
As Fleck’s framework is employed, a largely sociological perspective on
the philosophical and methodological context of Pigou’s work in economics is presented. Consequently, a comprehensive analysis of the
development of Pigou’s entire body of economic writing is not developed; rather, the aspects of his work that shed the most light on the key
difference in the presentation of economic theory that arose between the
first- and second-generation leaders of Marshallian economics at
Cambridge are considered.

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K. Lovejoy Knight

1.4 The Structure of the Book
The account of Pigou developed in this book is presented in seven chapters. A general biographical account of Pigou’s life is offered in Chap. 2
that provides context to his life and times, intellectual development, and
scholarly contributions. This biographical narrative draws on and complements previous studies that broadly address aspects of Pigou’s life and
his early contributions to knowledge. Biographical studies of Pigou are
constrained by the lack of surviving personal papers and correspondence.
With available records on his life fragmented, a comprehensive account
of his life is not attempted. Rather, a chronological sequence of Pigou’s
professional life is presented, which is complemented by a thematically
arranged presentation of aspects of his personal life. There is, in particular, a focus on his family and youth; scholarly activities and contributions; approach to work and leadership at Cambridge; contributions to
public service; and aspects of his life that are relevant to the development
of his ideas. The latter includes an account of his friendships and connections and the impact of his wartime activities.
Chapter 3 reviews the changing perspectives that have developed in
the history of economic thought (HET) literature over the course of the
second half of the twentieth century and the early twenty-first century on
Pigou as a ‘Marshallian’ scholar. The finding of this review is that the
general understanding of what constitutes the term ‘Marshallian’ economics has evolved over this time and, as a result, two opposing
­perspectives of Pigou as a Marshallian economist have arisen in the literature. The first generally emphasises continuity between Pigouvian and
Marshallian economic thought, while the second generally emphasises
discontinuity between them.
The continuity thesis emphasises the similarity of Marshall’s and
Pigou’s views as to the purpose of economic science, particularly their
shared conceptions of the relationship between economics and ethics and
the analysis of demand. In contrast, the discontinuity thesis emphasises
Pigou’s failure to develop Marshall’s evolutionary conceptions of industrial development and his increasing formalisation of economic theory.
While aspects of the ‘continuity’ and ‘discontinuity’ theses have always

  A.C. Pigou and the Cambridge Tradition 

11

been present  in historians’ perceptions (or interpretations)  of Pigou, a
changing pattern is found to be related to the re-emergence and flourishing of Marshall Studies from the 1980s. Specifically, up to the 1980s, the
continuity thesis dominated, but after that decade, the discontinuity thesis dominated.
Chapter 4 outlines Fleck’s philosophy and sociology of scientific
knowledge and employs that approach to provide a new perspective on
Pigou’s economic thinking relative to that of Marshall’s. Fleck’s framework has been adopted as it provides for an evolutionary account of
knowledge, and therefore it represents a means for considering the potential for a fundamental and underlying unity in their styles of economic
thought—in the presence of significant differences—in some of the theoretical treatments employed. The various characteristics and attributes of
Pigou’s life and contributions that are identified in Chaps. 2 and 3 are
considered from the perspective of Fleck’s notion of the ‘thought collective’ and the related, but different, notion of ‘thought style’. These distinctions are then employed to develop an alternative and largely
consistent way of understanding the concept of ‘Marshallian’ economics
and to identify mechanisms to account for the ‘Marshallian’ thought style
that evolved under Pigou’s influence. In this way, the Fleckian framework
provides a means to interpret adaptation and modification in the
‘Marshallian’ thought style as part of an evolutionary process.
Chapter 5 presents a reconstruction of aspects of Pigou’s philosophical
biography to compare the context-cum-networks that shaped Pigou’s ideas
with those that shaped Marshall’s. In this chapter, utilitarian ­traditions as
they pertain to the study of political economy in Britain are noted and
then placed in the context of changes that occurred in philosophy and science during the second half of the nineteenth century. It is contended that
British idealism emerged as a counter-movement, first, in response to the
social dislocation and poverty caused by the processes of industrialisation
and, second, in response to the scientific advances that displaced traditional spiritual beliefs. It is also argued that the philosophical influences
dominant in Britain during the period of Marshall’s formative intellectual

development, which broadly corresponds with the early period of British
idealism, are distinct in many ways from the influences that had
become prominent by Pigou’s undergraduate years at Cambridge (and in