The Economics of Edwin Chadwick

The Economics of Edwin Chadwick

Incentives Matter

Robert B. Ekelund Jr and Edward O. Price III

The authors detail Sir Edwin Chadwick’s sophisticated conceptions of moral hazard, common pool problems, asymmetric information, and theory of competition, all of which differ starkly from those promulgated by Adam Smith and other classical economists. Also examined are Chadwick’s views on government versus market role in dealing with problems created by natural monopoly, and whether some or all market problems justify government regulation or alterations of property rights. The authors investigate Chadwick’s utilitarian approach to labor, business cycles, and economic growth, contrasting his modern view with those of his classical economic contemporaries.

Chapter 2: Chadwick’s Modernity

Robert B. Ekelund Jr and Edward O. Price III

Subjects: economics and finance, history of economic thought, law and economics, law - academic, law and economics


INTRODUCTION The long ninety-year life span of Edwin Chadwick (1800–1890) covers the most seminal and fruitful period in the development of modern economics. It encompasses what has become known as the ‘classical period,’ the marginal revolution, and the beginning of neoclassical economics in both English and Continental incarnations. To place things in time, consider the following: Chadwick entered an attorney’s office to study law the year David Ricardo’s Principles of Political Economy and Taxation was published (1817 [1969]), was still an attorney’s clerk when Malthus’ Principles of Political Economy (1820 [1951]) went into print, and engaged in close personal contact with such economic luminaries as Nassau Senior, John Stuart Mill and J.E. Cairnes. Furthermore, the Francophile Chadwick was as aware of the French ‘neoclassical’ writers on political economy as he was of the English ‘pioneers’ in marginalism such as Jenkin and Jevons.1 Chadwick was also fully cognizant of the romantic and historical criticisms of English political economy and the nascent mathematization of economics. He lived long enough to see the publication (and promulgation) of Walrasian economics, dying only in the year when Alfred Marshall published his monumental Principles of Economics (1890). Yet, while not totally unaffected, the thrust of Chadwick’s economic analysis and the source of his modernity were different from all of these developments. The purpose of this chapter is to explain, at least in brief, why and, to a degree, how this was so. The ultimate source of Chadwick’s uniqueness (and modernity) were his roots in...

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