Chapter 9: If Markets Fail: Chadwick and Contemporary Society
9. If markets fail: Chadwick and contemporary society INTRODUCTION Edwin Chadwick was unquestionably a pioneer in addressing social and economic problems in a utilitarian manner. He has justly been lauded for his role in sanitation, labor, and educational reform. But in seeking ‘the greatest good for the greatest number’ Chadwick pushed the traditional (Smithian, classical) boundaries of both economic analysis and policy far beyond anything offered in the nineteenth century. There are first the amazing inventions of particular microanalytic concepts that would not rise above water until far into the twentieth century. The issues of moral hazard, product and personal liability placement, and the role of possibly welfare-lowering incentives within markets were discoveries of the highest order. (Naturally it would be a serious error to claim that he possessed a comprehensive contemporary understanding of these concepts.) Additionally, the integral role that technology played in markets – and in economic progress generally – was emphasized by Chadwick and almost completely neglected by mainstream classical economists. The attempt to meld economic theory and policy with an anecdotal statistical complement is also unique for his time and place, and is elevated to high art by him. Multiple regression, time series, and sophisticated statistical techniques were more than a century away, but Chadwick marshaled and massed all the anecdotal evidence he could for sanitation reform and so many other projects. Employing and integrating such tools into his research, Chadwick’s primary contributions were to an analysis of markets that failed, and rules and regulations that created common...
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