- Elgar original reference
Edited by Richard Arena, Agnès Festré and Nathalie Lazaric
Chapter 3: Knowledge in Marshall
Brian J. Loasby 3.1 OVERVIEW It has often been remarked that Alfred Marshall – in contrast to Keynes – wrote in a style so bland as to conceal the distinctiveness of what he was saying. Yet there is nothing bland about his presentation of capital as ‘the main stock of wealth regarded as an agent of production’ at the very beginning of Book IV of the Principles. Capital consists in a great part of knowledge and organization: and of this some part is private property and other part is not. Knowledge is our most powerful engine of production; it enables us to subdue nature and force her to satisfy our wants. Organization aids knowledge; it has many forms, e.g. that of a single business, that of various businesses in the same trade, that of various trades relatively to one another, and that of the State providing security for all and help for many. (Marshall, 1920, pp. 138–9) Knowledge is clearly central to Marshall’s conception of an economic system, and to his view of how that system works; it is also central to Marshall’s conception of how economists should attempt to understand and analyse such systems. Since these concerns with process have been marginalized in much of subsequent economics, they need to be examined; and this examination should be based on an understanding of the reasons for Marshall’s distinctive attitude. The two reasons most widely recognized are his observation of the remarkable industrial developments taking place during his lifetime, which rested on...
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