Edited by Giacomo Becattini, Marco Bellandi and Lisa De Propis
Chapter 7: Industrial Districts in Marshall’s Economics
Brian J. Loasby 1. Introduction Marshall chose to allot a remarkable, and probably excessive, proportion of his time in the years preceding the publication of the Principles to the observation of productive activities in many areas of Britain, and also abroad (Groenewegen 1995, pp. 187–9, 206–13); visits to industrial districts (IDs) formed a natural part of this investigation. His analysis of IDs is correspondingly embedded in his elaborate discussion of the content and organisation of these productive activities in Book IV, which extends to 185 pages. Lionel Robbins (1932, pp. 69–71) subsequently judged Marshall’s approach to be fundamentally misguided, substituting ‘amateur technology’ for ‘a discussion which should be purely economic’, founded on ‘the governing factor of all productive organisation – the relationship between prices and cost ... In the modern treatment, discussion of “production” is part of the Theory of Equilibrium’. However, conforming to Robbins’s prescription would have frustrated Mar shall’s purpose in choosing to specialise in economics, which was to contribute to improving the condition of the people – not an uncommon Victorian aspir ation. A simple calculation demonstrated how little could be achieved by even the most drastic redistribution of income and wealth; the prime emphasis must be on increasing productivity, although this necessary condition was not suf fi ient to ensure the higher quality of life which was essential to Marshall’s c conception of progress – again like many of his contemporaries. That the means of increasing productivity might contribute to this ultimate objective was a recurrent theme...
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