Discussion Paper New Series A study of the methodology of Arthur Lyon Bowley and Alfred Marshall Discussion Paper New Series No.2015-2 March 2015 Masashi KONDO [email protected] School of Economics Osaka Prefecture University Sakai, Osaka 599-8531, Japan A study of the methodology of Arthur Lyon Bowley and Alfred Marshall Masashi KONDO1 Abstract While the works of T.R. Malthus, W.S. Jevons, and F.Y. Edgeworth have long garnered scholarly attention, this is not the case for A. Marshall (1842–1924) and A.L. Bowley (1869–1957). This paper fills that gap. I examine the statistical methodology of Bowley, a follower of Marshall. I discuss his early work and Marshall’s influences on him. He was more a follower of Marshall’s applied economics than a theoretical economist like Keynes (1883–1946) or Pigou (1877–1959). Indeed, he applied theories from statistics and economics to contribute to the body of knowledge on social sampling. Keywords: Cambridge School, Alfred Marshall, Arthur Lyon Bowley, methodology 1. Introduction Throughout the history of statistical thought, the works of T.R. Malthus (1766– 1834), W. S. Jevons (1835–1882), and F.Y. Edgeworth (1845–1926) have garnered scholarly attention. However, the equal contributions of A. Marshall (1842–1924) and A.L. Bowley (1869–1957) have received relatively insufficient attention in comparison. Given this gap in the literature, this paper examines the statistical methodology of Bowley, a follower of Marshall and a developer of his economic theories. It was generally said that Marshall had formulated Ricardo’s and Mill’s economic theories early in his career, therefore it seems as though he might have employed a deductive methodology. However, throughout his academic career, from his days as a young scholar to late in his life, Marshall was interested in research factories and in industry in the UK and the US, and he collected and analysed data, 1 Osaka Prefecture University, 1-1 Gakuen-cho, Naka-ku Sakai-city Osaka 599-8531, Japan. (E-mail [email protected]) Tel +81- 72-254-9558 1 statistics, and facts on these topics. In particular, he placed high value on these kinds of works in addition to attaching great importance to his own research. Under Marshall’s influence, Bowley considered the application of statistics to the social sciences for the improvement of society. In this way, he contributed to the development of applied economics, suggesting that he was more a follower of Marshall’s applied economics than a theoretical economist like Keynes (1883– 1946) or Pigou (1877–1959). Indeed, he applied theories from statistics and economics to contribute to the body of knowledge on social sampling. However, Bowley did not always receive appropriate scholarly recognition for his work. According to Darnell (1981: 143), for instance, Samuelson stated that “Bowley’s work on wages and National Income accounting is well known, if only through the unfortunately named ‘Bowley’s Law’”2. Blaug (1986: 34) also underestimated and severely criticised him, stating, “The task of the statistician as Bowley saw it was to assist economic theory, not to challenge it”3. In contrast, Darnell described Bowley as “an economic statistician of the highest rank” and stated, “His work was motivated by genuine concern for his fellowman”. He continued: “there was nothing he did that was without practical, or at least a potentially practical, application”. Darnell also appreciated Bowley’s practical approach towards social reform, claiming “all his work is concerned by the common theme of social enquiry with the goal of change for the better”4. The sociologist Tomoeda further noted that Bowley “contributed much to the birth of a sociometry”5. According to Darnell, Bowley made three novel contributions to economics. First, Bowley was a “collector and compiler of economic statistics particularly on wages and national income”, a field that Marshall argued was crucial. Second, he was a pioneer of statistical techniques in the social sciences, in the development of mathematical economics and econometrics. Darnell placed high value on this particular field even though Blaug underestimated it. Third, he was “a pioneer of 2 Darnell 1981, p.143. 3 Blaug 1986, p.34. 4 Darnell 1981 p.168. 5 Tomoeda 2001, p.316. 2 sampling techniques”6. Dale and Kotz (2011) also examined the relevance of each of Bowley's contributions but overlooked his relationship with Marshall. Similarly, Groenewegen (2012) failed to classify Bowley as one of the 10 most prominent “minor Marshallians”. Based on the foregoing, from the perspective of Bowley’s intellectual history and given the above-mentioned lack of previous studies in this regard, the relationship between Bowley and Marshall is important for our paper. This article clarifies that Bowley studied multiple social science fields and contributed to social sampling by applying the statistical and economics techniques he learned from Marshall. The remainder of this paper is organised as follows. Section 2 introduces and assesses Bowley’s earlier studies. Section 3 presents Marshall’s statistical and economic methodology. Section 4 discusses Bowley’s Elements of Statistics and describes Bowley’s statistical methodology. Section 5 compares the methodologies of Marshall and Bowley, while Section 6 concludes. 2. A biographical note on Bowley’s early life7 Bowley was born in Bristol on 6 November 1869. He won a major scholarship to Trinity College, Cambridge to study mathematics and graduated as tenth wrangler in 1891. After graduating from his mathematical Tripos, he studied physics and chemistry under R. Appleton, who subsequently introduced him to Marshall. Bowley studied economics in earnest under the guidance of Marshall and “obtained both the Cobden prize in 1892 and the Adam Smith prize in 1894”8. He later won the Adam Smith prize for his essay titled “Change in Average Wages (Normal and Real) in the United Kingdom between 1860 and 1891”, while “a revised version of the paper was read to the Royal Statistical Society on 19 March 1895”9. Marshall commented that he had been “struck by the brilliancy of the 6 Darnell 1981, p.142. 7 This biographical note draws from Allen and George (1957), Darnell (1981), Blaug (1986), Dale and Kotz (2011), and the Oxford Dictionary of National Biography. 8 ODNB, Bowley. 9 Dale and Kotz 2011, p.11, Darnell 1981, p.143. 3 plan by which Mr. Bowley proposed to extract some information from the great mass of wage statistics which had hitherto been almost useless because of its fragmentary character”10. His particular research interests lay in the application of economic analysis to problems of social reform11. In this sense, Bowley began “his career as a mathematician but turned to economics because of its relevance to problems of social reform with which he was passionately concerned”12. Hence, Bowley’s encounter with Marshall transformed him from a mathematician into an economic statistician. On leaving Cambridge, Bowley seemed to be destined to teach mathematics in schools and he was on the staff at Brighton College and St John’s School, Leatherhead, from 1892 until 1899. However, “on Marshall’s recommendation, Bowley was invited to become one of the initial and very small staff, as part-time lecturer in statistics” when the LSE was founded in 189513. “In 1900 Bowley was appointed as Lecturer in Mathematics at Reading College, where he became Professor of Mathematics and Economics in 1907” until he resigned from his post in 191314. “At the LSE, he became part-time reader in statistics in 1908 and was given the title of professor in 1915”15. “When the University of London created a full-time chair in statistics in 1919, tenable at the LSE, this was the first chair ever created chair in statistics in the social sciences”16. Bowley became the first occupant of this chair and he held this post until his retirement in 1936. Through Elements of Statistics (1901), An Elementary Manual of Statistics (1910), and the Mathematical Groundwork of Econometrics (1924), Bowley became a pioneer of statistical methods for social science and economics. According to Collard, “Marshall encouraged Bowley to use statistics as an aid in discovering concrete truth”17. He later wrote Livelihood and Poverty (1915) and Has Poverty 10 Bowley 1895, p.280, Darnell 1981, p.143. 11 ODNB, Bowley. 12 Blaug 1986, p.31. 13 Allen and George 1957, p.236. 14 Darnell 1981, p.141. 15 ODNB, Bowley. 16 ODNB, Bowley. 17 Collard 1990, p.187. 4 Diminished? (1925), which solidified his position as a leader in the field of social surveying. According to Darnell, “Bowley was the most successful practitioner of sampling in his day”. He continued: “In his appreciation of the care required at all stages of a survey, in planning the project, in questionnaire design, in field-working, in proper instruction of interviewers, and in scientific interpretation and analysis of results, he set an exemplary standard”18. In the next sections, we clarify the relationship between Bowley and Marshall from the perspectives of their respective methodologies. 3. Marshall’s statistical and economic methodology In the early stages of his study, Marshall was very concerned with statistics. His economics professor inaugural address in 1885 was titled the “Present Position of Economics”, while he also presented a paper at the 1885 International Statistical Congress entitled the “Graphic Method of Statistics” 19 . This paper was subsequently published in the jubilee volume of The Journal of the Royal Statistical Society. In it, Marshall stated the following: The graphical method of statistics, though inferior to the numerical in accuracy of representation, has the advantage of enabling the eye to take in at once a long series of facts…. In accuracy the graphic method is inferior to the numerical.