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Alfred Marshall on Human Capitalandfuture Generations

Alfred Marshall on Human Capitalandfuture Generations

ffesMee Vol, 53, No. 4, Oct, 2002

Alfred MarShall on Human CapitalandFuture Generations

Tamotsu Nishizawa

I hold that the most important of a nation is that which is invested in the physical, mental, and moral nurture of its people. (Marshall to the Editor of 7";he Tla;mes, 13 November 1909)

growing earnestness of the age. [ibid: 2-4] 1. Introduction : `The Spirit of the Age' -1 Pigou addressed in the same kind of spirit Reviewing Marshall's Principles of Eto- in his inaugural lecture as the Cambridge nomics, Edgeworth wrote that there was one Professor of Political as successor element there to be searched in vain among of Marshall : `The least imaginative among the older `the modern element, us sometimes sees with vividness the faces of the spirit of the age', which prompted the the suffering and the degraded who have been question : `Is it necessary that large numbers worsted in the industrial struggle. ..No doubt, of the people should be exclusively occupied those who feel these things most keenly are with work that has no elevating character ?' not always '. He should be glad if [Edgeworth 1890: 12] a man comes to because of his In the "Introduction" of his Pim'nciples, in Edgeworth's Mathematical ky- Marshall stated ' chics or Fisher's APPreciation and interest. ' In addition to the Residuum, there are vast But he should be far more glad `if he comes numbers of people both in town and coun- because he has walked through the slums of try who are brought up with insufficient London and is stirred to make some effort to food, clothing, and house-room; whose help his fellow-men'. `Wonder', Carlyle said, education is broken off early in order that `is the beginning of philosophy':`Social they may go to work for ;who enthusiasm', Pigou added, `is the beginning of thenceforth are engaged during long hours economic science'. [Pigou 1908 : 12-13] in exhausting toil with imperfectly nouri- Edgeworth continued his "Review" as fol- shed bodies, and have therefore no chance lows. Marshall declared against the pre- 1 of developing their higher mental faculties. tended harmonies of economic optimism ; he [Marshall 1961A : 2-3] broke with the `hangers-on of the science who used it simply as an engine for keeping the And observing the steady of the working-classes in their place'. He was working classes in the 19th century, he posed preceded by and F. A. the question `whether it is really impossible Walker, by Jevons, and Sidgwick who best that all should start in the world with a fair taught that `the art of does chance of leading a cultured life, free from not necessarily consist in inaction' and was to the pains of poverty and the stagnating influ- found modern `welfare' economics. But in ences of excessive mechanical toil ' and this some sense more convincingly Marshall ' question is being pressed to the front by the reasoned that `it would be theoretically pos- 306 ff es M ee sible for a government by fiscal arrange- ments admittedly within in its province, by a 596] Generally speaking, Pigou･ argued, `every- nicely adjusted system of taxes and bounties, body prefers present pleasures or satisfac- to increase the welfare of its citizens'. While tions of given magnitude to future pleasures thus recoiling from extreme individualism or satisfactions of equal magnitude'. It the author of the Pri'ncipies `may be suspected implies that `our telescopic faculty is defec- of leaning towards a moderate '. tive', and `we see future pleasures, as it were, [Edgeworth 1890:12-13;Hutchison 1953: on a diminished scale'. Thus `people distrib- 47]. ute their resources between the present, the As is well-known, in his Preface to industi y near future and the remote future on the and 7'hrade, Marshall described how he `devel- basis of a wholly irrational preference'. oped a tendency to socialism', which was Mortality provides a further check to taking fortified later on by J. S. Mill's posthumous the long view. For a person who carries out "Chapters on Socialism" in the Fbrtnightly long-term , `the satisfaction with Review (1879). But as he wrote to Helen which his desire is connected is not his own Bosanquet (28 September 1902), `it is more satisfaction, but the satisfaction of somebody important to dwell on the truths in Mill's else, ..possibly somebody quite remote in Liberly than on those in his ESsays on Social- blood or in time, about whom he scarcely ism [i. e. "Chapters on Socialism"]'. [Whita- cares at all'. Practically these discrepancies ker II: 399] between desire and satisfaction work them- selves out to the injury of economic welfare, by checking the creation of new capital and 2. Cambridge Tradition on Welfare and encouraging people to use up existing capital Future Generations to such a degree that larger future advan- 2. 1 `Defective Telescopic Faculty' tages are sacrificed for smaller present one. Recently David Collard, in his stimulating [Pigou 1920: 25-27] article "Pigou and Future Generations: A The same slackness of desire towards the Cambridge Tradition", argued for a strong future distant satisfactions was also respon- Cambridge tradition (Sidgwick-Marshall- sible for `a tendency to wasteful exploitation Pigou-Ramsey) against discounting future of Nature's gift'. Using enormous quantities and the injury of economic welfare. of coal in high-speed vessels, `we cut an hour Pigou stressed `defective telescopic faculty' off the time of our passage to New York at and held that the present generation would the cost of preventing, perhaps, one of our devote too few resources to investment in descendants from making the passage at all'. and undertakings, the return [ibid: 28] In the general issue of depletable from which would be distant. He linked his resources and natural resource conservation argument with the controversies about eco- Pigou was anticipated by Jevons who grap- nomic environment and natural resource con- pled with similar issues in 7ZVze Coal Ques- servation. This Cambridge tradition held that tion : An inquiay Conceming the Pragress of issues of generational justice left an impor- the Alketion and the Probable Exhaustion of tant role for the state and could not be our Coal Mines (1865)i). resolved simply at the level of the individual Pigou linked his argument to the Conserva- or the family. Pigou's VVizalth and Wb4i2zre tionist Movement which was at its peak at (1912), and later Economics of I)VizijZire about the time that he was writing Vltlealth (1920) was `the apogee' of this Cambridge and VTle4XZzre. His contemporary L. C. Gray tradition and the most explicit and extensive put the link:`This issue is the problem of treatment of this issue. [Collard 1996: 585, adjusting the conflict between the interest of Alfred Marshall on Human Capital and Future Generations 307 present and future'. [Collard 1996:] The would benefit both future generations and the adjustment, for Pigou, was a matter for the present poor without significantly affecting state, rather than the family: Pigou argued current national income. This Cambridge that because of our defective telescopic fac- tradition (Marshall-Pigou-Ramsey) con- ulty and the weak links provided by blood stituted a thread of immanent criticism which and time the state should have a positive led to a very positive role for the state in role: investment decisions, particularly those relat- There is wide agreement that the State ing to humari capital. [Collard 1996:595, should protect the of the future in 596]2) some degree against the effects of our ir- In contrast with Pigou's and Sidgwick's rational discounting and of our preference stress on the role of the state, for Marshall for ourselves over our descendents.... It is the family and the individual were rather the clear duty of Government, which is the more central and strategic to economic prog- trustee for unborn generations as well as ress and growth. The `family affection' was l for its present citizens, to watch over, and, not merely an engine of , capital accu- 1 : if need be, by legislative enactment, to mulation, and , it was, for defend, the exhaustible resources of the Marshall, a vehicle for human improvement country from rash and reckless spoliation'. and generational enhancement. Marshall had 1 [Pigou 1920: 28-29] emphasized a more crucial role for strong individuality, the family, and the intermedi- In his invocation of the state as the vehicle ate organizations and institutions rather than for taking a longer view than individuals and the state. He put his trust in education, 1 families, it is clear that Pigou was following morality, altruism, together with the growth Mill and Sidgwick. Sidgwick argued, in "The of knowledge and intellectual power. The 1 Art of Political Economy" of Tlhe Pn'nciples best that people could do was to leave the of Pblitical Economp : `if .it is economically `strongest and most vigorous progeny' with a advantageous to a nation to keep up forests, good physical, mental, and moral education.

1 on account of their beneficial effects in Throughout, Marshall emphasizes the evolu- : moderating and equalizing rainfall, the tion of `prudential behaviour', `the habit of 1 advantage is one which private enterprise has vividly realizing the future and providing for no tendency to provide; since no one could iV. [ibid: 591] appropriate and sell improvements in cli- Marshall wrote in the chapter on "Indus- mate'. [Sidgwick 1883 : 406-7] trial Training": Most parents are willing enough to do for 2. 2 Pigou and Marshall their children what their own parents did Collard's arguments are particularly inter- for them; and perhaps even to go beyond it esting because of his emphasis on `the if they find themselves among neighbours Marshall-Pigou fascination with human capi- who happen to have a rather higher stan- tal'. Pigou held that present actions could dard. But to do more than this requires, in affect the utilities of future generations addition to the moral qualities of unselfish- through their economic environments. How- ness and a warmth of affection that are ever, because of discounting and rnortality perhaps not rare, a certain habit of mind the present generation was likely to invest which is as yet not very common. ft too little for the future generations. Hence, requires the habit of dstinctly realizing the Pigou suggested revenue-neutral bounties on fature, of regarding a distant event as of saving, but, according to Collard, education nearly the same importance as ije it were of the poor was a dominant strategy as it close at hand (discounting the fotture at a M ee low rate308 of interest). ff [Marshall es1961A: 3. Marshall on Economic Progress and 217, italics added.] `Telescopic' Faculty

Once Terence Hutchison argued that `the As has often been quoted, Marshall could long re- or e-volution in the economic role of truly say before the Royal Commission on the government' in Britain continued since the Aged Poor in 1893 : `I have devoted myself high tide･of the `classical', individualist, com- for the last twenty-five years to the problem petitive economy began to recede, of poverty, and that very little of my work around the time of the Jevonian revolution. has been devoted to any inquiry which does [Hutchison 1978 : 94] However, as Jose Har- not bear on thaV. [Marshall 1893: 205] ris recently argued, focusing on the changing Edgeworth noticed that `Marshall's success perceptions of public-private relationships in handling the theory of wages was largely and the changing attitude to the state, the due to his sympathy with the -earners'. increasing role of government seems not to His study of industrial life was not like `the have been a long continuing process. exercises of a chess-player without a sigh for Although legislation after the Second World the knights or pawns which may be sa- War created `one of the most uniform, crificed'. He enjoyed an advantage of centralized, bureaucratic and "public" wel- acquaintance and friendship with Ieading fare systems', a social analyst of a hundred men of Labour like Tom Mann, Benn Tillett. years ago would have predicted `the exact Edgeworth could well believe that `work- opposite' that the provision of social welfare people studying the Pn'nciples of Etronomios was and would continue to be `highly local- recognized in the author a sympathetic ized, amateur, voluntaristic and intimate in friend. The only other economist about whom scale', that was similar to that of the mid- they had the same feeling was Mill'. [Edg- Victorian years. Jose Harris stressed the role eworth 1924: 70-71] of idealism in providing a popular idiom and legitimizing framework for the growth of the 3.1 Lifting of Malthusian Difficulty and welfare state, `with its emphasis on corporate `Moralizing ' identity, individual altruism, ethical impera- While it was Jevons who introduced the tives and active citizen-participation'. [Har- marginal theory and implemented the ris: 116, 121, 137, 139] marginal revolution, it was Marshall more The Oxford idealism of T. H. Green and than any other contemporary economist who Arnold Toynbee and its relation to Marshall symbolized the freeing of liberal economics has been sometimes pointed out. `What was from its Ricardian moorings, diminishing common to both Marshall and Green was the returns, wages fund and `the great Malth- stress upon a moralized capitalism through usian difficulties', as J. E. Cairnes called it. It which the highest potentialities of mankind was the lifting of these classical theory and were to be developed'. `Both Marshall and vision that made for a new epoch in feasible Green saw history not only as a transition welfare policies. from status to contract, but also as a transi- In Some Leading Pha'nciples of Pblitical tion from self-interest to self-sacrifice and Econonay IVizwly EbePounded (1874), which altruism'. [Jones 1971:7] In this aspect was to be the epitaph of , Marshall separated himself from those con- Cairnes diagnosed the working class situation temporaries, chiefly Jevons, Sidgwick and as bleak as anything to be found in Malthus. Edgeworth, who preserved a closer telation- It makes a most striking contrast with the ship between economics and Utilitarianism. view expressed by the moralizing young [Collini 1983 : 318] Marshall at the Cambridge Reform Club in Alfred Marshall on Human Capital and Future Generations 309 1873. Marshall inquired in 7]Vze Ftzture of the While the older economists were pessimis- VVlorking Cltisses : The question was `whether tic about a change in working men's moral progress may not go on steadily if slowly, till character, Marshall personified `a moralizing the official distinction between working man capitalism': `AII ranks of society are rising ; and gentlemen has passed away ; till by occu- on the whole they are better and more culti- pation at least, every man is a gentleman'. He vated than their forefathers were; they are thought that the artisans `are steadily becom- no less eager to do, and they are much more ing gentlemen. ..They are steadily accepting powerful greatly to bear, and greatly to fore- the private and public duties of a citizen'. bear'. [Marshall 1873 : 115] Marshall offered [Marshall 1873: 102, 105] an elaborate built upon In the Economics of industry (1879) Mar- incessant evolutionism, partly derived from shall wrote a chapter on "Growth of Popula- Darwinian biology. His evolutionary eco- tion. Malthus. Poor-Laws", and argued that nomics or organic growth theory was a new `before long they will not marry without that development in economic thought, and was to sense of responsibility with regard to the play a major role in the way Marshall looked education of their children which the middle at social problems. As the economic system classes feel now'. This change was caused by continued to progress, economic progress the rise of `their Standard of Comfort', i. e., rather than political action, would provide `such habits of forethought as to be unwilling the real source of the solution to the problems to marry without the expectation of being of society. [Raffaelli, et. al. 1995 : 27-28] able to enjoy a certain given amount of the necessaries, comforts, and luxuries of life'. 3.2 EconomicProgress,FamilyAffection, These necessaries, comforts, and luxuries Education of the Poor are for a man's children as well as for Ricardo and his followers often spoke as himself ; indeed the chief of them is a good though they regarded man's character and physical, mental, and moral education for efficiency as a fixed quantity, wrote Marshall his children. Economic progress depends in "The Growth of Economic Science", and much on changes in the Standard of Com- they never gave themselves enough trouble to fort of the people, and therefore on the study his variations. Their `most vital fault strength of their family affections.... was that they did not see how liable to change Just as a man who has borroeved monay is are the habits and institutions of industry'. In bound to Pay･ it back zvith interesL so a man particular they did not see that the poverty of is bound to give his children an education the poor was the chief cause of that weakness better and more thorozrgh than he has him- and inefficiency: the older economists `had seij received. [Marshall 1879: 28, 32, italics not the faith that modern economists have in added.] the Possibilily of a vast improvement in the conditions of the working classes'. [Marshall The general adoption of this principle would 1961A : 763, italics added.] cause the spectre of Malthusianism to dis- Marshall could say that `the Law of Dimini- appear or to be no longer dreaded; and would shing Return is almost inoperative in Britain'. rid of people of the for food Wages were but very little affected by the which dogged the heels of progress. Thus growth of population and the pressure on the Marshall's laid foun- means of subsistence. [Marshall 1907: 326] dation for a theory of economic progress In the concluding chapter (Ch. XII "General based on the rise and irnprovement of popula- Influences of Progress on ") of Book VI tion quality and efficiency, and presented an ("The Distribution of the National Income") alternative to Malthusian spectre. in the Pim'nciples, he emphasized again that 310 fi es M ee progress was fast improving the condition of (Ch. IV). It naturally related to "The Health the great body of the working classes. The and Strength of the Population" (Ch. V), diffusion of education, and prudent habits which affected the quality and efficiency of among the masses of the people, and the the labour force. In this connection he opportunities which the new methods of busi- devoted considerable attention to family ness offered for the investment of small capi- affection, human capital and investment in tals, were telling on the side of moderate education. He was particularly concerned incomes. Middle class incomes were increas- about "Industrial Training" (Ch. VI), which ing faster than those of the rich; the earning was required to develop the industrial effi- of artisans than those of the professional ciency of the people. classes, and the wages of vigorous unskilled Then Marshall had a chapter on "The labourers than those of the average artisan. Growth of Wealth" (Ch. VII), and he argued Marshall continued to discuss the `general that the accumulation of wealth was gover- influences of economic progress'. Since Politi- ned by a great variety of causes : by custom, cal Arithmetic began in the 17th century, `a by habits of self-control and realizing the constant and nearly steady increase' in the future, and above all by the power of family amount of accumulated wealth per head of affection. Security was a necessary condition the population has ocurred. for it, and the progress of knowledge and This growth of wealth is promoted by intelligence furthered it in many ways. man's increased willingness to sacrifice the Though in an early state of civilization `the present for the future. Man has gradually future is eclipsed by the present' [Marshall become more willing to sacrifice ease or 1879 : 37], the habit of distinctly realizing the other enjoyment in order to obtain them in future and providing for it developed itself in the future. He has acquired a greater `tele- the course of history. Marshall was very scopic' ]2zculty; that is, he has acquired an clear about the motives of saving and the increased Power of realizing the fature and causes of economic growth: `What has hada bn'nging it clearly bojbre his mind's aye: far greater effect on the growth of wealth, it he is more Pruden4 and has more self has rendered it far easier for a man to pro- contro4 and thewfore more inclined to vide a secure income for his wife and children estimate at a high rate fatture ills and after his death: for, after all, family tdifection benofts... He is more unselfish, and there- is the main motive of saving'. Were it not for fore more inclined to work and save in family affections, many who work hard and order to secure a future provision for his save carefully would not exert themselves to family. [Marshall 1961A : 680, 687, italics do more than secure a comfortable annuity added.] for their own lives. They seldom spend more than the income from their , prefer- Marshall's treatment of economics had ring to leave their stored-up wealth intact for been permeated by a concern over economic their families. [Marshall 1961A:'227-28, progress since his earlier days. Economic italics added.] phenomena were observed in the course of For Marshall a man could have no stronger progress and evolution. He paid attention to stimulus to energy and enterprise than the factor supply. In the Pn'ncipies, Book IV hope of rising in life, and `leaving his family "The Agents of Production. Land, Labour, to start from a higher round of the social Capital and Organization", Marshall devoted ladder' than that on which he began. The three chapters to the supply of labour: he middle and especially the professional classes discussed "The Growth of Population" and always denied themselves much in order to coupled consideration of its size and increase invest capital in the education of their chil- Alfred Marshall on Human Capital and Future Generations 311 dren; while a great part of the wages of the investment in horses or machinery'. [ibid : working classes was invested in the physical 236] health and strength of their children. As suggested above, Marshall was very The older economists took too little strong on the investment on education of the account of the fact that the human fac- poor. He spoke of education as a `national ulties are as important a means of produc- investment' in the chapter on "Industrial tion as any other kind of capital ; and we Training". The expending of public and pri- may conclude, in opposition to them, that vate funds on education would be profitable amp change in the distribution of wealth as a mere investment, `to give the masses of which gives more to the wage receivers and the people much greater opportunities than less to the cmpilalists is lthely, other things they can avail themselves of'. By this means being equal, to hasten the increase of `man>L who wozald have died unknown, are material Production.... if...it provided bet- enabled to get the start needed for bringing ter oPPortunities for the great mass of the out their latent abilitiesl The economic value PeQPIe, increased their dicienay, and devel- of one great industrial genius was sufficient QPed in them such habits of selfrespect as to cover the expenses of the education of a to result in the gTowth of a mzach more whole town; for one new idea, such as Bes- op7cient mce of Producers in the next gen- semer's invention, added as much to England's eration. For then it might do more in the productive power as the labour of a hundred long-run to promote the growth of even thousand men. `All that is spent during many material wealth than great additions to our years in opening the means of higher educa- stock of factories and steam-engines. tion to the masses would be well paid for if it [ibid : 228, 229-30, italics addedJ called out one more Newton or Darwin, Shakespeare or Beethoven'. [ibid:216, Then Marshall referred to the interest on italics added.] capital as the reward for the sacrifice It was cautiously noted that much of the involved in the waiting for the enjoyment of best natural ability in the nation was born material resources or the reward for sacrific- among the working classes, and too often ran ing present pleasure for the sake of future. to waste. `There is no extravagance more He called the interest the reward of waiting, prejudicial to the growth of national wealth not of abstinence. And he says that `the than that wasteful negligence which allows accumulation of wealth is generallY the result genius that happens to be born of lowly of a postponement of enjoyment, or of a parentage to expend itself in lowly work'. No waiting for it'. Or, in other words, `it is depen- change would be more conducive to a rapid dent on man's Prospectiveness;that is, his increase of material wealth as an improve- faculty of realizing the future'. [ibid: 233] ment in the schools, provided it be combined He continued: A rise in the rate of interest with an extensive system of scholarships. His increases the desire to save' and it often observation was that `progress is most rapid ' increases the power to save, or rather it is in those parts of the country in which the often an indication of an increased efficiency greatest proportion of the Ieaders of industry of productive resources: but the older econo- are the sons of working men'. [ibid: 211- mists went too far in suggesting that a rise of 12]3) interest (or of profits) at the expense of wages always increased the power of saving: 4. Quality and Strength of the People and `they forgot that from the national point of Environments view the investment of wealth in the child of the working man is as productive as its 4. 1 `Environments, as well as people, have 312 ff es blF ee children' produced or once accepted by a particular In his famous "Review" of Pigou's I>l'lealth generation, whether or not they can be and LVb412zre, Allyn Young wrote. There was materialized into mechanical inventions, `an admirable chapter' on "The National may not only remodel from its very base Dividend and the Quality of the People'.', the environment which succeeding genera- dealing with the claim of some apostles of tions eojoy, but may also pave the way for Eugenics that economic inquiries, concerned further advance. For, whereas each new with environment rather than heredity, were man must begin where his last ancestor relatively unimportant. `I knbw of nothing on began, each new invention begins where its this topic more incisive than this chapter, Iast ancestor left off'. [ibid: 113-14] with its summary statement: "Environ- ments, as well as people, have children"'. These successions of ideas and knowledge [Young 1913: 674] between the generations and their cumulative Around those years a great advance occur- nature had been well developed and stressed red in biological knowledge. Biometricians by Marshall, who argued:`Ideas, whether and Mendelians alike were insisting upon the those of art and science, or those embodied in fundamental importance of a proper under- Practical appliances, are the most `real' of standing of the laws of heredity. Pigou critic- the gifts that each generation receives from ized Professor Punnett and his fellow- its predecessors. The world's material wealth workers, as well as Karl Pearson, who ar- would quickly be replaced if it were des- gued that environment was of no importance, troyed, but the ideas by which it was made because improvements in it could not react were retained'. [Marshall 1961A: 780] Fur- on the quality of the children born to those ther he argued about the cumulative effects who would enioy the improvements. They of better earnings and better opportunities of held that environing circumstances could developing people's qualities of one genera- affect the persons immediately subjected to tion after another. They, being themselves them, but that these circumstances were rendered stronger and more intelligent, would unimportant, because, not being able to influ- be able to offer a better environment to their ence the inborn quality of succeeding genera- children, and so on. The effect went on piling tions, they could not produce any lasting itself up. The qualities of future people would result. This view was crYstallized by Punnett, depend not only on their genetic make-up but who declared that hygiene, education and so on the economic environment bequeathed to on were but `fleeting palliatives at best, them. which, in postponing, but augment the diffi- culties they profess to solve... Permanent 4.2 Fresh Air and Sanitation:the progress is a question of breeding rather than Strength of the People of pedagogics ; a matter of gametes, not of Marshall devoted Ch. V "The Health and training'. [Pigou 1920 : 106, 110] Strength of the Population" of Bk. IV in the Pigou replied : Pri'nciples to the conditions on which depend The environment of one generation can health and strength, physical, mental and produce a lasting result, because it can moral. They were `the basis of industrial affect the environment of future genera- efficiency', on which the production of mate- tions. Environments, in short, as well as rial wealth depends. This strength of man people, have children. Though education himself, this resolution, energy and self- and so forth cannot influence new births in masterly, in short, this `vigour' was the the physical world, they can influence them source of all progress. It was advisable that in the world of ideas;and ideas, once people should not have children till they could Alfred Marshall on Human Capital and Future Generations 313 give as good an'education as they had. This of the debates on Lloyd George's 1909 principle of action, `combined with an ade- Budget, which seemed to him `a Social Wel- quate provision of fresh air and healthy play fare Budget']: for our town populations', could hardly fail to 71he most impohant cmpital of a nation is cause the strength and vigour of the popula- that which is invested in the Pdysica4 tion to improve. If the strength and vigour menta4 and moral nurture of its People. improves, the increase of numbers would not That is being recklessly wasted by the come to cause a diminution of the average exclusion of, say, some ten millions of the real income of the people. [Marshall 1961A : population from reasonable access to green 194, 202-3] spaces, where the young may play and the Marshall always held that `poverty and old may rest. Tb remedy thts evil is ...even pain, disease and death are evils of much less more urgent than the Provision of old-age importance than they appear, except in so far Pensions;and I wished the first charge as they lead to weakness of life and charac- upon the rapidly-growing value of urban ter', and that `true philanthropy aims at land to be a tFresh Air' rate (or general increasing strength more than at diminishing tax), to be spent on breaking out small poverty', as he wrote to Helen Bosanquet (28 green spots in the midst of dense industrial September 1902), giving thanks for her book districts, and on the preservation of large TVze Strength of the People. A Study in Sbcial green areas between different towns and Economics (1902). Helen Bosanquet wrote between different suburbs which are tend- back (30 September 1902) that the one funda- ing to coalesce. I thought that the gross mental cure for poverty was `to make the amount of the Fresh Air rate or tax should poorer wage-earners more efficient in the be about ten millions a year, till we have widest sense of the term more efficient as cleared off the worst evils caused by many producers, as Consumers, and in all the rela- generations of cruel apathy and neglect. tions of life'. They could not then fail to [Whitaker III : 235-36, italics added.] obtain greatly increased economic prosperity. But, she continued, if on the contrary it was Marshall had been deeply involved in the the wealth of the rich which caused the pov- problems Qf "Over-crowding of Towns" or erty of the poor, then her contention fell to urban deprivation since the 1880s. Here also the ground, and poverty could only be Marshall's perceptions of public-private rela- remedied by the redistribution of existing tionships in their respective roles of providing

/ wealth. [Whitaker II : 399, 400]`' housing conditions are most interesting. In 1 For Marshall there was no better use. for his view, `Government might buy the land and public and private than in providing let it out to the working-classes for next to public parks and playgrounds in large cities. nothing. This could only bribe people to say He contended that it would be possible to where their work is not wanted ; after a very provide opportunities for healthy play for all short time they would be no better off than children, and to bring fresh air and light rnore before'. The only people who would gain 1 generously into all urban homes, `to lessen would be the London landlords. But, `if the the real evils of the poorer classes, without Government can afford to buy land for the touching on that expenditure of the rich for working-classes, let it make more play- their trae well-being'. (Letter to Mrs Bosan- grounds and breathing spaces. Every pound quet, 28 October I903) [Whitaker III : 67] so spent now will yield an income of national Marshall's full intentions on these issues health and happiness for ever'. [Marshall are illuminating in his letter to the Editor of 1885: 66] 711ze 71mes (13 November 1909) [in the midst Municipal housing seemed to him `scarcely

/ : 314 wt za MM ever right and generally very wrong'. Munici- indzest7pu. [O'Brien 1994 : xxiv] In its "Intro- pal free baths seemed nearly always right. ductory", Marshall divided Wealth into Mate- `Outside of a man's house is not his affair : it rial wealth and Personal or non-material is the affair of the State or Municipality. The wealth, and defined the latter ; `Personal' or darkness and the polluted air of his surround- `non-material wealth' consists of `those ings narrow the life and undermine the human energies faculties and habits, physical 1 springs of strength and independence of char- mental and moral, which directly contribute acter for him and his wife and above all his to making men industrially efficient, and children.... I should ldee an expenditure com- which therefore increase their power of parable with that required for the South producing material wealth. Thus manual African' war to be devoted to the removal of skill, intelligence, and honesty may be includ- this source of degradation for a good many ed in the personal wealth of a country'. years to come'. (Letter to Mrs Bosanquet, 2 [Marshall 1879 : 6] October 1902) [Whitaker II : 402]5' This was followed and developed in the Prt'nciples;pursuing the lines indicated by , Marshall defined personal 5. Marshall on Human Capital and `Earn- wealth to consist `firstly of those energies, ings of Labour' faculties and habits which directly contribute Marshall's crucial point of discussion on to making people industrially efficient, and labour income, in particular, his emphasis on secondly of their connections and the cumulative effects of time on wages, was associations of every kind.... If they are to be highly and properly appreciated by Edgewor- reckoned as wealth at all, they are also to be th in his "Reminiscences". Edgeworth pointed reckoned as capital. Thus Personal wealth out a topic about which he had pressed and Personal capital are convertible'. [Mar- Marshall to express himself more fully, that shall 1961B: 204] In the course of economic is, the `discounting future pleasures'. Time, progress, Marshall further argued that the argued Marshall, works both for and against growth of general enlightenment `turned a the workers in their dealing with the great deal of the increasing wealth of the capitalist-employing class. On the one hand, nation from investment as material capital to he stressed the interaction between poverty investment as personal capital'. [Marshall and low wages, the one affecting the supply 1961A : 565] of labour and perpetuating the other. On the The main substance of Marshall's analysis other hand, `better wages tend to an improve- of human capital is contained in his theory of ment in the morale and physique, and there- distribution, in relation to some peculiarities with the efficiency, at least of the coming, if in the action of demand and supply of labour. not the present, generation'. `These cumula- He had accepted the basic Smithian notion tive effects of time', Edgeworth went on, that an educated man might be compared to `together with other incidents peculiar to the an expensive machine, and quoted from the labour-market, when first exhibited by Mar- chapter on wages in the l}Ilealth of IVtztions : shall, seemed almost a revelation. Econo- `A man educated at the expense of much mists can hardly appreciate the originality of labour and time to any of those Marshall's chapters on the Earnings of which require extraordinary dexterity and Labour'. [Edgeworth 1924 : 69-70] skill, may be compared to one of those expen- sive machines. The work which he learns to 5.1 `Personal Wealth', `Personal Capital' perform... will replace to him the whole Human capital was `one of the persistent expense of his education, with at least the (and neglected) themes' of 7';l2e Economios of ordinary profits of an equally valuable capi- Alfred Marshall on Human Capital and Future Generations 315 tal'. However, this must be modified, Mar- very similar in general character, and that shall contended, because in educating their the causes which govern the normal levels of children, parents are governed by different wages and profits resembled one another. motives from a capitalist undertaker to erect However it must be remembered that these a new machine ; and the period over which were generally with the reservations of the earning power extends is generally irnportant differences between them, with greater in the case of a man than of a emphasis on peculiarities of labour market. machine. Therefore, `the circumstances by Indeed, as is well-known, Marshall deleted which the earnings are determined are less the paragraph defining `personal capital' in capable of being foreseen, and the adjustment the fifth and subsequent editions of the Prin- of supply to demand is both slower and more ciples. Also the similarity and the common imperfect'. [ibid : 570-71] nature between material and personal capital Marshall conceded:`There is a general were to become weakened as the Pn'nciples correspondence between the causes that gov- was revised and revised, and the links ern the supply of material and personal between investment in personal capital and capital : the motives which induce a man to the quasi-rent were cut off and the concept of accumulate personal capital in his son's edu- quasi-rent of human capital was deleted in cation are similar to those which control his and after the fifth edition. On the contrary, ' accumulation of material capital for his son'. the Iinks between the better earnings of Yet it was true that `the only persons, who labour and the rise of the `standard of life' are likely to invest much in developing the was increasingly to be emphasized. Marshall personal capital of a youth's abilities are his presumably intended to separate the human parents'. [ibid : 660-61] capital investment from the quasi-rent theory In fact, Marshall further referred to the and to make it related with the `standard of common nature of personal and material life'.6} capital investment : The motives which induce a man and his 5.2 Economy of High Wages father to invest capital and labour in pre- In the fifth edition of the Principles, Mar-

1 paring him for his work as an artisan, as a shall changed the title of Bk.VI from "Value, 1 professional man, or as a business man, are or Distribution and Exchange" to "The Dis- 1 similar to those which lead to the invest- tribution of National Income" and added the ment of capital and labour in building up new chapter called "Progress in Relation to material plant and the organization of a Standard of Life" (Ch. XIII). Then he was business. In each case the investment (so increasingly stressing the links between far as man's action is governed by deliber- human capital investment, the `standard of ate motive at all) is carried up to that life', the development of activities and fac- margin at which any further investment ulties, the quality, efficiency and appears to offer no balance of gain, no of labour, and the growth of the `Earning-and- excess or surplus of utility over `dis-utility'; interest-Fund' or national income. The term and the , that is expected as a reward the `standard of life' meant `the standard of for all this investment, is therefore a part activities adjusted to wants'. Thus `a rise in of the normal expenses of production of the the standard of life implies an increase of services rendered by it. [ibid: 619] intelligence and energy and self-respect; lead- ing to more care and judgment in expendi- Thus Marshall sometimes argued that the ture, and to an avoidance of food and drink causes that determine the normal supply that gratify the appetite but afford no prices of material and personal capital were strength, and of ways of living that are un- 316 ff es a" K wholesome physically and morally'. strength, physical, mental and even moral of Marshall's evolutionary economics and his the coming generation'; and that `an increase ideas on organic growth and economic prog- in the earnings that are to be got by labour ress became increasingly clearer and more increases its rate of growth; or, in others distinguishing. Economic progress brings words, a rise in its demand-price increases about an increase in the `standard of life' a the supply of it'. [Marshall 1961A : 532] ' rise in physical strength, mental ability, and Marshall started preliminary survey of moral character. This makes people more distribution by noting French and English willing to sacrifice the present for the future, economists in the 18`h century. The Physio- which increases educational investment thus crats assumed that there was a natural law of , raises the efficiency ･and productivity of the population according to which the wages of working classes, developing their potential labour were kept at starvation limit. This abilities and faculties. rigid assumption was partially relaxed by Marshall starts Bk.VI, saying that `the Adam Smith, who insisted that where wages keynote of this Book is in the fact that free were high, the workman were more active, human beings are not brought up to their diligent and expeditious, than where there work on the same principles as a machine, a were low. Ricardo appeared to hold the so- horse, or a slave'. Then he posed questions : called `iron law of wages', especially so called What are the general causes which govern by the German socialists;but in fact he the distribution of the surplus among the regarded wages as largely governed by a people ? What part is played by conventional mutable standard of life. [ibid : 508-9] necessaries, i. e., the `standard of comfort' ? It was nearly in the same generation as What by wants and activities, i. e. by the Marshall that a careful study was begun to be `standard of life'? What share of the general rnade of `the effects that high wages have in flow is turned to remunerate those who work increasing the efficiency not only of those and `wait' as contrasted with those who who receive them, but also of their children ' work and consume at once the fruits of their and grandchildren'. F. A. Walker and other endeavour? [1961A: 504] In the Preface to American economists led this study ; and the the second edition he wrote:the cost of comparative study of the industrial problems production of labour cannot be determined as of different countries forced more and more definitely as can that of a commodity; for attention to the fact that `highly paid labour the `conventional necessaries' of labour are is generally efficient and therefore not dear not a fixed sum, but depend on the efficiency labour'. [ibid : 510] of labour. Therefore, `the right means to raise While having rejected the doctrine of the wages is to raise, not merely the Standard of wages-fund, in Economios of indusdy, Mar- Comfort or wants, but the Standard of Life shall developed the concept of `the Wages- which includes activities as well as wants'. and-profits Fund' and `the Etirning-and- [Marshall 1961B : 40] interest Fbend', regarding the income of In preliminary survey of distribution (Ch. the country, after deducting rent and taxes, 1 II of Bk. VI), studying the influence of as divided not into wages and profits, but into demand for labour on distribution or the interest and earnings. And he noted: a rise in reflex influence of remuneration of labour on the Time-wages of any trade tends to dimin- its supply, and the dependence in the long run ish profits. But an increase in Time-wages, if of the supply of efficient labour on the rate of it leads to such an increase of efficiency that earnings and on the manner in which they are Task-wages are no higher than before, will spent ; Marshall concluded that `an increase not lower profits, but raise them. In other of wages, ...almost always increases the words a rise in wages almost always leads to Alfred Marshall on Human Capital and Future Generations 317 an increase of Personal capital;and the have done;and any retardation which it increase of the Wages-and-profits Fund suffers itself is accumulated and added to depends on the Personal as much as on the that of its predecessor, and so on from gener- Material capital of the country. A rise of ation to generation'. wages may then be devoted to adding to the And so it was with regard to the action of Material and Personal capital of the working demand and supply on the earning of labour. classes, and increasing their efficiency : and If at any time it pressed hard on any individ- if so spent, it will not lead to any diminution uals or class, the direct effects were obvious. of the Wages-and-profits Fund. [Marshall But the sufferings were much more signifi- 1879: 95-96, 202] cant with those that have `the indirect effect In fact, he continued, when a labourer has of lowering the character of the workers or to be supplied with costly machinery, a rise in of hindering it from becoming stronger. For Time-wages is a great benefit to capital, if it these last cause further weakness and further lead to such an increase in efficiency as to suffering, which again in their turn cause yet keep Task-wages unchanged. Even in the further weakness and further suffering, and case of unskilled labour it is to the advantage so on cumulatively'. On the other hand, `high of capital that Time wages should rise, pro- earnings, and a strong character, lead to vided Task wages do not rise too. If two greater strength and higher earnings, which labourers at 18s. a week will do as much again lead to still greater strength and still work as three at 12s., the former are in the higher earnings, and so on cumulatively'. long run cheaper. For they are likely to [Marshall 1961A : 559-60] remain longer in full health and strength and Human agents of production were not to have healthier and stronger children than bought and sold as machinery. The worker the others ' and much heavier burden will be sells his work, but retains property in him- , imposed on capital through the poor rates by self : those who bore the expenses of rearing three low-waged than by two high-waged and educating him would receive only very labourers. [ibid : 132]') Iittle for his services in later years. Conse- quently, the investment of capital in the rear- 5. 3 Cumulative Effects of Time on Wages ing and early training of the workers was In Bk. VI of the lk'nciples, especially Chs. limited `by the resources of parents in the IV-V "Earnings of Labour, Continued", Mar- various grades of society, by their power of shall discussed `many peculiarities' in the forecasting the future, and by their willing- action of demand and supply of labour, which ness to sacrifice themselves for the sake of were cumulative and he held those cumula- their children'. [ibid : 561]

/ tive effects on wages were far more impor- This evil was of relatively small impor- tant in the long run. He was highly concerned tance for the higher industrial orders. For in with the poverty and genuinely anxious to those orders most people `distinctly realize find its remedies. He was very scared about the future', and `discount it at a Iow rate of the vicious circle of poverty leading to poor interest'. They exert themselves much to health and education, leading in turn low select the best careers for their sons, and the productivity and perpetuating low wages. best trainings for those careers; and they are [O'Brien 1981: 54] generally willing and able to incur a consider- The problem had much in common with able expense for the purpose. The profes- that of tracing the economic influence of sional classes especially, while generally custom. `If custom checks the progress of one `eager to save capital for their children', are generation, then the next generation starts even more `on the alert for opportunities of from a lower level than it otherwise would investing it in them'. However, in the lower 318 ff za M ee ranks of society the evil was really great, This is the keynote which Marshall with its degrading and self-perpetuating repeated in the Pn'nciples and the recurring effect. notion which he expressed there `the spirit of For the slender means and education of the the age', as I referred to in the introduction to parents, and the comparative weakness of this paper. Marshall's ideas on human capitai their power of distinctly realizing future, were probably the outcome of the poverty prevent them from investing capital in the problems which he observed : what he genu- education and training of their children inely wanted was the development of abil- with the same free and bold enterprise with ities, activities, and faculties of the poor, to which capital is applied to improving the provide the opportunities for their develop- machinery of any well-managed factory. ment by means of economic growth : He was Many of the children of the working- very concerned about the improvement of classes are imperfectly fed and clothed; physical strength, mental ability, and moral they are housed in a way that promotes character, or quality of the people and the neither physical nor moral health; ...At workers, a rise in the standard of life, then a least they go to the grave carrying with growth of national income, and the earnings them undeveloped abilities and faculties ; of the labour. He was a firm believer in the which, if they could have borne full fruit, economy of high wages. His arguments on would have added to the material wealth of the interaction between high wages (having the country...many times as much as would 6fficiency wage effects) and educational have covered the expense of providing investment seems to offer a powerful mecha- adequate opportunities for their develop- nism of cumulative and endogenous growth. ment. [ibid : 562] Further Marshall put a particular emphasis on the role of family and motherhood. He Marshall's point on which he had specially held the opinion that `the character of a to insist was that this evil cumulative. The nation depends chiefly on that of the mothers worse fed were children of one generation, of the nation on their firmness and gentle- the Iess would they earn when they grew up, ness and sincerity'. It was in childhood, and at and the less would be their power of provid- home, that `the workman must learn to be ing adequately for the material wants of their truthful and trusty, cleanly and careful, ener- children ; and so on to the following genera- getic and thorough, to reverence others and tions. And again, the less fully their own to respect himself'. [Marshall 1879 : 12]8) faculties were developed, the less would they Marshall thought that able workers and realize the importance of developing the best good citizens were not likely to come from faculties of their children, and the less would homes, from which the mother was absent be their power of doing so. And conversely during a great part of the day. [Marshall `any change that awards to the workers of 1961A:721] The son of the artisan had a one generation better earnings, together with better start in life than the son of the un- better opportunities of developing their best skilled labourer; he was brought up in a more qualities, will increase the material and refined home and with more of a mother's moral advantages which they have the power care. His parents were likely to be better to offer to their children : while by increasing educated, and to have a higher notion of their their own intelligence, wisdom and fore- duties to their children;and, last but not thought, such a change will also to some least, `his mother is likely to be able to give extent increase their willingness to sacrifice more of her time to the care of her family'. their own pleasures for the well-being of their Marshall highly regarded the last point, not- children'. [ibid : 562-63] ing that `the degradation of the working- Alfred Marshall on Hurnan Capital and Future Generations 319 classes varies almost uniformly with the potential capabilities. Marshall's evolution- amount of rough work done by women'. And ary explanation for modern man's escape he stressed : `T7ze most valuable of all cmpital from Malthusianism was paradigmatic of the is that invested in human beings ,' and of new liberal characterization of the working that cmpital the mostPreciozts Part is the result classes. They would grow more mobile, more of the care and iwf7uence of the mother, so rational, more able to acquire and conserve long as she retains her tender and unselfish property;in effect, it would increasingly instincts, and has not been hardened by the become like a middle class in working class strain and stress of unfeminine work'. [ibid : dress. `The sagacity and public spirit of the 564, italics added.] leading minds both among employers and In addition, he held that `in estimating the employed are increasing fast;the recent cost of production of efficient labour, we improvement among the employed in particu- must often take as our unit the family'. For lar is one of the most marvelous events in the him the cost of production of efficient men history of the world'. [Marshall 1885 : 64] cannot be treated as an isolated problem ; it In the incinstry and Tbrade, particularly in must be taken as part of `the broader prob- the first and final parts, Marshall drew atten- lem of the cost of production of efficient men tion to the fact that sectional interests in together with the women who are fitted to industry were declining and becoming make their homes happy, and to bring up increasingly plastic, and that the chief change their children vigorous in body and mind, was `the assimilation of training, and conse- truthful and cleanly, gentle and brave'. [ibid : quently the capacity, of the working classes 563-64]9} generally to those of the well-to-do'. The spread of education was rapidly effacing the distinctions of mind and character between Epilogue different social strata. Consequently `we are 1 The main drift of Marshall's study of distri- approaching rapidly to conditions which have 1 bution suggested that `the social and eco- no close precedent in the past, conditions 1 nomic forces already at work are changing under which the relations between the vari- the distribution of wealth for the better' and ous industrial strata of a civilized nation are ' that `their influence is for the greater part being based on reason, rather than tradition'. cumulative'. Wages had risen and wages [Marshall 1919 : 4-5] 1 differentials narrowed over time : the lower Thus for Marshall the future might be and middle incomes were increasing faster made brighter than the past by greater com- than those of the rich. Though it was impos- munity of thought, action and sympathy ; by sible to raise all earnings beyond the well-to a fuller recognition of the dignity of man, and -do artisan families, it was `certainly desir- cordial cooperation among all the various able that those who are below that level ranks of industry, and by a continued devel- should be raised, even at the expense of opment of the fundamental principles of the lowering in some degree those who are above Whitley Report. He thought that human it'. [Marshall 1961A:712, 714] As seen nature had developed new possibilities in above, Marshall held that `any change in the almost every generation and it had progres- distribution of wealth which gives more to sed very fast during the previous fifty years. the wage receivers and less to the capitalists [ibid: 650-51] is likely to hasten the increase of material (The Institute of Economic Research, production'. Hitotsubashi Univresity) People should have access to the `neces- saries for efficiency' so as to develop their za 32e - ee 1985. 7) See Hashimoto 1990: ch. 7. Notes 8) Marshall also says: `General ability depends

I am very grateful to David Collard, Neil Rollings, largely on the surroundings of childhood and youth. In this the first and far the most powerful influence and the participants in our Institute's regular semi- is that of the mother'. [1961A : 207] nar (on July 17,2002) for their helpful cemments 9) Marshall noted: Sir William Petty discussed and useful information. The research for this paper was carried out with the support of the JSPS's "The Value of the People" with much ingenuity; Grant-in-Aid for Scientific Research B, and the and the relation in which the cost of rearing an adult male stands to the cost of rearing a family unit was Grant-in-Aid for Scientific Research on Priority examined in a thoroughly scientific manner by Areas B. Cantillon, Essai, Pt I, ch.XI, and again by Adam 1) He asserted that the rapid growth of popula- Smith, Wbalth of Aiiztions, Bk I, Ch.VIII: and in more recent times by Ernst Engel, in his brilliant tion and industry in Britain increased the coal con sumption and steep rise of its cost - so that Britain's Essay Der theis cier Arbeit, and by William Farr and others. [1961A: 564] See Kiker 1967. industrial progress and supremacy was bound to suffer a check within the next half-century or so. [Collison Black 1981 : 12-3]. References 2) It would be interesting to know that while warning the probable exhaustion of coal, Jevons Baba, K. (1967) Translator's "Explanatory Notes," also argued that the wealth generated from coal in Baba's Japanese Translation of Marshall's should be used for investment in human capital. Pn'nciples of Etonomics, Vol.4. Tokyo : Toyo [Lecture On Coal, January 16, 1867, quoted in Col- Keizai Shinposha. lard 1996: 592]. (1961) Ainfed Marshall (in Japanese), 3) Marshall noted that `there are few practical Tokyo : Keiso Shobo. problems in which the economist has a more direct Blandy, R. (1967) "Marshall on Hurnan Capital: a interest than those relating to the principles on Note," The fournal of ]Pblitical Economp, Vol. which the expense of the education of children 75, No. 6, pp. 874-75. should be divided between the State and the par- Cairnes, J. E. (1874) Some Leadi,rg JPrinciples of ents', but he didn't develop the argument. [ibid: thlitical Etonomp IVewly E)spounded. London: 216] Macmillan. 4) Marshall's letter was inserted in Preface to Chasse, J. D. (1984) "Marshall, the Human Agent Second Edition of Bosanquet's book, (London: and Economic Growth: Wants and Activities Macmillan, 1903), pp. vii-viii. Revisited," Histo7y of folitical Eiconomp, Vol. 16 5) Marshall's practical remedies were two. The No. 3, pp. 381-404. first was to enforce sanitary regulations in London, Collard, D. A. (1996) "Pigou and Future Genera- with rapidly increasing stringency. This was ac- tions: A Cambridge Tradition," Ctzmbn'cige companied by second remedy to help those,who `are lburnal of Eiconomics, Vol. 20, pp. 585-97. not wanted' in London to move to `industrial vil- Collini, S., Winch, D. and Burrow, J. (1983) That lages, where they can get house-room cheaply, and Nbble Science of Plolitios. A Stbldy in iVineteenth- fresh air for nothing'. [Marshall 1885 : 67] Marshall century intellectual History. Cambridge: Cam- actually had contacts with the Society for Promot- bridge University Press. ing Industrial Villages, formed in 1884 (principally Collison Black, R. D. (1981) "W. S. Jevons, 1835-82," by Henry Solly). [See his letters to the Society, 2 in O'Brien, D. P, and Presley, J. R. eds. Pioneeis Feb. 1885, 19 March (1885?), Whitaker I : 187, 191] of Mbdern Etonomics in Bn'imn. London: According to Whitaker, The aims of the Society Macmillan. were similar to ideas Marshall had expressed in Edgeworth, F, Y. (1890) "Review": Pn'nciples of `Where to House Thern', Contempo7zz7y Review, 45 Economics by Alfred Marshall, in TVze Acadenry, (Feb. 1884), part of a Symposium on `The Housing No. 956, 30 August 1890. Alpred Marshall. Cn'ti- of the London Poor': reprinted in Pigou (1925). cal Responses, ed. by P, Groenewegen, Vol.2, "Where to House the London Poor" (1884) was London: Routledge, 1998. written before the Garden City movement started (1924) "Reminiscences", in Pigou ed. and probably gave an impetus to that movement. (1925). [Whitaker I: 187] Groenewegen, Peter (1995) A Sban'ng ]Ekzgle : Al- 6) For Marshall on human capital, see Kiker .hed Marshall 1842-1924. Edward Elgar. 1966, 1967; Blandy 1967; Baba 1967; and Nishioka Hashimoto, S. ed. (1990) Etonomies of Marshall (in Alfred Marshall on Human Capital and Future Generations 321

Japanese). Kyoto: Minerva Shobo. Chivalry," in Pigou ed. (1925). Harris, J. (1992) "Political Thought and the Welfare (1961A) Principles of Economics, 9`h (var- State, 1870-1940: An Intellectual Framework iorum) ed., by C. W. Guillebaud, Vol. 1 Text. for British Social Policy," Past and Present, no. London : Macmillan for Royal Economic Soci- 135, pp. 116-41. ety. Hutchison, T. W. (1953) A Review of Etonomic (1961B) Vol. 2 Notes. Doctn'nes 1870-1929. 0xford, Clarendon Press. (1919) industiy and 7Vade. A Study of (1978) On Revolutions and PrQgress zn industrial Tbchnique and Business 07ganiza- Economic Knowle`ige. Cambridge, Cambridge tion; and of 1]lieir Iwfluences on the Condi- University Press. tions of VZzrious Cldsses and IVdtions. Fourth Jones, Gareth Stedrnan (1971) Outcast Lovadon. A edition, London : Macmillan, 1923. Study in the Relationship between Cldesses in Nishioka, M. (1985) "The Evolution of Marshall's Wcton'an Sociely. Oxford, Oxford University Theory of Human Capital," (in Japanese), Press. Keizaigzzku-ronso, Vol. 36 No. 1, pp. 1-54. Kiker, B. F. (1966) "The Historical Roots of the O'Brien, D. P. (1981) "A. Marshall, 1842-1924," in Concept of Human Capital," Tize lburnal of O'Brien and Presley eds., op. cit. Political Economy, Vol, 74, No. 5, pp. 481-99. (1994) "Introductien" to Marshall, A.and (1967) "The Concept of Human Capital in M. P, 7'he Etonomies of indusby. the History of Economic Thought," T;lze indian Pigou, A. C. (1908) Economic Science in Reimion to Economic lbumal, Vol. 14, No. 4, pp, 467L486. Practice. London: Macmillan. (1968) "Marshall on Human Capital : Com- (1912) Wlaalth and Wigij2zre. London: Mac- ment," 7-;lze lburnal of Political Etononay, Vol. millan. 76, No. 6, pp. 1088-90. (l920) Tlze Economics of PT':2412zre. London : Keynes, J. M. (1924) `?1ipfed MarshalL 1842-1924," Macmillan. in Pigou ed. (1925). ed. (1925) Memorials of Aip7ed Marshall. Marshall, Alfred (1873) "7;eze Fhrlare of the Wbrking London : Macmillan. Classes," in Pigou ed. (1925). Raffaelli, T., Biagini, E., Tullberg, R. M. eds, (1995) Marshall, Alfred and Mary Paley (1879) 7';Eie Eco- Alpfed Marshall's Lectures to Wbmen. Some nomics of inciastry, with a new introduction by Etonomic Questions directly connected to the D. O'Brien. Bristol : Thoemmes Press, 1994. Perb4fare of the Labou7aer. Aldershot, Edward Marshall, Alfred (1884) "Where to House the Lon- Elgar. don Poor," in Pigou ed. (1925). Sidgwick, H. (1883) 71he Pn'nciples of llolitical (1885) "How far do Remediable Causes Econonay, Third Edition, London, Macmillan, Influence Prejudicially (a) the Continuity of 1901. , (b) the Rates of Wages?," in Whitaker, John K. (1996) 7;lie Coi"respondence of Industrial Remuneration Conference. A4tired A4fited MarshaIL Eiconomist. Cambridge: Cam- Marshalg. Cn'tical Responses, ed. by P. Groene- bridge University Press. wegen, Vol. 1. London : Routledge, 1998. Vol.I CIimbing, 1868-1890. (1893) "Preliminary Statement and Evi- Vol.II At the Summit, 1891-1902. dence before the Royal Commission on the Aged Vol.III Towards the Close, 1903-1924. Poor," in ( lfficial jFkePers by A4fred Marshall ed. Young, A, (1913) "Review": Wealth and Wbly2ziae, by by J. M, Keynes. London : Macmillan, 1926. A, C. Pigou, in Quarterly foumal of Economios, (1907) "Social Possibilities of Economic Vol, 27, pp. 672-86.

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