Principles of Economics (Marshall)

Principles of Economics

Alfred Marshall, Principles_of_Economics, Great Mind Series, Year 1890.
Author	Alfred Marshall
Language	English
Subject	Economics
Publication date	1890

Principles of Economics is a leading political economy or economics textbook of Alfred Marshall (1842–1924), first published in 1890. It ran into many editions and was the standard text for generations of economics students.

Marshall began writing the Principles of Economics in 1881 and he spent much of the next decade at work on the treatise. His plan for the work gradually extended to a two-volume compilation on the whole of economic thought; the first volume was published in 1890 to worldwide acclaim that established him as one of the leading economists of his time. The second volume, which was to address foreign trade, money, trade fluctuations, taxation, and collectivism, was never published at all. Over the next two decades he worked to complete his second volume of the Principles, but his unyielding attention to detail and ambition for completeness prevented him from mastering the work's breadth.

"The efficiency as compared with the cost of almost every class of labour, is thus continually being weighed in the balance in one or more branches of production against some other classes of labour: and each of these in its turn against others. This competition is primarily "vertical": it is a struggle for the field of employment between groups of labour belonging to different grades, but engaged in the same branch of production, and inclosed, as it were, between the same vertical walls. But meanwhile "horizontal" competition is always at work, and by simpler methods: for, firstly, there is great freedom of movement of adults from one business to another within each trade; and secondly, parents can generally introduce their children into almost any other trade of the same grade with their own in their neighbourhood. By means of this combined vertical and horizontal competition there is an effective and closely adjusted balance of payments to services as between labour in different grades; in spite of the fact that the labour in any one grade is mostly recruited even now from the children of those in the same grade. The working of the principle of substitution is thus chiefly indirect. When two tanks containing fluid are joined by a pipe, the fluid, which is near the pipe in the tank with the higher level, will flow into the other, even though it be rather viscous; and thus the general levels of the tanks will tend to be brought together, though no fluid may flow from the further end of the one to the further end of the other; and if several tanks are connected by pipes, the fluid in all will tend to the same level, though some tanks have no direct connection with others. And similarly the principle of substitution is constantly tending by indirect routes to apportion earnings to efficiency between trades, and even between grades, which are not directly in contact with one another, and which appear at first sight to have no way of competing with one another." - VI.XI.6-7