Summary
Alfred Marshall, a refined academician and the most famous economist of the Victorian Age, was both accepted and respected for his Principles of Economics (1890), a tremendous success that is still used as a textbook. His thesis was equilibrium — the self-adjusting and self-correcting nature of economics; the foundation of his economics was the concept of time. For Marshall, there is a short period and a long period to consider. Both have to be weighed in answering the question of value. With diamonds, for example, in the short-run, it is demand which makes them expensive; in the long-run, it is the cost of production. To determine price, the economist must consider both supply and demand as equally important as two blades of a pair of scissors.
To Marshall, a remarkably compassionate scientist, economics was an engine for the discovery of truth concerning the cause and cure of poverty. He contrived an elaborate system of economics which delighted established thought and which satisfied business. Introductory economics courses in England and the U.S. incorporate his system. Even more important is the fact that his most brilliant pupil, John Maynard Keynes, made a large splash in the world of economic thought.
Yet, brilliant as Marshall was, nothing that he said went far enough. The time which he wrote about is an abstract. His economics, therefore, is a world of theory, and those theories are hopelessly unrelated to reality.
