Grand Pursuit: A Story of Economic Genius. Sylvia Nasar
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his mentor used to gently chide him, “Ah, if you understood political economy you would not say that.” Marshall took the hint. “It was my desire to know what was practical in social reform by State and other agencies that led me to read Adam Smith, Mill, Marx and LaSalle,” he later recalled. He began his education by reading John Stuart Mill’s Principles of Political Economy, then in its sixth edition, and “got much excited about it.”34
His interest was intensified by the unexpected passage of the Reform Act of 1867, which, in a single stroke, turned England into a democracy. The act did more than double the size of the electorate by extending the franchise to some 888,000 adult men, mostly skilled craftsmen and shopkeepers, who paid at least £10 a year in rent or property tax. It brought the working classes into the political system and made democratic government the only acceptable form of government. Though it ignored the 3 million factory operatives, day laborers, and farm workers—and, of course, the entire female sex—twentieth-century historian Gertrude Himmelfarb emphasizes that the Reform Act nonetheless lent the notion of universal suffrage an aura of inevitability.35 Marshall was troubled, though, by the contrast between the ideal of full citizenship and the reality of material squalor and deprivation that prevented most of his countrymen from taking full advantage of their civic freedoms.
“Shooting up,” as Marshall had done, can provoke feelings of guilt or a sense of obligation. Victorian fiction is populated by the “double” who shares the hero’s attributes and aspirations but is condemned to stay put while the other shoots up. When the American journalist and writer Henry James explored London on foot in 1869, Hyacinth Robinson, the protagonist of James’s 1886 novel about terrorists, seemed to jump “out of the London pavement.” James was watching the parade of brilliantly dressed figures, carriages, brilliantly lit mansions and theaters, the clubs and picture galleries emitting agreeable gusts of sound with a sense of doors that “opened into light and warmth and cheer, into good and charming relations,” when he conceived a young man very much like himself “watching the same public show . . . I had watched myself,” including “all the swarming facts” that spoke of “freedom and ease, knowledge and power, money, opportunity and satiety,” with only one difference: the bookbinder turned bomber in The Princess Casamassima would “be able to revolve around them but at the most respectful of distances and with every door of approach shut in his face.”36
Having been admitted to the rarified world of freedom, opportunity, knowledge, and ease, if not power or great wealth, Marshall kept the face of his double where he could see it every day:
I saw in a shop-window a small oil painting [of a man’s face with a strikingly gaunt and wistful expression, as of one “down and out”] and bought it for a few shillings. I set it up above the chimney piece in my room in college and thenceforward called it my patron saint, and devoted myself to trying how to fit men like that for heaven.37
As Marshall studied the works of the founders of political economy, “economics grew and grew in practical urgency, not so much in relation to the growth of wealth as to the quality of life; and I settled down to it.” The “settling” took a while. He found “the dry land of facts” intellectually unappetizing and socially unappealing. When he was asked to take over some lectures on political economy, Marshall agreed reluctantly. “I taught economics . . . but repelled with indignation the suggestion that I was an economist . . . ‘I am a philosopher straying in a foreign land.’ ”38
When Marshall began to study economics seriously in 1867, his mentor Sidgwick was convinced that the “halcyon days of Political Economy had passed away.”39 After the success of the 1846 Corn Law repeal, which was followed by a period of low food prices, political economy had a brief turn as “a true science on par with astronomy.”40 But the economic crisis and political upheavals of the 1860s revived the old animus against the discipline among intellectuals. Going a step beyond Carlyle’s epithet “the dismal science,” John Ruskin, the art historian, dismissed political economics as “that bastard science” and, like Dickens, called for a new economics; “a real science of political economy.”41 The fundamental problem, observed Himmelfarb, was that “the science of riches” clashed with the evangelicalism of the late Victorian era.42 Victorians were repelled by the notion that greed was good or that the invisible hand of competition guaranteed the best of all possible outcomes for society as a whole.
With the advent of the franchise for working men, both political parties were courting the labor vote. But “political economy” was invoked to oppose every reform—whether higher pay for farm laborers or relief for the poor—on the grounds that it would slow down the growth of the nation’s wealth. While the founders of political economy had been radical reformers in their day, championing women’s rights, the abolition of slavery, and middle-class interests versus those of the aristocracy, their theories pitted their disciples against labor. As Virginia Woolf’s father, Leslie Stephen, remarked: “The doctrine . . . was used to crush all manner of socialist schemes. . . . Political economists were supposed to accept a fatalistic theory, announcing the utter impossibility of all schemes for social regeneration.”43
For example, when Henry Fawcett, the reform-minded professor of political economy at Cambridge, addressed striking workers, he told them that they were cutting their own throats. Such advice outraged Ruskin, who said, after a builders’ strike in 1869, “The political economists are helpless—practically mute; no demonstrable solution of the difficulty can be given by them, such as may convince or calm the opposing parties.”44 Mill was an even more dramatic example than Fawcett. Now a Radical member of parliament, Mill called himself a Socialist, and had championed the Second Reform Act and the right of workers to unionize and strike. Yet Mill’s view of the future of the working classes was scarcely less dour than that of Ricardo or Marx. J. E. Cairnes, a professor at University College London who published a famous indictment of slavery as an economic system, echoed Mill’s position a few years later:
The margin for the possible improvement of their lot is confined within narrow barriers which cannot be passed and the problem of their elevation is hopeless. As a body, they will not rise at all. A few, more energetic or more fortunate than the rest, will from time to time escape . . . but the great majority will remain substantially where they are. The remuneration of labor, as such, skilled or unskilled, can never rise much above its present level.45
At the heart of Mill’s pessimism lay the so-called wages fund theory. According to this theory, ultimately disowned by Mill but never replaced by him, only a finite amount of resources was available to pay wages. Once the fund was exhausted, there was no way to increase the aggregate amount of pay. In effect, the demand for labor was fixed, so that only the supply of labor had any effect on wages. Thus, one group of workers could obtain higher wages only at the expense of lower wages for others. If unions succeeded in winning a wage rate in excess of the rate of the wages fund, unemployment would result. If the government intervened by taxing the affluent to subsidize wages, the working population would increase, causing more unemployment and even higher taxation. Moreover, the use of taxes to subsidize pay would reduce efficiency by removing competition and the fear of unemployment. Eventually, Mill warned, “taxation for the support of the poor would engross the whole income of the country.”46 Unless the working classes acquired prudential habits of thrift and birth control, the author of a popular American textbook claimed, “they will people down to their old scale of living.”47 In her political economy primer, Millicent Fawcett cited the Corn Law repeal as proof that wages were tethered to a physiological minimum. Referring to the worker, she wrote:
Cheap food enabled him, not to live in greater comfort, but to support an increased number of children. These facts lead to the conclusion that no material improvement in the condition of the working classes can be permanent, unless it is accompanied by circumstances that will prevent a counter-balancing increase of population.48
By the time the Second Reform Act passed however, the theory that wages could not rise in the long run no longer looked tenable, and not only because of the dramatic increase in average pay. The conquest of nature by the railway, steamship, and power loom suggested that society was not yet close to natural limits to growth. The fact that emigrants were