SCOTTISH JOURNAL OF POLITICAL ECONOMY FEBRUARY 1956
| Published date | 01 February 1956 |
| DOI | http://doi.org/10.1111/j.1467-9485.1956.tb00803.x |
| Date | 01 February 1956 |
SCOTTISH JOURNAL
OF
POLITICAL
ECONOMY
FEBRUARY
1956
MARSHALL ON ECONOMIC
GROWTH
ALL of Marshall’s books and many of his occasional writings contain
something of his views on economic development
as
a
historical
process. None of them contains a complete or particularly elaborate
statement, the fuller developments being found in
Industry
and
Trade
and in the first edition of the
Principles.
To attempt an
exposition of Marshall’s views on this subject therefore requires the
collation of a good deal of material, published over thirty-six years,
and written, in all probability, over
a
still greater period of time.
This
docs not seem to matter much, however,
as
the views expressed in
Money, Credit, and Commerce,
published
in
1923,
do not differ
markedly from those to be found in the
Principles
or in the evidence
given before the Gold and Silver Commission in
1887.
I
Marshall never produced
a
theory of economic growth, and there
is no such thing as
a
‘
Marshallian system
’.
To
speak of Marshall’s
‘
determinants
’
of economic growth is therefore apt
to
be misleading
unless the word is dissociated from the idea
of
some logically complete
construct. What Marshall did was to outline the nature and operation
of certain forces which he considered to be of prime importance in
causing
or
facilitating economic development.
For
the sake of brevity
we may call these forces determinants
of
economic growth
;
and taking
the
word in this slightly special sense, we may conveniently separate the
Marshallian determinants into three classes. First, there are the long-
run, fundamental determinants
;
secondly, there are those influences
which seem
to
bulk large enough
in
Marshall’s treatment to be called
major, but which differ from the fundamental determinants in being
of
a
more economic, man-made character
;
and thirdly, there are the
minor influences. This classification is of course somewhat arbitrary.
but
it
is a helpful one
in
summarising Marshall’s ideas.
2
A.
J.
YOUNGSON
Fundamental Determinants
Marshall lists four determinants which are long-run and funda-
mental in their working, although the fourth is of a somewhat different
nature from the other three. Basic and unalterable, there are climate,
and natural
'
resources and advantages conveniently disposed. Where
nature
is
ungenerous, there
is
no surplus out of which progress may
begin to be derived. 'And therefore, as Buckle has pointed out, all
early civilisations have been in warm climates where the necessaries of
life are small, and where Nature makes bountiful returns even to the
rudest cultivation.'' But progress here cannot be sustained
;
physical
toil is too hard, intellectual dilettantism too easy, and therefore it is
in
the
'
invigorating atmosphere
'
of
'
colder climates
',2
where, moreover,
the sea provides man with the possibility of constant intercourse,
'
knowledge, freedom and the power of variation
',
that progress finally
takes root and continues. And after these two, there
is
human char-
acter.
Thus
we learn that the
'
strength of character of the Romans
fitted them for business';$ that the United States owes some
of
its
prosperity to its being inhabited by
'
a mixture of races
of
great energy
and alertness';" that the English 'from
1066
down to the present
time
. .
.
the same people
"
after centuries of economic backwardness
'
at last
.
.
.
threw their own special characteristics into business affairs
with such energy, and such quickness of adaptation to the ever-
increasing massiveness of the economic problems of the Western
World, that they became its chief pioneers of progress and trade
'.*
The fourth fundamental determinant is not a 'natural' but a
political one
:
this is human freedom. Economic growth is depicted
by Marshall. in fact, almost as the material counterpart of the growth
of
freedom, the second of the two great co-variants of history. Thus
we are reminded that primitive societies suffer from the rule of custom,
probably
'
the most important of all the causes which have delayed
the growth of the spirit of free enterprise among mankind
';'
the cities
of the Middle Ages, we are told, 'led the way towards modem
industrial civilization
'
and might have realised it had they retained
'
their first love of liberty and social equality
';8
only an inferior
Alfred Marshall,
Principles
of
Economics
(London,
1890).
Book
I,
Ch.
2,
sect.
1.
All
references
to
the
Principlee
are
to
the
first
edition unless
otherwise stated. Passages corresponding to those quoted are as
a
rule
to
be
found in Appendix
A
of the later editions.
'Principles,
Book
I,
Ch.
2,
sect.
1.
See
also
Principles,
Book
I,
Ch. 3,
sects.
1
and 3.
a
Ibid.,
Book
I..Ch. 2, sect.
4.
"
Money,
Credat,
and Commerce
(London, 1923).
p.
221.
Induatrg
and Trade
(London, 1919).
p.
35.
Ibid.,
p.
35.
Ibtd.,
Book
I,
Ch. 2, sect.
7.
'
Pr+aplee.
Book
I,
Ch. 2.
scct.
2.
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