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A.C. Pigou (1877–1959)

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Abstract

This chapter overviews the aspects of A.C. Pigou’s intellectual life that mark him as a very important figure in the history of Cambridge economics. His biography is briefly examined, with consideration given to his activities before arriving at Cambridge, his prize-winning activities as a student at Cambridge, his public-spirited activities as a Fellow of King’s College, and the leadership role that he played in the practice and development of economics at Cambridge during his tenure as the Professor of Political Economy. Pigou’s major contributions to the creation of economic knowledge are also reviewed, from his earliest work on utility, employment, and trade through to his late career work on unemployment and its relationship to macroeconomic thinking. A reflection on his contributions to official public service is also included.

The authors would like to thank Geoff Harcourt and Robert Leeson for their comments on a draft of this chapter.

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Notes

  1. 1.

    The Baronetcy of Blackrock in the County of Dublin was created for John Lees, soldier, politician and administrator, on 30 June 1804, in the Baronetage of the United Kingdom (Lundy 2012).

  2. 2.

    Pigou’s attempts to obtain a Fellowship, and the referees’ assessments of his Fellowship dissertations, are discussed in McLure (2013a).

  3. 3.

    For further discussion on Pigou’s appointment, see Coase (1972), Coats (1967) and Jones (1978).

  4. 4.

    ‘It is prima facie desirable that arbitrators should seek somewhat to modify the general distribution of wealth awarding to poor workpeople higher wages than the trend of economic forces would naturally bring about, provided that these wages seem likely to come from the pockets of relatively wealthy persons’ (Pigou 1905: xi). Takami (2014) provides an interesting reconstruction of the intellectual environment that Pigou faced at Cambridge, including discussion of the potential influence of the Fabian Society and socialism more generally on Pigou’s thinking up to 1912.

  5. 5.

    The letter is reprinted in Coats (1992: 314–315).

  6. 6.

    The relationship between ‘Some Remarks on Utility’ (Pigou 1903b) and ‘Producers’ and Consumers’ Surplus’ (Pigou 1910 [2002]) is considered in McLure (2010).

  7. 7.

    Indeed, today the manifesto of the so-called Pigou Club, established by Gregory Mankiw (2006), advocates the imposition of a Pigouvian tax on gasoline to combat, amongst other things, global warming and road congestion.

  8. 8.

    These episodes are discussed in some detail by Aslanbeigui (1996).

  9. 9.

    Modern historians of Marshallian economics, such as Neil Hart (2013), are even more critical of Pigou, suggesting that his work on costs and the equilibrium firm closed off the evolutionary dimension of Marshall’s work to the economics profession, with the result being that important evolutionary themes in Marshall were not to be developed further.

  10. 10.

    The definitive ‘rational’ treatment of this historical issue was undertaken by Ambrosi (2003).

  11. 11.

    Pigou freely advised others to do the same. As Harcourt (2012) notes: ‘Paul Samuelson gave Pigou one of his articles—it may have been factor price equalisation in the 1940s or 1950s and Pigou asked had the maths been checked. Samuelson said he did maths. Pigou said, “No, I mean by a Cambridge mathematician”’.

  12. 12.

    Pigou also provided considerable support to Richard Kahn, particularly in the consideration and endorsement of Kahn’s Fellowship dissertation, providing advice to Kahn to publish the work without delay, advice Kahn did not in the end act upon (see Aslanbeigui and Oakes 2010 and Harcourt 1991).

  13. 13.

    The relationship between Pigou and his younger colleagues is discussed in Naldi (2005).

References

Selected Writings of A.C. Pigou

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  • Pigou, A.C. (1905). Principles and Methods of Industrial Peace. London: Macmillan.

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  • Pigou, A.C. (1906a). Protective and Preferential Import Duties. London: Macmillan.

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  • Pigou, A.C. (1906b) [2002]. ‘Protection and the Working Classes’. Edinburgh Review, 203(415): 1–32. Reprinted in D. Collard (ed.) (2002) A.C. Pigou Journal Articles 1902–1922. Basingstoke: Palgrave Macmillan: 95–126.

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  • Pigou, A.C. (1908). The Problem of Theism and Other Essays. London: Macmillan.

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  • Pigou, A.C. (1910). ‘A Method of Determining the Numerical Value of Elasticities of Demand’. Economic Journal, 20(80): 636–640.

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  • Pigou, A.C. (1912). Wealth and Welfare. London: Macmillan.

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  • Pigou, A.C. (1917). ‘The Value of Money’. Quarterly Journal of Economics, 32(1): 38–65. Reprinted in D. Collard (ed.) (2002) A.C. Pigou Journal Articles 1902–1922. Basingstoke: Palgrave Macmillan: 199–218.

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  • Pigou, A.C. (1920). The Economics of Welfare. London: Macmillan. Subsequent Macmillan editions: 1920 first edition, 1924 second edition, 1929 third edition, fourth edition 1932.

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  • Pigou, A.C. (1921). Political Economy of War. London: Macmillan.

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  • Pigou, A.C. (1926). ‘A Contribution to the Theory of Credit’. Economic Journal, 36(142): 215–227.

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Other References: Unpublished Documents

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Published Documents

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Author information

Authors and Affiliations

  1. Researcher in Economics, Western Australia, Australia

    Karen Knight

  2. Professor of Economics, Business School, University of Western Australia, Western Australia, Australia

    Michael McLure

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  1. Karen Knight
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Correspondence to Karen Knight or Michael McLure .

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    Robert A. Cord

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Knight, K., McLure, M. (2017). A.C. Pigou (1877–1959). In: Cord, R. (eds) The Palgrave Companion to Cambridge Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-41233-1_20

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