Tiziano Raffaelli, Tamotsu Nishizawa and Simon Cook (Eds) (2011): Marshall, Marshallians and Industry Economics

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Tiziano Raffaelli, Tamotsu Nishizawa and Simon Cook (eds) (2011)

Marshall, Marshallians and Industry Economics Routledge

pp. 326

Hardback: ISBN 978-0-415-55270-7 RRP: AUD 130

Introduction (1)

The editors' introduction to Marshall, Marshallians and Industry Economics, begins with the following observation:

   In recent years, Alfred Marshall's reflections on industrial
   organization have attracted renewed attention, first in the booming
   literature on the industrial district and then as anticipations of
   the competence theory of the firm. Firms are no longer seen as
   devices aimed to economize transaction costs but as organisms that
   grow and thrive, thanks to their core competencies. This attitude
   has fostered a revival of interest in Marshall's theory of
   industrial organization which now proves itself to be of
   long-lasting relevance. (p. xv)

In this setting, the scope of the volume is described in the following manner:

   The book develops the line of research that inspired The Elgar
   Companion to Alfred Marshall and found expression in the part
   devoted to Marshall in the recent Marshall and Schumpeter on
   Evolution [Shionoya and Nishizawa 2008]. The perspective here is
   enriched by new considerations on Marshall's thought and by deeper
   attention to the school of industrial economics that took
   inspiration from it and to contemporary research related to that
   tradition. (p. xvii)

To readers familiar with the contents of The Elgar Companion of Alfred Marshall (Raffaelli et al. 2006), the editors' observations on the nature and significance of Alfred Marshall's industrial economics would appear to be rather uncontroversial, reflecting the perspective increasingly taken by Marshall scholars over recent years. However, this is clearly not Marshall the equilibrium theorist that dwells (and at times remains hidden) in the standard microeconomics textbooks and which the wider community of economists has become acquainted with. Therefore, Marshall, Marshallians and Industry Economics could potentially fulfil two interrelated roles. First, it may augment and enrich the growing body of literature assembled by contemporary Marshall scholars that reflects the perspective clearly delineated in the editors' introduction. (2) Second, it may perhaps play a role in encouraging the more general reader to venture beyond the typical mainstream textbook portrayal of Marshall's contributions, and to consider more closely the enduring relevance of Marshall's approach to the analysis of industrial economics and economic thinking in general, in a manner advocated by the contributors to this volume. The difficulty in achieving the second type of objective should not be underestimated, as is perhaps most clearly reflected in David Collard's review of Arena and Quere's (2003) edited volume, The Economics of Alfred Marshall:

There are (at least) two sorts of Marshallian: the book-4 Marshallian and the book-5 Marshallian. Most of the contributors to this volume are book-4 Marshallians. Their collective point is that Marshall's true legacy was not the period analysis of book 5 but something much more dynamic, Darwinian, and empirically based. There is something in this view, although the present reviewer's position is that much though Marshall would have liked to have left a different legacy, he did not actually succeed in doing so. (Collard 2004: 401)

It is the popular notion that the content of Book V of the Principles (3) (together with the attached Mathematical Notes) could somehow be divorced from Marshall's other writings that has led to the textbook depiction of Marshall as a prominent pioneering equilibrium theorist in the marginalist tradition, and to the neglect of Marshall's approach to industry economics and his views on the role of historical analysis and applied work in the formulation of economic analysis. Irrespective of how Marshall's economics is evaluated, it was clearly Marshall's intention in the Principles (and elsewhere) to preserve a unity between the value theory being constructed within the partial equilibrium framework in Book V, and the essentially evolutionary explanations of industry organisation and economic development being described in Book IV and recurrently throughout the Principles. The neglect of Marshall's industrial economics has therefore reflected a fundamental misunderstanding and misrepresentation of Marshall's objectives; part of a process which Paul Samuelson (1967: 111) described in approving terms as 'getting Marshall out of the way'. Therefore, Marshall, Marshallians and Industrial Economics not only provides a vehicle through which the content and relevance of Marshall's own writings can be reassessed and reinvigorated; it also enables Marshall's insights and methodological approach to be shown to be of continuing relevance in the project of reconstructing industrial economics.

All but two of the chapters in Marshall, Marshallians and Industry Economics are based on contributions to a workshop held at Hitotsubashi University in 2008. The book begins with a general introduction provided by Giacomo Becattini, who over the years has been a particularly enthusiastic and effective promoter of Marshall's approach to the analysis of industry. The remainder of the book is divided into four sections; the first section contains three chapters dealing with some of Marshall's key ideas on industrial economics. The three chapters allocated to Section 2 place Marshall's industrial economics in the broader context of Marshall's perspective on economic and social interactions. The final two sections, containing ten chapters, consider aspects of the development of Marshall's industrial economics by his pupils and those who subsequently endeavoured to follow in the same tradition.