The elusive arthur pigou



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ECONOMICS


THE ELUSIVE ARTHUR PIGOU

by

Karen Knight
and
Michael McLure
Business School

University of Western Australia
DISCUSSION PAPER 12.05

THE ELUSIVE ARTHUR PIGOU

by

Karen Knight and Michael McLure*



Business School

University of Western Australia




DISCUSSION PAPER 12.05

The Elusive Arthur Pigou
A. C. Pigou’s published scholarly work has left an enduring legacy of his philosophical and economic thought, but biographical information on the man remains fragmentary, although some high quality brief biographical reviews have been prepared. These include the pamphlet Arthur Cecil Pigou 1877-1959 A Memoir, prepared at Cambridge shortly after Pigou’s death by J. Saltmarsh and P. Wilkinson (1960), an encylopaedia entry by Austin Robinson (1968), a book chapter by David Collard (1981), and the new introduction to Pigou’s The Economics of Welfare by Nahid Aslanbeigui (2010). In addition, some journal articles also include useful biographical details, such as those by David Champernowne (1959), Harry Johnson (1960) and Aslanbeigui (1992, 1997). But all this is in marked contrast to the two other iconic economists of the Cambridge school, with both Alfred Marshall and John Maynard Keynes being the subject of comprehensive biographies that have been published in the form of truly impressive tomes.1

Collard (1981) once described Arthur Pigou’s elusive standing as being “caught between the shadow of Marshall and the pyrotechnics of Keynes”. Other factors that contributed to this elusive standing include a life-long discipline of keeping his professional and personal life distinctly separate; personal traits that, as Saltmarsh and Wilkinson (1960, pp. 16-17) have recalled, revealed a great shyness towards casual acquaintances (particularly with regard to women); and a tendency to be “brusque when privacy was invaded without warning” (Saltmarsh and Wilkinson (1960, pp. 16-17). Indeed, Arthur Pigou seemed to have vigilantly maintained personal privacy with regards to his life outside that of scholarship and work which, when advancing in age, led colleagues to regard him as reclusive. Contemporary scholars now have the opportunity to reconsider Arthur Pigou’s underlying motivations and experiences; but, alas, this has to be done with the aid of little or no additional primary resources because his personal and working papers were almost completely destroyed after his death (Aslanbeigui 1997).

The purpose of this chapter is to reconstruct a general biographical account of Arthur Pigou’s life. But with available records on his life being fragmented, it has not been possible to fully develop a ‘moving picture’ of his life. As a consequence, we have had to arrange the text, which combines a chronological sequence of Pigou’s professional life, with an ad hoc thematic presentation of personal aspects of Pigou’s adult life. We delve into Arthur Pigou’s family and heritage in section 2. His life at Cambridge is then discussed in broad chronological order. Specifically, his student life is considered in section 3, focusing on the breadth of his studies, his extra curricula university activities and his fellowship theses. The period from his election to fellowship at King’s College to his appointment as the Cambridge professor of political economy is discussed in section 4. A reflection on the life of the ‘the Prof’ is contained within section 5. Issues considered in that section include his idiosyncrasies related to his work habits and his mentoring of students; the general character of his scholarly contributions; and the role he played in the intellectual leadership of the economics discipline at Cambridge. The chronological sequence is broken in section 6, which is thematically arranged and reports on aspects of Pigou’s personal life as an adult. This includes some reflection on the general nature of his relationships with women and men; his passion for mountaineering; the ordeals resulting from his commitment to pacifism; and his views on politics and his relatively modest contributions to public service. The chapter concludes in section 7 with final reflections that point to the gaps still to be bridged before a good understanding of Arthur Pigou can be developed.

2. Family, Heritage and School
Arthur Cecil Pigou was born at Ryde on the Isle of Wight in 1877. He was the first born son and eldest child of Clarence George Scott Pigou, an army officer in the 15Regiment, and his wife Nora Frances Sophia (Lees), the second eldest daughter of Sir John Lees, the 3th rd Baronet of Blackrock.2 Arthur’s brother, Gerard Clarence, was born the following year and his sister, Kathleen Marie, in 1881.

The wedding of Arthur’s parents was colourfully reported in the Isle of Wight Times as ‘Ryde’s “Royal Wedding” of 1876’. From the recent recounting of that wedding prepared by the Ryde Social Heritage Group (2010), it is evident that both the general standing and wealth of the Lees and the Pigou families were high at the height of the Victorian era.3 The Pigou family were of Huguenot descent and had vigorously established themselves in British society over four generations as merchants, civil servants and army officers with connections in India and China (Sherwood and Chater, 2005). Arthur’s second cousin, Frederick Alexander Pigou, inherited a stake in the family business, including the manufacture of gunpowder in Dartford.4 Indeed, during his youth, Clarence Pigou (Arthur’s father) spent some time living with Frederick Alexander Pigou’s family in Putney so he could pursue his education in Great Britain while Clarence’s father continued with his commitments in India.5

Within the extended Pigou family, a tradition had developed whereby the eldest son of the family attended Harrow School, dating back to the late 1820s when Henry Minchin Pigou (1791-1874) sent his son, Frederick John (1815-1847), to that school. This lineage continued, with Arthur’s father, Clarence, attending Harrow during the 1860s. The fourteen year old Arthur Pigou became the fifth member of Pigou lineage to attend Harrow when he commenced there in 1891. The School Register records Arthur’s family address as “The Larches”, Pembury, Kent. This was a quiet village, and is the place where the Pigou family settled during the 1880s.6 Arthur’s formative years, prior to his commencement at Harrow, were spent as a member of a well-connected, comparatively wealthy and extended family of the Victorian era. He would certainly have been subject to the tutelage required to prepare him for entrance to Harrow, where his contemporaries included Sir Winston Churchill (the Conservative First Lord of the Admiralty and later Prime Minister), Leopold Amery (the Conservative First Lord of the Admiralty and Colonial Secretary) and his friend George M. Trevelyan (the British Historian). D.G. Champernowne (1959) describes Pigou at Harrow as “a god among mortals”, which, given his peers, is a remarkable achievement. Arthur is certainly recorded as having excelled at Harrow, both academically and in athletics, and winning the respect of both teachers and peers. He was elected a School Monitor in 1894 and in his final year he was made Head of the School. Arthur left Harrow at the end of 1895 after having won the Clayton Scholarship for Modern Studies, which he used to attend King’s at Cambridge to study History and Modern Languages.

Arthur’s father, Clarence Pigou, and his sister Constance are recorded in English census records as spending some of their formative years living with the family of Frederick John Pigou.7 Frederick was married to Margaret Catherine Johnston, and her younger sister, Cecilia Charlotte Jane Johnston, married Clarence’s Father.8 The Harrow school register lists Frederick John Pigou as having been disinherited by his father, Henry Minchin Pigou, for marrying without his permission. Frederick John went on to work for the London and Birmingham Railway Company in 1840, and became Station Master at Rugby. He died at the young age of 31, leaving his wife an annuitant, living on dividends from investments. It remains unestablished which son, if any, Henry Minchin Pigou left his considerable fortune to.9 The executer is listed as his second eldest son, the Reverend Henry Clarence Pigou, and tracing records from the England and Wales National Probate Calendars 1861-1941 indicate that the bulk of Henry Minchin Pigou’s fortune in its entirety did not pass down to the families of his sons Frederick John or Arthur.10 Whether or not this family history of disinheritance and untimely death impacted on the young Arthur is, of course, speculative, but it is difficult not to resist the temptation to speculate that his family history may have contributed to certain of his more particular personal characteristics, such as his tendency to shun any form of pretence. For example, Saltmarsh and Wilkinson (1960) recalled Arthur Pigou as a character who was “indifferent to the ornaments and innocent vanities of life” dressing with a “sartorial insouciance”. When this is coupled with his many acts of generosity (funding students, taking friends on overseas trips, funding climbing trips, donating vehicles in the war efforts etc.), Arthur Pigou’s personal relationship with “wealth” did not seem inclined to accumulation for its own sake. Rather, he seemed to have an ambivalent attitude towards “wealth” per se, being more interested in its utility; permitting him to pursue his life in a simplified manner, with time to devote to reflections on states of consciousness, and to assist and benefit his wider social circle.

Another point of interest arising from Pigou’s family background is his immediate family’s continuing close connections to the British military forces. Arthur’s brother, Gerard, joined the Royal Navy, serving in the Admiralty as a Captain during World War I. Their sister Kathleen married their cousin, Arthur Hugh Oldham, who was a Naval Commander. Arthur Oldham was the son of Arthur Pigou’s paternal aunty, Ella Frances and her husband Sir Henry (Hugh) Oldham. Sir Oldham had earned military distinction in China and India, and had been awarded the Knight Commander of the Royal Victorian Order on the celebration of Queen Victoria’s diamond jubilee. He later became Colonel Retired Pay and Lieutenant of H.M.’s Corps of Gentlemen-at-Arms, the Queen’s personal body guards. The question then arises as to whether Arthur reacted against these apparently strong familial connections to the military when he adopted and maintained pacifist sentiments during both World War I and World War II. In the case of World War I, this became a matter contentiously debated in a public forum (see section 7).

Surviving documents contain only snippets of information about the relationship that the young Arthur enjoyed with the rest of his family. For example, his published essay Robert Browning as a Religious Teacher (1901) is dedicated to his mother and, in his final will and testimony, he left a substantial sum of money to Anthony John Pigou, his brother’s son. Also, Saltmarsh and Wilkinson (1960) report that “his only concession to sartorial elegance at the High Table” at Cambridge was “a double-breasted lounge jacket filched from a parcel of clothes which his aunt was sending to a Church Army shelter” and Pigou’s generosity, in reference to Arthur receiving a small legacy as a young man - “he blued the lot on taking some friends for a trip abroad”. Both of his siblings married and had children. They remained settled in London and the South East of England, although Arthur outlived both his brother and sister (by two and four years respectively). Branches of the extended Pigou family immigrated to Canada, Australia and New Zealand around the turn of the 20 century and Pigou descendants became notable in several fields including Elfrida Pigou (1911-1960), who became a prominent Canadian mountaineer, and Francis Pigou (1832-1916), who was the Dean of Bristol.



3. Student Life at Cambridge
When Pigou was admitted to King’s College Cambridge in October 1896, he was full of energy and enthusiasm for the prospect of academic and co-curricular activities open to students residing in Cambridge. Having achieved academic success at Harrow and obtained a minor scholarship in history and modern languages to study at Cambridge, he was quietly confident in his own intellectual abilities. But to develop his intellectual potential and benefit fully from his experience as a student at one of the most elite universities in the world, he was also very conscious of the need to engage with College fellows, as well as his peers, on social ideas. In that regard, he was a conscientiously ‘engaged’ student throughout his residency at King’s College.

Pigou’s first area of study as a student at Cambridge University was the ‘undivided Historical Tripos’. This program of study was, at least for the period when he was an undergraduate student, ‘undivided’ in the sense that it was not offered as a two part program, which, for example, was the case with the Moral Sciences Tripos. The historical element of the Tripos was also oriented towards the practical goal of developing students’ capacities to learn and reason in matters of politics and public affairs. During this period Pigou was mentored by his tutor Oscar Browning,th with tutor and student entering into correspondents on a range of issues. Among other things, the relationship between Browning and Pigou was helpful to Pigou being promoted to an undergraduate scholarship in 1898,11 which assisted Pigou financially when completing his undergraduate studies. It also led to Pigou being invited to the King’s College Political Society, which Browning had founded to further the scientific study of political issues (Browning 1910: 245-236). It was also during the time that Pigou was being mentored by Browning as a student in the Historical Tripos that signs of Pigou’s interest in economics and ethics emerged.12

In 1899 Pigou obtained his first Bachelor of Arts degree by obtaining a ‘first’ in the undivided Historical Tripos. Given Pigou’s growing interest in economics and ethics, and the fact that the Historical Tripos was oriented towards educating statesmen, it is perhaps not surprising that he then immediately commenced Part II of the Moral Sciences Tripos, which he also completed with a ‘first’, this time in 1900. During this period Pigou further developed his understanding of economics and ethics and political philosophy, largely under the influence of a new mentor, namely Alfred Marshall, who, as well as being very influential in securing posts for Pigou at Cambridge, was to prove the greatest single influence on the development of Pigou as a scholar.

In the later stages of his studies in the Historical Tripos, Pigou had commenced work on a number of projects that led to him being awarded a number of prizes from the Cambridge academic community. In 1899 he received the Chancellor’s Medal for English verse, which was awarded in recognition of his ode to Alfred the Great, a literary treatment that refers to ‘truth’s bright star’ and ‘Reason’s light’. In 1900, while studying for Part II of the Moral Sciences Tripos, Pigou entered his essay on Robert Browning as a Religious Teacher into competition for the Burney Prize – a prize awarded to the best essay submitted dealing with the philosophy of religion – which he won, with the essay subsequently published (Pigou 1901). In the following year Pigou submitted his dissertation on The Causes and Effects of Change in the Relative Values of Agricultural Produce in the United Kingdom during the last Fifty Years (Pigou 1901b) to the competition for the Cobden Prize. Once again, that submission was successful and Pigou was awarded the Cobden Prize in 1901.

As Pigou turned his mind to his future career, he decided to enter the fellowship competition at King’s College, which requires submission of a fellowship thesis which is assessed by referees associated with the College.13 In 1901 he submitted his Burney Prize winning essay on Robert Browning as his fellowship thesis. It was perhaps a curious choice because, in the same year, Alfred Marshall had persuaded the Moral Sciences Board to allow Pigou to present Marshall’s ‘General Course’ in economics and one may have expected Pigou to submit an economics dissertation for the fellowship competition. When that point was put to Pigou, however, he expressed surprise and responded that his study surely “comes under the Moral Sciences Tripos.” (Pigou, circa 1900-1901, letter to Oscar Browning, King’s College Archive Centre: OB/1/1281/A). While Marshall was not a referee for this fellowship dissertation, he was nevertheless asked by the Provost of the College for his views on Pigou and wrote that “my hopes as to what he will achieve for economics and for social well-being are as high as they well can be. … With perhaps one exception, I have never wished so strongly to see any student retained at Cambridge, as Pigou”. (Marshall, 8 March 1901, letter to the Provost, King’s College, cited in McLure forthcoming). But notwithstanding this strong support from Marshall, the dissertation on Robert Browning was not successful in obtaining a fellowship for Pigou at King’s in 1901.

In the following year, Pigou submitted his Cobden Prize winning dissertation to King’s College as part of the fellowship round. This time Marshall was a referee for the study and he wrote a very strong report in support of Pigou. Herbert Foxwell was also invited to report on the dissertation, but he initially declined the invitation because of the ‘antagonistic position’ between Pigou and Foxwell as lecturers at Cambridge.14 However, he eventually accepted the invitation to review Pigou’s dissertation. The resulting report was very supportive of Pigou’s historical judgements and the quality of his writing, but it was also very critical of the extent to which Pigou attempted to apply economic theory to the history of agricultural commodity values, rather than by employing the more conventional methodologies of economic history that Foxwell regarded as more suitable. But these qualifications were not strong enough to offset the positive aspects of both Marshall’s and Foxwell’s reports and Pigou was elected a fellow of King’s College in 1902.



4. The Fellow
As a student and college resident at Cambridge, Pigou worked at developing his knowledge of history, economics, ethics and poetry by being fully immersed within the moral sciences tradition. Between being elected as a Fellow of King’s College, in 1902, and being appointed as the Cambridge University Professor of Economics at Cambridge University, in 1908, the story of Pigou’s intellectual development continued along a similar line, although the analytical insight he applied to the economic dimension of social and ethical problems increased. He also acquired new teaching duties that befitted a fellow, initially by relieving Marshall from his general course in economics and then, more formally, as the Girdler’s Lecturer in economics at Cambridge from 1904 until 1907.

Perhaps the most obvious continuity, as Pigou moved from student to fellow, was his continued interests in scholarly prizes, winning the Adam Smith prize at Cambridge in 1903 for an essay, which was revised and published in 1905 as the Principles and Methods of Industrial Peace (Pigou 1905). This award winning essay, which also formed the basis of eight lectures of the 1903-04 Jevons’ Memorial Lectures he presented at University College London on Associations of Employers and Employed, Arbitration and Conciliation, is of interest to intellectual historians for the framing of labour market problems with reference to ethics.


“The problem of this book is ethical to determine what principles and methods ought to be employed in the settlement of industrial differences … But the solution of the ethical problem can only be reached with the help of an investigation of actual and recent experience…”

(Pigou 1905, p.xi)


While he recognised that the issue of industrial peace ‘is not confined to the narrow circle of economists’ (Pigou 1905, p. vi), the analysis is still rich in economic ideas, with the explicit and formal use of economic analysis reserved for the appendices. At the most general level, Principles and Methods of Industrial Peace enunciates Pigou’s view that social problems are themselves ethical in character; whereas economic analysis – in the case of this book economic analysis was generally derived from Marshall’s Principles, but Edgeworth’s Mathematical Psychics was influential too – with historical instruments also solving the ethical question. As such, Pigou was consciously aligning his views on the relevance and purpose of economics with those of his teacher, Alfred Marshall. Indeed, even the subject of this book was suggested to him by Marshall (Pigou 1905, p. vii). The book is also of historical interest for its focus on an issue that subsequently featured prominently in his formal definition of economic welfare, namely, improving the living standards of the working poor and their families.15 It also features an important theme of his subsequent work on welfare economics, namely, the complexities associated with balancing efficiency, in this case efficiency in the setting of wage rates, with broader redistributive goals.

Two related issues emerge from Pigou’s early fellowship period. First, how did Pigou attempt to reconcile the potential conflict between efficient outcomes that maximise national income with fair outcomes that may generate a reduced national income? Second, what did Pigou have to say about the ethical character of social problems? The first can be considered in the context of the British public policy debate that was emerging between 1902 and 1904 on the question of tariffs, which suggests that Pigou’s first concern was increases in national income. The second needs to be considered with reference to Pigou’s essays on ethics published in The Problem of Theism (Pigou 1908), some of which had been previously published in journals.

Pigou’s opposition to economic policies being based on tariffs was first to emerge in debates on trade policy undertaken within the Cambridge Union. Notable in that regard was Pigou’s confrontation with Sir Howard Vincent (Saltmarsh and Wilkinson 1960, p.7), who had founded the United Empire Trade League in 1891 following the failure of the Fair Trade League that largely emerged as part of the ‘protest movement’ that emerged to oppose the 1860 ‘Cobden Treaty’, which had heralded the rising acceptance of free trade principles in English public policy (Zebel 1940, p. 182).

The issue of protection came to prominence again early in the new century in the wake of the British Government’s 1902 decision to tax the importation of corn to cover costs associated with the Boar War. The British Colonial Secretary Joseph Chamberlain then started to reflect on the idea of increasing public revenues through broad increases in tariffs, which culminated in political and public campaigns on tariffs that he led in 1903 – even after he had resigned as Colonial Secretary from 16 September – and again in 1904, and then again in the lead up to the 1906 general election. Chamberlain is reported to have said that: “Henry Parks left as his legacy to the Australian people the watchword ‘One people and one destiny’. They are noble words. It is our task to extend them to the whole British Empire” (Joseph Chamberlain, cited in The [Adelaide] Advertiser, Thursday 20 March 1902, p. 669). His vision of strengthening both Britain and the empire was, in large part, to be implemented by complementing increases in ‘protective tariffs’, mainly imposed on manufactured goods imported from across the world, with lower ‘preferential tariffs’, mainly imposed on agricultural goods imported from Empire countries. Pigou critically assessed Chamberlain’s protectionist policies is his booklets, The Riddle of the Tariff (1903a) and Protective and Preferential Import Duties (1906a), and in his subsequent essays published in the Fortnightly Review, ‘The Known and the Unknown in Mr Chamberlain’s Policy’ (1904a), and the Edinburgh Review, ‘Mr Chamberlain’s Proposals’ (1904b) and ‘Protection and the Working Classes’ (1906b). All these essays are critical of protective tariffs and imperial preference, with Pigou estimating the loss of national income due to tariffs and noting that redistribution in response to preferential tariffs tended to favour landlords ((1904a [2002], (1904b [2002])); and rejecting the proposition that protection increases economic stability (1906 [2002]). Collard (2002, pp. xii-xiii) astutely pointed out that while the polemical tone of these papers is readily evident to the reader, the level of analysis with which they are supported would not be out of place in the Economic Journal.

Of course, the role of the tariffs issue was politically contested and controversial at that time, with divisions within government and across the public and Pigou was not acting in isolation. Indeed, as Coats (1968) has shown, economists of various persuasions had lined up on both sides of the debate. Pigou aligned himself with economists noted for their contributions to economic theory and analysis, who were often playing a prominent public role in supporting free trade. Perhaps most notably, Pigou joined Edgeworth, Marshall and eleven other prominent economists in signing a joint letter that was published in The Times on 15 August 1903 under the heading “Economics Professors and the Tariff Question”, which questioned the logic of protectionism.16 Leo Amery – a contemporary of Pigou and fellow languages student at Harrow, enthusiastic supporter of Chamberlain (writing in The Times under the pseudonym a “Tariff Reformer”) and, subsequently, a Conservative Cabinet Minister – dismissed this public letter as ‘pontifical’ in its arrogance and ‘a worthy example of the palmiest days of Ricardo and McCulloch” (Amery 1908, p. 4). Economists with ‘historicist sympathies’, such as William Ashley, William Hewins and Herbert Foxwell, tended to offer support for Chamberlain’s position (Moore 2003, p. 60). Ashley, in his The Tariff Problem (1903), provided perhaps the most sober and careful study of the limits of free trade.17 Among other things, he pointed to issues such as ‘dumping’ by monopolies that emerge during cyclical fluctuations and the circumstances when protection can attract ‘fresh capital’ from overseas.18

Pigou, however, was directly critical of some of Ashley’s conclusions in The Riddle of the Tariff (Pigou 1903). In particular, he concluded that the proposition that protection may attract ‘fresh’ capital from abroad was unsound, because, in the general case, protection is economically injurious and leads to an overall reduction in profits earned on capital (although Pigou did not address the ‘particular case’ in which investment is attracted behind the tariff ‘wall’ into a particular – protected – industry). Others, in turn, were critical of Pigou’s The Riddle of the Tariff. Amery, in The Times, suggested that Pigou’s booklet highlighted his ignorance of economics and Longford Lowell Price argued that Pigou’s analysis relied excessively on perfect competition (Takami, 2012 pp 10-11). Curiously, Lloyd, who accepted some of the qualifications associated with the protectionist critique of free trade, was the judge for the ‘Cobden’ Prize in 1901: he therefore awarded that prize to Pigou, and, indirectly, helped Pigou to win a fellowship at King’s College.19 .

In addition to applied questions in economics, such as questions of trade policy and industrial relations, Pigou devoted time to core issues in equilibrium economics that laid the formal foundation for his subsequent work on welfare theory. Particularly important in that regard are ‘Some Remarks on Utility’ (Pigou 1903b) and ‘Producers’ and ‘Consumers’ Surplus’ (Pigou 1910). The former study struggled with the relationship between demand and utility when an individual’s assessment of the marginal value of their consumption changed with consumption by others. In modern Pigouvian language, it considered whether demand related externalities exist when goods are not common across society as a whole, but are common amongst a subclass of society that one may aspire to, such as diamonds and tuxedos among the wealthy elite. His conclusion at that early stage was that such matters exist but that they represent a relatively small influence on an individual’s consumption and can be ignored in a first approximation study of individual demand. In ‘Producers’ and ‘Consumers’ Surplus’ (1910), however, Pigou had developed his analytical apparatus considerably in manner that systematically accounted for externalities (although, without using the term): both demand related externalities, where an individual’s demand is influenced by others consumption of consumer goods, and supply related externalities, where the supply of a good affects the wellbeing of people who are not a direct party to the exchange of the good in question. The efficiency consequences of these factors are discussed in that paper, as are corrective measures.20

Finally, and importantly, Pigou continued his interest in ethics and philosophy. This was no passive interest either. Rather, it was an area of study that he took seriously. In 1908, three of Pigou’s earlier articles from the International Journal of Ethics, namely ‘The problem of good’, ‘The ethics of the Gospels’, and ‘The ethics of Nietzsche’, plus one article from the Independent Review, namely ‘The optimism of Browning and Meredith’, were republished in his book The Problem of Theism and Other Essays (Pigou 1908), which also included three new chapters: ‘The general nature of reality’, ‘The problem of Theism’ and ‘Free will’. Some of these works are obvious extensions of his undergraduate works, with the Browning and religious themes of his Burney Prize winning essay being revived in the chapters on the optimism of Browning and Meredith, the problem of theism, and ‘the ethics of the Gospels’. Other chapters were to influence subsequent work on welfare economics. For example, the first sentence of the first chapter of Wealth and Welfare (Pigou 1912, p. 3) commences by citing G.E. Moore from Principia Ethica: “If I am asked ‘What is Good?’ my answer is that good is good. Or, if I am asked ‘How is good defined?’, my answer is that it cannot be defined, and that is all I have to say about it” (Moore, 1903, p. 6) and Pigou then goes on to discuss the relationship between economic welfare and welfare in general. Similarly, in the essay ‘The problem of Good’, Pigou is concerned with the views of G. E. Moore, although he also considers the great late Victorian philosophers, Sidgwick (in Cambridge) and T. E. Green (in Oxford) and, in the process, engaging in discussion with Mr J. M. Keynes and the Rev. J. R. P. Sclater, who are acknowledged in the preface to The Problem of Theism for making “useful suggestions upon special points” (Pigou 1908, p.viii). It should also be noted that the chapter entitled ‘The general nature of reality’ is particularly notable for drawing out the methodological issues of social enquiry that derive from philosophical thought and which pertain to his subsequent method of science, in that it recognises that at least part of the independent reality that social scientists deal with concerns the spirits of living men.



Consequently, in the lead up to Pigou being appointed Professor of Economics at Cambridge University, his preparations for serious reflection on economics was preceded by philosophic reflection on the nature of what is good, the nature of science and the tools of economic analysis. In other words, he was laying the grounding for his seminal works in the field of welfare economics.
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