Arthur Cecil Pigou

Arthur Cecil Pigou

Born: 1877. Died: 1959.

Biography

As the prize student and designated heir of Alfred Marshall, Arthur Cecil Pigou personified the 'Cambridge Neoclassicals' - the heart of the Marshallian orthodoxy in the first third of the century. His main claim to fame is his Wealth and Welfare (1912, 1920), which brought social welfare into the scope of economic analysis. In particular, Arthur Pigou is responsible for the famous distinction between private and social marginal products and costs and the idea that governments can, via a mixture of taxes and subsidies, correct such market failures - or 'internalize the externalities'.

But Pigou was not a lucky man. His approach came immediately under severe attack from Robbins and Knight. The 'New Welfare Economics' that arose in the late 1930s dispensed with much of Pigou's analytical toolbox altogether. Later on, the Public Choice theorists assaulted Pigou's approach for its naive "benevolent despot" assumption and, finally, Coase demonstrated its irrelevance when property rights are properly assigned.

The other source of bad luck was that Pigou was used by John Maynard Keynes as the 'straight man'. In the General Theory, Keynes held up Pigou's Theory of Unemployment (1933) as the example of everything that was wrong with neo-classical macroeconomics. He never quite recovered from the shock of being betrayed by his old colleague and friend.

The rest of Pigou's life was spent occasionally counterattacking (e.g. with the Pigou Effect (1943-1947)) or submitting (e.g. 1945, 1951) to the Keynesian Revolution.

Major Books of Arthur Cecil Pigou

- A Study in Public Finance, 1928
- Aspects of British economic history, 1918-1925, 1947
- Economics in Practice: Six Lectures on Current Issues, 1935
- The Economics of Stationary States, 1935
- The Economics of Welfare, 1920
- Employment and Equilibrium, 1941
- Essays in Applied Economics, 1923
- Essays in Economics, 1952
- Import Duties, 1906
- Industrial Fluctuations, 1927
- Industrial Peace, 1905
- Keynes's General Theory: A retrospective view, 1951
- Lapses from Full Employment, 1944
- The Political Economy of War, 1922
- The Problem Of Theism And Other Essays, 1908
- The Reorganization Of Industry, with Arthur Greenwood, Sidney Webb, 1916
- Robert Browning as a Religious Teacher, 1901
- Tariffs, 1903
- The Theory of Unemployment, 1933
- Unemployment, 1914
- The Veil of Money, 1949
- Wealth and Welfare, 1912

Major Articles of Arthur Cecil Pigou

- 1904, Monopoly and Consumers' Surplus, EJ
- 1904, Pure Theory and the Fiscal Controversy, EJ
- 1907, Review of the Fifth Edition of Marshall's Principles of Economics, EJ
- 1908, Equilibrium Under Bilateral Monopoly, EJ
- 1910, Producers' and Consumers' Surplus, EJ
- 1917, The Value of Money, QJE
- 1922, Empty Economic Boxes: A reply, EJ
- 1927, The Law of Diminishing and Increasing Cost, EJ
- 1927, Wage Policy and Unemployment, EJ
- 1928, An Analysis of Supply, EJ
- 1929, Disturbances of Equilibrium in International Trade, EJ
- 1936, Mr. J.M. Keynes's General Theory, Economica
- 1937, Real and Money Wage Rates in Relation to Unemployment, EJ
- 1938, Money Wages in Relation to Unemployment, EJ
- 1940, War Finance and Inflation, EJ
- 1943, The Classical Stationary State, EJ
- 1947, Economic Progress in a Stable Environment, Economica

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