Profile Major Works Resources

Arthur Cecil Pigou, 1877-1959.

Photo of A.C.Pigou

Cambridge Neoclassical economist.

The son of an army officer, Arthur Cecil Pigou was educated at Harrow and, from 1896, King's College, Cambridge.  Starting off reading history,  Pigou studied economics under Alfred Marshall as part of the Moral Science Tripos, quickly becoming a prize pupil.  Through Marshall's efforts, Pigou began lecturing in economics himself in 1901, became a fellow of King's in 1902 and won the coveted Adam Smith Prize in 1903.  

Arthur C. Pigou made his name in 1903, when he leaped headlong into the famous Tariff Reform debate raging in Britain.  Pigou deployed his pen and theoretical skills to countering the popular proposal to abandon free trade and embrace the 'imperial preference' system which would turn the British Empire into a protectionist trade bloc.  Marshall, the inherent academic, had long frowned on delving into the muck of public policy, but Pigou embraced it with vigor.   Indeed, in this and his subsequent works (1905, 1906, 1912), one can properly credit Pigou for launching the 'policy arm' of Cambridge Neoclassicism, turning its theoretical musings into a public science of practical policy relevance, reminiscent of the role played by Classical economists earlier in the century.

In 1908, Pigou succeeded Marshall as Professor of Political Economy at Cambridge, in a famous controversy.  The chair had long been promised to former Marshall pupil Herbert S. Foxwell, who had reluctantly accepted the chair at UCL back in 1881, on the promise that he would return to succeed Marshall at Cambridge.  But by 1908, Marshall's preferences had changed and he secured Pigou's appointment to the chair, creating much bitterness with Foxwell.  To this injury was added insult in 1916, when Pigou petitioned for exemption from military service in World War I, on account that there was "no one" at Cambridge able to replace him (Foxwell was still lecturing there). 

Holding the Cambridge professorship from 1908 to 1943, 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, revised 1920 as Economics of Welfare). Here, Pigou brought social welfare into the scope of economic analysis.   In particular, 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's luck soon ran out.  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 the irrelevance of Pigouvian taxes when property rights are properly assigned. 

Another source of bad luck was John Maynard Keynes decision to use Pigou as the "straight man" in his polemics.  In the 1936 General Theory, Keynes held up Pigou's Theory of Unemployment (1933) as the example of everything that was wrong with Neoclassical macroeconomics.  Pigou 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.



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Major Works of Arthur C. Pigou

  • Robert Browning as a Religious Teacher, 1901. [bk, av]
  • "Some Aspects of the Problem of Charity", 1901, The Heart of the Empire  p.236
  • "A Parallel between Economic and Political Theory", 1902, EJ
  • "A Point of Theory connected with the Corn Tax", 1902, EJ
  • The Riddle of the Tariff, 1903. [bk, av] [McM pdf]
  • "Is an Economics Tripos Necessary?", 1903, Cambridge Rev, p.346 (reply to p.330)
  • "Some Remarks on Utility", 1903, EJ
  • "Pure Theory and the Fiscal Controversy", 1904, EJ
  • "Monopoly and Consumers' Surplus", 1904, EJ
  • "The Known and the Unknown in Mr. Chamberlain's Policy", 1904, Fortnightly Review, p.36
  • "Mr. Chamberlain's Proposals", 1904, The Edinburgh Review (v.200, Oct), p.449
  • Principles and Methods of Industrial Peace, 1905. [bk, av]
  • "Professor Dietzel on Dumping and Retaliation", 1905, EJ
  • "The Optimism of Browning and Meredith", 1905, Independent Review, p.92
  • "Protection and the Working Classes", 1906, The Edinburgh Review (v.203, Jan), p.1
  • "The Unity of Political and Economic Science", 1906, EJ
  • Protective and Preferential Import Duties, 1906. [bk, av]
  • "The Incidence of Import Duties", 1907, EJ
  • "Social Improvement in the Light of Modern Biology", 1907, EJ
  • "The Ethics of the Gospels", 1907,  Intl J of Ethics (Apr)  p.275 [av]
  • "Some points of ethical controversy", 1907, Intl J of Ethics (Oct), p.99 [av]
  • "Review of the Fifth Edition of Marshall's Principles of Economics", 1907, EJ  [McM]
  • "The Ethics of Nietzsche", 1908, Int J of Ethics, p.343 [av]
  • "Equilibrium under Bilateral Monopoly", 1908, EJ
  • The Problem of Theism, and other essays, 1908 [bk, av]
  • Economic Science in Relation to Practice: inaugural lecture 30 Oct 1908, 1908 [bk]
  • The Policy of Land Taxation, 1909 [bk]
  • "Producers' and Consumers' Surplus", 1910, EJ.
  • "A Method of Determining the Numerical Value of Elasticities of Demand", 1910, EJ
  • "The Problem of Involuntary Idleness", 1911, Compte-rendu de la conférence internationale du chomage
  • Wealth and Welfare, 1912. [bk, av]
  • "The Interdependence of Different Sources of Demand and Supply in a Market", 1913, EJ
  • "Railway Rates and Joint Cost", Pts I & II, 1913, QJE
  • "A Minimum Wage for Agriculture", 1913, Nineteenth Century (Dec), p.1167 [repr in 1923 EAE, av]
  • Unemployment, 1913. [av]
  • "The Vagaries of Recent Political Economy - Reply and Rejoinder", 1914, Quarterly Review (Jan), p.174 (reply to Nicholson, 1913: p.406)
  • Lectures on Housing, with B.S. Roundtree, 1914 [av] [repr in 1923 EAE av]
  • "Sources and Methods of Paying for the War", 1915, Contemporary Review (Dec), p.706
  • "The Disorganisation of Industry, Commerce and Finance: the problems to be faced" 1916, Reorganization of Industry, p.4 [av]
  • "Interest after the War and the Export of Capital", 1916, EJ
  • "Labour Problems after the War", 1916, Contemporary Review (Sep), p.334
  • The Economy and Finance of the War, being a discussion of the real costs of the war and the way in which they should be met, 1916 [av]
  • "The Economics of the War Loan", 1916, EJ
  • "Inflation", 1917, EJ
  • "The Value of Money", 1917, QJE. [av]
  • "A Plea for Higher Income Tax" 1918, Contemporary Review (Jan), p.35
  • "The Control of Prices during the War", 1918, Contemporary Review (Aug), p.164
  • "The Burden of War and Future Generations", 1919, QJE [av]
  • "The Problem of the National Debt", 1919, Contemporary Review (Dec)
  • "The Problem of the Currency", 1920, Contemporary Review (Feb), p.169
  • A Capital Levy and a Levy on War Wealth, 1920 [av]
  • "Co-operative Societies and Income Tax", 1920, EJ [repr in 1923 EAE av]
  • "Report of the Royal Commission on the British Income Tax", 1920, QJE (Aug) [repr in 1923 EAE av]
  • The Economics of Welfare, 1920. [av], [Lib, av]
  • The Political Economy of War, 1921 [av]
  • "Unemployment" 1921, Contemporary Review (Dec), p.737 [repr in 1923 EAE, av]
  • "Empty Economic Boxes: A reply", 1922, EJ.
  • "The Private Use of Money", 1922, Contemporary Review (Apr) [repr in 1923 EAE av]
  • "Long and Short Hirings", 1922  Contemporary Review (Sep) [repr in 1923 EAE, av]
  • "Trade Boards and the Cave Committee", 1922, EJ (Sep) [repr in 1923 EAE av]
  • "The Foreign Exchanges", 1922, QJE (Nov) [av] [repr in 1923 EAE av]
  • "The Real Ratio of International Interchange", 1922, in J.M. Keynes, editor, Manchester Guardian Supplement - Reconstruction in Europe (Dec) [repr in 1923 EAE av]
  • ""Prices and Wages from 1896-1914", 1923, EJ (Jun) [repr in 1923 EAE av]
  • "Eugenics and Some Wage Problems", 1923, Eugenics Review (Apr) [repr in 1923 EAE av] [nih]
  • "Exchange Value of Legal Tender Money", 1923, Essays in Applied Economics, p.175 [av] (expanded version of 1917 QJE)
  • Essays in Applied Economics, 1923. [av]
  • "Poetry and Philosophy", 1924, Contemporary Review (Jun), p.735
  • (Editor) Memorials of Alfred Marshall, 1925
  • "Prof. Edgeworth's Collected Papers", 1925, EJ
  • "Problems of Compensation", 1925, EJ
  • "A Contribution to the Theory of Credit", 1926, EJ
  • Industrial Fluctuations, 1927.  [1929 2nd ed]
  • "The Law of Diminishing and Increasing Cost", 1927, EJ.
  • "Wage Policy and Unempoyment", 1927, EJ
  • A Study in Public Finance, 1928 [av txt]
  • "An Analysis of Supply", 1928, EJ.
  • The Functions of Economic Anaysis, 1929
  • "Disturbances of Equilibrium in International Trade", 1929, EJ
  • "Review of Hawtrey's Monetary Theory of the Trade Cycle", 1929, EJ
  • "The Statistical Derivation of Demand Curves", 1930, EJ
  • "Review of Keynes's Treatise on Money", 1931, Nation & Athenaeum
  • "The Effect of Reparations on the Ratio of International Interchange", 1932, EJ
  • The Theory of Unemployment, 1933.
  • "A Note on Imperfect Competition", 1933, EJ
  • "A Note on Mr. Hicks' Distribution Formula", 1933, Economica
  • "The Elasticity of Substitution", 1934, EJ
  • Economics in Practice: six lectures on current issues, 1935
  • The Economics of Stationary States, 1935.
  • "Net income and capital depletion", 1935, EJ
  • The Economic Position of Great Britain, with Colin Clark, 1936
  • "Mr. J.M. Keynes's General Theory of Employment, Interest and Money", 1936, Economica
  • "Real and Money Wage Rates in Relation to Unemployment", 1937, EJ.
  • "money Wages in Relation to Unemployment, 1938, EJ
  • Employment and Equilibrium: A theoretical discussion, 1941
  • "The Classical Stationary State", 1943, EJ.
  • Lapses from Full Employment, 1944.
  • Income: An introduction to economics, 1946 [av]
  • "Economic Progress in a Stable Environment", 1947, Economica
  • The Veil of Money, 1949.
  • Keynes's General Theory: A retrospective view, 1951. [av]
  • "Some Aspects of Welfare Economics", 1951, AER
  • "Real Income and Economic Welfare", 1951, Oxford EP
  • Essays in Economics, 1952.
  • "The Transfer Problem and Transfer Costs", 1952, EJ
  • Alfred Marshall and Current Thought, 1953
  • "Long Run Adjustments in the Balance of Trade", 1953, Economica
  • "Cost and Output", 1954, EJ
  • Income Revisited, being a sequel to income, 1955




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Resources on A.C. Pigou

  • "Review of Pigou's Industrial Peace" by C.J. Hamilton, 1906, IJEthics, p.247
  • "Review of Pigou's Wealth and Welfare", by J. Maurice Clark, 1913, AER
  • "Review of Pigou's Unemployment" by W. M. Leiserson 1914, AER
  • "Arthur Cecil Pigou" by H.G. Johnson, 1960, Canadian JE
  • A.C. Pigou bibliography by Ryo Hongo
  • "The Economic Consequences of the Klassical Caricature" by Robert Leeson, 1998 [pdf]
  • "An Economist's Invisible Hand" by John Casidy, 2009, WSJ [article]
  • "Much ado about Pigou", by Bruce Yandle, 2010, Cato J [pdf]
  • "The Coase Theorem and Arthur Cecil Pigou", by Herbert Hovenkamp, 2009, Arizona Law Rev [pdf]
  • Pigou entry in Concise Encycl of Economics, LibertyFund
  • Pigou entry in Britannica
  • Pigou article at Alternatives Economiques, 2005
  • Arthur Cecil Pigou by Nahid Aslanbeigui and Guy Oakes 2015 [preview]
  • Wikipedia


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