English Unitarian minister, Dante scholar, early follower of Jevons, and propagator of the Marginalist Revolution.
Philip H. Wicksteed was born in Leeds, the son of a Unitarian minister. When Philip was ten, his family moved to a rural village in the Clwyd valley, near Bristol. In 1860, Wicksteed transferred to University College School in London, enrolling, a year later, in University College itself. After obtaining his B.A. from UCL in 1864, he went on to Manchester New College (London), receiving his MA in 1867.
In 1867, after finishing his studies in a competent, if not very distinguished, manner, Wicksteed joined the Unitarian ministry. He took up his duties at Taunton, a small town in western England (Somerset). In April, 1868, Philip Wicksteed married Emily Solly and, the next year, moved north, taking up duties as minister for the industrial parish of Dukinfield (near Manchester). By personal observation, and through his parishioners, Wicksteed was immediately impressed by the hardships and fortunes of the industrial revolution and began, perhaps for the first time, to take an interest in economic matters. Wicksteed encountered Auguste Comte's work around this time.
But it was Biblical history that grabbed his principal intellectual attentions. Wicksteed became enamored by the Dutch "Historical-Critical" school of Biblical studies, particularly the work of Abraham Kuenen. He learnt Dutch in order to translate Oort's and Hooykaas's Bible for Young People into English. In 1872, Wicksteed took the opportunity to spend a sojourn in the Netherlands, consulting with scholars of the Dutch school and attending lectures at the University of Leiden. He would repeat the pilgrimage in 1874. Through his numerous translations and elucidating articles, Wicksteed quickly became the spokesman and popularizer of the Dutch school in England.
In 1874, Wicksteed left Dukinfield and moved to London, where he became minister of the Little Portland Street Chapel in the west end, succeeding his formidable old professor, James Martineau. He would remain there for the next two decades.
Wicksteed forged his life-long connection to the Medieval Florentine poet, Dante Alighieri, some time in the late 1870s. It seemed a bit strange that the Dissenting preacher of an impatient west London congregation would take up this arcane topic, particularly given the association of Medievalism with nostalgic Neo-Catholicism and the "Oxford movement" fired up by John Henry Newman a few decades earlier. But that was precisely Wicksteed's point: Dante was not merely a relic of Medieval Catholicism, but a living, human prophet-poet that transcended barriers of religion and time. Without apology, Wicksteed delved into Dante. Wicksteed's Six Sermons on Dante (1879) kicked off the life-long affair.
In 1879, Wicksteed came across Henry George's tract, Progress and Poverty, whose powerful condemnation of inequality and calls for reform were spreading quickly through the industrialized world. Wicksteed sympathized immensely with its concerns, even if suspicious of George's simplistic analysis and solution. But he did not know enough economics to judge. For help, Wicksteed turned to the English Historicist, Arnold Toynbee, and prevailed upon the latter to explain George to him. But Toynbee's premature death in 1883 left Wicksteed without a mentor. To replace him, Wicksteed searched around some more -- and found William Stanley Jevons.
To our knowledge, Wicksteed and Jevons never met. Curiously, they followed the same academic path -- indeed they were contemporaries at UCL (although Jevons was nine years older). Both were deeply influenced by the same teachers along the way -- the logician Augustus de Morgan and the philosopher James Martineau. In the 1870s, both Wicksteed and Jevons were living in London, not too far from each other, and being both Unitarians, it is probable that they moved in the same circles. But if they met, no record of it remains. All that is known is that Wicksteed acquired a copy of Jevons's Theory of Political Economy in 1882 -- the very same year Jevons died -- and read it carefully. He was instantly converted to the Marginalist Revolution.
In 1883, a group of Unitarian students at Manchester New College approached Wicksteed and proposed the formation of study group to examine Henry George's doctrines. Wicksteed agreed, on the condition that they take the trouble of working through Jevons first. In 1884, Wicksteed's study group -- the "Economic Circle", as it was to become known -- transferred its meetings to the home of a Henry R. Beeton, a London stockbroker. Among those who joined the Circle were Henry S. Foxwell and Francis Ysidro Edgeworth, the two most prominent academic economists in London. It is rumored that Alfred Marshall also joined the circle, although, being out of town, his participation was probably minimal, at best. At any rate, in the hands of Wicksteed and Edgeworth, Henry George was soon set aside and the focus of the Circle's discussions swirled around Jevonian economics.
That same year, Wicksteed produced a review of yet another powerful book captivating the minds of young Londoners: Karl Marx's Das Kapital. While applauding Marx's historical and social analysis, Wicksteed condemned the labor theory of value as illogical and incoherent, propounding, in its stead, the Jevonian theory. The activist and playwright George Bernard Shaw took it upon himself to reply to Wicksteed -- not very successfully. Wicksteed's kind rejoinder was followed up by an invitation, and Shaw soon found himself in the Economic Circle, tutored in Jevonian economics by Wicksteed. Three of the "core" members of the Fabian Society -- G.B. Shaw, Sidney Webb and Graham Wallas -- were also members of Wicksteed's Economic Circle. It is partly due to Wicksteed's tireless efforts that the Fabians abandoned dogmatic Marxism (the theory of value in particular), and came up with their own "revisionist" version of it.
The Economic Circle met from 1884 to 1888. One of the outcomes of the discussion group was Wicksteed's Alphabet of Economic Science (1888), an attempt at an introductory-level exposition of Jevonian economics. It had all the virtues and faults of a self-educated economist. The Alphabet takes us through a tedious (if necessary) lesson in mathematics before getting to the economic meat. Precisely-drawn diagrams and practical, numerical examples -- perhaps too many -- are inserted to illustrate every point. There was little that is novel in it -- except perhaps for the first use of the term "marginal utility" in the English language (1888: p. 45) (Wieser used the term previously in German). But its value lies precisely in in the detailed care with which it was written. The Alphabet was really an introduction for the student who wishes to master the concepts, not so much for the impatient layman who merely wants to "get" the idea quickly, and so it was not as widely successful as Wicksteed had hoped.
In 1887, Wicksteed signed up as an University Extension lecturer, an activity which he would maintain tirelessly for much of the remainder of his life. Extension lectures were organized by the traditional universities (Cambridge, Oxford, London, etc.) to deliver academic fare to the general English public. The bulk of Wicksteed's lectures were on Dante, with occasional lectures of Wordsworth's poetry and Comte's sociology. Later on, and ever more frequently, Wicksteed dedicated lectures to economics (folksily titled, "Getting and Spending", "Making and Sharing"), channeling Jevonian economics with the same kind of real-life practical examples that he had employed in his Alphabet. Towards the end of his life, Wicksteed added the Greek tragedies to his repertoire. But Dante remained, throughout, the principal topic. As G.B. Shaw quipped, "Economics was his hobby; Dante was his job.".
Wicksteed had briefer, but also keen, interest in other literary figures. He never abandoned Wordsworth, the bard of his youth. Wicksteed took up an interest in the playwright Henrik Ibsen as a result of his yearly vacations to the Norwegian fjords (a custom he commenced in 1878). Perhaps a bit prematurely, Wicksteed sought to introduce the English public to Ibsen's work in a series of public lectures (1888). Also curious was Wicksteed's translation, largely for a lark, of the Medieval tale, Our Lady's Tumbler (1894). This turned out to be the most popular of his publications.
In 1894, Wicksteed returned to economics and produced his revolutionary treatise, An Essay on the Coordination of the Laws of Distribution (1894). In its precisely-argued, densely-written pages, Wicksteed revealed his Marginal Productivity Theory of Distribution, which was to become one of the cornerstones of Neoclassical economics. He would eventually have to share the laurels with other independent discovers -- John Bates Clark and Knut Wicksell, for instance.
All this had arisen in response to the Henry George movement. The Georgists drew on the Ricardian notion that land was the sole residual earner. Their indignation at inequality and poverty was channeled into a furor against landlords and their "unearned" rents. Georgist policy propositions invariably involved the seizure of rents and/or land. Some economists, such as Walker and Hobson, had already replied by insisting that land was not "special", that earnings on land were like earnings on any other factor. They had proposed that the Ricardian "law of rent" applied to all factors, and not merely land, e.g. reversing the Ricardian exercise, if we hold labor fixed and vary the quantity of land, then the quantity of land will be set where its earnings are equal to its marginal product -- and labor's wages can be deduced from the residual.
This intrigued Wicksteed whom, as we have already seen, was intensely (if critically) interested in the Henry George movement and articulated the same argument about the "non-specialness" of land in the 1894 Essay. But Wicksteed's main contribution to this generalization of the law of rent was to show that if every factor was paid its marginal product, we would find that there is no residual earner because the entire output will be exhausted. This "product-exhaustion" proposition is the essence of the Marginal Productivity Theory of Distribution. More succinctly, proposing a production function of the sort Y = f(K, L, T), where K is capital, L is labor and T is land (incidentally, Wicksteed may be properly credited for introducing the now common notion of the single-output, multiple-input "production function"). If the factors are paid their marginal products, the earnings of capital are fKK, those of labor fLL and those of land, fTT (where fi is the marginal product of the ith factor). Wicksteed's thesis was that, upon summation, we will find that Y = fKK + fLL + fTT, no more and no less.
Wicksteed was bedazzled by his own result and proclaimed that it applied universally:
"Our law then may be regarded as perfectly general....In this form, it is not a theory of distribution, but an analytical and synthetical law of composition and resolution of industrial factors and products, which would hold equally in Robinson Crusoe's island, an American religious commune, in an Indian village ruled by custom, and in competitive centres of the typical modern industries." (P.H. Wicksteed, 1894: p.42).
But other economists begged to differ. Pareto and Edgeworth, for instance, pointed out that the product exhaustion thesis only applied if the production function (f(,)) was linearly homogeneous, i.e. had constant returns to scale throughout. Yet, in economic systems with some degree of monopoly or indivisibilities in production, we would have differing returns to scale. Wicksteed was aware of this, but came up with a rather contrived "change-of-variables" argument to show that any production system can be "made" linearly homogeneous, i.e. that if we consider every type of every factor as "unique" then "on this understanding it is of course obvious that a proportional increase in all factors of production will secure a proportional increase in output" (Wicksteed, 1894: p.33). His critics didn't let this legerdemain pass and Wicksteed withdrew the claim in his later statements of the theory. It was left for Walras and Wicksell to point out that perfect competition was a sufficient condition for constant returns to scale, something that had not quite occurred to Wicksteed.
On an additional note, Wicksteed achieved his result by detailed mathematical arguments and demonstrations. A.W. Flux, in reviewing Wicksteed's Essay (for the Economic Journal, 1894), pointed out that Wicksteed's efforts would have been much less painful if he realized that he was just "rediscovering" a standard mathematical result known as Euler's Theorem, i.e. that any linear homogeneous function can be expressed as the summation of its arguments multiplied by their first derivatives.
Although Wicksteed's Essay served as a "counterblast" to Georgist analysis, his sympathy for its reformist message continued and he became increasingly active in social reform movements. He was particularly keen on finding their points of contact with theology. In the 1890s, Wicksteed was invited to join a group of like-minded, middle class "liberal-modernist" Unitarians, and served as the warden of University Hall, their chief meeting place, during its short existence. In 1892, Wicksteed decided to reach out more directly to the working classes and helped start the "Labour Church" movement, but that failed too. Later, his efforts became more disparate. Domestically, he attached himself closely to the anti-vivisection movement and a host of other petty causes. He was particularly vocal on foreign issues that tended to be overlooked, e.g. raising awareness of Armenian and Greek victims of Ottoman massacres and the British-run opium trade in China. Most notably, perhaps because of his Dutch connection, Wicksteed spoke up for the Boers in the early days of their uprising and, defying the jingoism of his day, was a loud and consistent critic of the Anglo-Boer War.
In 1897, nostalgic for country life, Wicksteed and his family moved out of London and settled in the rustic village of Childrey (in Berkshire, west of London). Although no longer an active minister, Wicksteed continue to criss-cross England as an Extension lecturer and remained semi-involved in several activist causes.
In the late 1890s, Wicksteed laid economics aside and returned to Dante. Wicksteed's fascination with the poet had increased after a pilgrimage to Dante's hometown of Florence in 1895. Now, in the comfort of the Berkshire countryside, Wicksteed went through the labors of translating and annotating Dante's De Monarchia (1896), correspondence (1898), the Divine Comedy (1899-1901), Convivio (1903), Eclogues (1904), Canzionere (1906), etc. This period of Dante activity was crowned by his superb address, The Religion of Time and the Religion of Eternity (1899), summarizing Dante's significance for the modern world.
After this Dante phase, Wicksteed returned to economics, setting himself to writing a more comprehensive thesis. The outcome was the massive Common Sense of Political Economy (1910). This treatise was faithfully of the Jevonian school, although with some ingredients were drawn from the Lausanne economics of Vilfredo Pareto, with which he had recently become acquainted (see Wicksteed's 1906 review of Pareto). Wicksteed's Common Sense was intended as a textbook, to compete head-on with Alfred Marshall's Principles and dislodge the Marshallian orthodoxy -- that "school of apologists", as Wicksteed (1905) called them -- which had since, the 1890s, acquired a near-monopoly over English economics.
After the introductory chapter, the Common Sense leaps into a discussion of individual choice (Chapter II). Wicksteed drops the utility function in favor of "relative scale of preference" (a concept borrowed from Pareto) and uses it to illustrate "diminishing psychic returns" and how they guide household choice. Happily, there is no cumbersome "mathematical chapter" that needs to be read first. But it is written in the same systematic and precise (if plodding) care as his previous works (the detailed numerical examples get so involved that Wicksteed helpfully provides fold-outs to see them clearly). In Chapter III, Wicksteed tries to anticipate practically all possible objections and exceptions to this theory.
In standard Jevonian sequence, Wicksteed proceeds to discuss exchange between trading bodies in Chapter IV -- alas, here, where detailed examples are perhaps most needed, they are largely missing. Production is unveiled as merely indirect exchange and money as "exchange at two removes". Objections and exceptions are, once again, noted and anticipated.
In Chapter V, Wickseed steps back to reflect on "scope" of the theory of exchange in modern society. It is commonly assumed that this chapter derives from Wicksteed's early interest in Comte, but Pareto's influence is perhaps even more evident. The object is not to extend, but rather to limit, the applicability of the theory. He plunges into an interesting discussion of "economic motive", arguing that rarely, if ever, can any person's actions be reduced to it. It is merely one motive among many. But whenever people enter into "economic relations" (for whatever motivation), this is where the laws of economics are applicable. In short, economics deals with a facet of behavior in the social context of an economic relation, not a type of behavior which may be exhibited in isolation or in other social contexts.
In the next three chapters (VI, VII and VIII), Wicksteed proceeds to survey the nuts and bolts of "markets", the "machinery" by which exchange equilibrium is established. Following up on the previous chapter, he is careful not to fetishize it. The market is not some evanescent harmonious being doing great good (or great harm, for that matter) on its own. It is an "ethically-indifferent instrument" (p.184), that is all. It is merely "the machinery by which those on whose scale of preference any commodity is relatively high are brought into communication with those on whose scales it is relative low, in order that exchanges may take place to mutual satisfaction until equilibrium is established" (Wicksteed, 1910: p.236).
In these chapters, prices are not merely incidental rates of exchange, but given an institutional life of their own -- prices "on the market". It is the closest thing to demand-and-supply theory Wicksteed dares essay, but the concept is deliberately eschewed. He remains consistently Jevonian, always operating with two trading bodies for every pair of goods, emphasizing that there are demanders on both sides of the market. There is also no magical auctioneer "adjusting prices" in the background either. Exactly how an equilibrium is established depends on the particular institutional structure of that particular market. Wicksteed feels it necessary to survey different types of markets (e.g. futures, stock markets, auctions, oriental bazaars, markets for raw materials) and touches on all sorts of institutional features which affect how they operate (competition, speculation, sticky prices, dumping, monopolies, etc.). Interestingly, Wicksteed refers not to "wrong prices", but rather to "wrong estimates of prices" by the participants, as the principle driver of adjustments -- the sort of mechanism made popular in the non-tatonnement literature of the 1960s (e.g. Hahn, Negishi, Uzawa).
Still in the context of the market surveys, Chapter VII is notable for adopting Jevons's conception of time and analyzing interest in the context of markets for "anticipations of wealth". Chapter VIII focuses on the "market for services" (i.e. labor), particularly emphasizing how wages depend ultimately on the scarcity of consumer goods (the imputation theorem). He takes a few asides to pursue the ethical and political implications of this.
In Chapter IX, Wicksteed restates his celebrated theory of distribution. Production theory is covered in detail first, more so than in the 1894 Essay and it is evident that he adapts much from Pareto here. The Jevonian precepts on production are dropped as Wicksteed embraces the Paretian notion of a price-taking entrepreneur making decisions about factor combinations (p.362)
This completes Book I, the "systematic" part of the Common Sense. Book II - which he calls "excursive and critical" - is reserved for that long-dreaded lesson in the mathematics of curve-fitting and diminishing slopes. In Ch.3 he reiterates the subjective nature of utility curves - or as he now prefers to call it, "total satisfaction", and provides a cautious, if awkward, explanation on the use of community utility curves ("not susceptible of psychic interpretation...though they rest on a psychic basis", p.489). Ch.4 sets out his demonstration of supply as inverse demand, deriding the Marshallian scissors as "illusory". Ch.6 on diminshing and increasing returns contains his all-out assault on the upward-sloping supply curve. Ch.7 on rent attacks the residual theory, showing rent is not special - "everything we read in economics books as to the pure theory of distribution, whether it refers to wages, interest, rent or profit, is either false when asserted of the category under discussion, or else true of all the others as well" (p.574). Bk II ends with Ch.6 on banking and currrency.
Book III of the Common Sense - what he calls "analytical and practical" - is the applied economics chapters. There's only a couple of chapters here - covering a variety of Wicksteed's favorite topics. Gambling and insurance, housing (identifying it as part of the general poverty problem, and warning of the dangers of excessive housing codes), unemployment (dependent on product demand, relieved by labor mobility and aggravated by minimum wage legislation), commercial crisis (brought about by general optimistic expectations, not quite "overproduction" is merely lack of business confidence, encourages government public works), tariff reform (dismisses protectionism as merely driven by nationalism rather than economic sense), impact of charity (example of Indian famine relief), measures of national income and inequality.
(to be completed)
Major Works of Philip H. Wicksteed
Resources on Philip H. Wicksteed
All rights reserved, Gonšalo L. Fonseca