This chapter discusses the method of Marshall. Marshall knew that static method (hitherto the only method of economic theory) led, when carried right through, to the stationary state, and no further. The theory of a stationary state seemed to him to be of little interest; if it was worthwhile to elaborate it at all, that was chiefly in order that it should not be mistaken for something else. What then was to be done? There was, he thought, no alternative to statics. If a complete static theory led nowhere, we must make do with an incomplete static theory. That, in short, is the method of Marshall. There is no question that it is a powerful method; for many problems of economics it is as good a method as we are likely to get. It is not at all a dynamic method; it is a resuscitation of statics. It was a special method which would only work in special cases. It would only work so long as the things that had been put into the ‘pound’ would stay there.
Keywords: Marshall; economic theory; static method; incomplete static theory
Chapter. 3573 words.
Subjects: Macroeconomics and Monetary Economics
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