Degeneration in the Marshallian Research Programme

Since first examining the nature of the Marshallian research programme and suggesting some inherent factors which could ultimately lead to its collapse, in Chapter 5, subsequent chapters have followed the development of Cambridge macroeconomic analysis up until the late 1920s. What this development shows is an increasing, but implicit, rejection of the basis of the Marshallian microeconomic schema (the substantively rational part of the programme). As suggested in Chapter 5, it is to be expected that this should have exacerbated the problems of inconsistency within the overall Marshallian research programme. In reviewing Robertson’s Banking Policy and the Price Level (1926) it has just been shown that when Harrod suggested dropping the concept of justifiable fluctuations Tappan’s defence was to explicitly link this part of Robertson’s theory to the Marshallian marginal analysis. In this sense, as well as in retrospect, Banking took explicitly Marshallian macroeconomic analysis about as far as it could go. If the theory was to make further substantial steps forward, some elements of the Marshallian system had to be abandoned. Of course the Cambridge Tradition did not suddenly end with a blinding flash in the Keynesian revolution, nor was the period from the late 1920s solely concerned with the transition directly to the General Theory.