Macroeconomic Policy

Keynes expressed his regret in 1925 at ‘Marshall’s postponement of the publication of his Theory of Money until extreme old age, when time had deprived his ideas of freshness and his exposition of sting and strength. There is no part of Economics where Marshall’s originality and priority of thought are more marked than here, or where his superiority of insight and knowledge over his contemporaries was greater. There is hardly any leading feature in the modern Theory of Money which was not known to Marshall forty years ago.’1 Forty years: for it was in 1885, 1886, 1887 and 1887–8 respectively that Marshall made important public contributions to national debates on money and macroeconomics (at a time, it must be recorded, of considerable unemployment, depression and distress) by means of his paper to the Industrial Remuneration Conference, his evidence to the Royal Commission on Trade and Industry, his essay on ‘Remedies for Fluctuations of General Prices’ in The Contemporary Review and his testimony to the Gold and Silver Commission. Less than forty years: for the first (and, in the event, the only) volume of the Principles in the 1890 and in subsequent editions contained brief but tantalisingly stimulating suggestions such as led Wicksell among others to declare that ‘the second volume of Marshall’s Principles, in which he intends to publish a full discussion of monetary questions, will be awaited with the greatest interest’;2 since Marshall addressed these questions in some detail in his evidence to the Indian Currency Committee of 1899 (making in that way a significant early contribution to the application of macroeconomic theories to the problems of developing countries); and because Marshall was, of course, the author of Money Credit and Commerce (his only attempt at a complete synthesis of his thinking on the subject — and by 1923, in Keynes’ words, ‘nearly all his main ideas had found expression in the works of others’3).