Great Thinkers in Economics Series Series Editor: A.P. Thirlwall is Professor of Applied Economics, University of Kent, UK. Great Thinkers in Economics is designed to illuminate the economics of some of the great historical and contemporary economists by exploring the interactions between their lives and work, and the events surrounding them. The books are brief and written in a style that makes them not only of interest to professional economists, but also intelligible for students of economics and the interested lay person. Forthcoming titles: David Cowan FRANK H. KNIGHT James Forder MILTON FRIEDMAN Alan Kirman VILFREDO PARETO Peter Boettke F.A. HAYEK Esteban Perez ROY HARROD Titles include: Nahid Aslanbeigui and Guy Oakes ARTHUR CECIL PIGOU David Reisman JAMES BUCHANAN Robert Scott KENNETH BOULDING Robert Dimand JAMES TOBIN Peter E. Earl and Bruce Littleboy G.L.S. SHACKLE Barbara Ingham and Paul Mosley SIR ARTHUR LEWIS John E. King DAVID RICARDO Esben Sloth Anderson JOSEPH A. 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Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke, Hampshire RG21 6XS, England Arthur Cecil Pigou Nahid Aslanbeigui Department of Economics, Finance, and Real Estate, Monmouth University, New Jersey, USA and Guy Oakes Leon Hess Business School, Monmouth University, New Jersey, USA © Nahid Aslanbeigui and Guy Oakes 2015 Softcover reprint of the hardcover 1st edition 2015 978-0-230-25271-4 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2015 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-1-349-55380-8 ISBN 978-1-137-31450-5 (eBook) DOI 10.1057/9781137314505 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress. In memory of Kobra and Hadjar, feminists ahead of their time Contents Acknowledgements viii List of Abbreviations x 1 Pigou in the Foreground 1 2 ‘The Most Brilliant Young Man I Know’ 13 3 Developing A Frameworkk 42 4 The Theory of Policy Analysis 97 5 T he Cost Controversies 136 6 The Robbins Critique 175 7 Confrontations with Keynes 193 8 Legacy: Demythologizing a Cambridge Eccentric 242 Bibliographyy 274 Index 297 vii Acknowledgements Our warmest thanks to our editor, Tony Thirlwall, who read the entire draft and wrote abundant notes that improved the quality of the manu- script. We are also grateful to David Collard, who read a long chapter and offered helpful suggestions. Thanks also to participants of three conferences: the International Workshop on Welfare Economics and the Welfare State, Historical Re-Examination, Sano-Shoin, Hitotsubashi University, Tokyo, in March 2013; the mini-conference on A.C. Pigou, Robinson College, Cambridge University, in November 2013; and the HOPE Conference on Market Failures, Duke University, in April 2014. We are indebted to Professor Ryo Hongo for his generosity in sharing some of Pigou’s work to which we lacked access. In compiling our bibli- ography of Pigou’s work, we benefited from Professor Hongo’s own bibliography, which he has made available online. Thanks to Philip Noel-Baker and David Gaunt for valuable conversations. For permission to quote unpublished copyrighted material, we acknowledge the following: Ms Emily Boyle for permission to publish from the papers of C. Ryle Fay; the Syndics of Cambridge University Library for permission to publish from the minutes of meetings of the Faculty Board of Economics and Politics; the Provost and Scholars of King’s College Cambridge for permission to publish from the papers of John Maynard Keynes; the British Library of Political and Economic Science for permission to publish from the papers of Lionel Robbins; the Master and Fellows of Magdalene College for permission to publish from the Arthur Benson diaries; and Mr Philip Noel-Baker for permis- sion to publish from the papers of Baron Philip Noel-Baker. We thank the Cambridge Central Library for permission to reproduce the photo- graph of Pigou from the Cambridgeshire Collection. Peter Groenewegen, Michael McLure, Doug Munro, Peter Ludlow, and Hugh Gault were generous in helping us locate copyright holders of some private papers. For archival assistance, we are grateful to the archivists and librarians of Churchill College, King’s College, the Marshall Library of Economics, Magdalene College, and the University Library at Cambridge University; the British Library; Harrow School Archive; the University of Sheffield; and the British Library of Political and Economic Science (LSE). We are especially indebted to archivists at King’s College, Cambridge – Jacky Cox viii Acknowledgements ix and Patricia McGuire – for their help in deciphering Pigou’s challenging handwriting. We thank the Journal of the History of Economic Thoughtt for permission to reproduce passages from ‘Keynes as Editor: T he Economic Journal, the Keynesian Revolution, and the Pigou Affair, 1936–1938’; Œconomia – History/Methodology/Philosophyy for permission to reproduce sections from ‘On Pigou’s Theory of Economic Policy Analysis’; and History of Political Economyy for permission to draw on ‘The British Tariff Reform Controversy and the Genesis of Pigou’s Wealth and Welfare, 1903–1912.’ For editorial assistance, we thank Linda Fette Knox and Christopher Liljestrand. Our special thanks go to Robert S. Berardo for research assistance. Research on this book was supported by a sabbatical grant, Grants-in- Aid-for Creativity, Jack T. Kvernland Chair, and the Leon Hess Business School Business Council, Monmouth University. We gratefully acknowl- edge a Franklin Research Grant awarded by the American Philosophical Society and a visiting fellowship at Clare Hall College, Cambridge.