Alfred Marshall

After talking about the student, our focus is shift to his supervisor: Alfred Marshall. As once said by Sir Newton that his achievement was mostly due to his standing on the shoulder of the formers, to Keynes, Alfred is, to some extent, the shoulder provider.

Mr. Marshall was born in the suburb of London. Instead of burning buses to have fun like the guys in Paris, he studied with an appreciated assiduity, especially in math which prepared him for his later challenges. A series of steady pace lead him finally and reasonably to Cambridge (I wonder how the guys in Britain can enter Cambridge or Oxford so easy???)

Different from Keynes (even though being social could not certainly be Keynes’ initial choice), Alfred dedicated his life rather academic realm. He was professor all along his life with a great effort in establishing the world of economy by the stones of mathematics concretely. However, he himself didn’t quite agree on the absolute quantification of the subject to the public. What he preferred is an easy explanation with daily examples so that a prevalent or popular branch was thus able to serve the life.

Today, when we retrospect Alfred Marshall, his teaching or social contribution is hardly important than his theories and his books. A famous joke in economics is something like that: when you have just happened to have succeeded teaching a parrot to speak “demand” and “supply”, then congratulations for you have created a new economist! Indeed, the theory of supply and demand is sharply that fundamental to all the achievements based on it. Only this can already credit him as one of the most significant economist in the history, not mentioning the theory of marginal utility together with elasticity. Even today, they seem awesome to me that human behavior can be so perfectly concluded and articulated. His works “Principles of Economics” gave him his reputation at his time as well as today, even though it is not finished for the second volume. Our comment should not reside merely upon his academic brilliance since he was also a fruitful professor. Keynes and Pigou were two excellent representatives of the several but not massive instances.

But to him even those two earth quaking students are not his most successful one, you can never guess that the answer is his wife: Mary Paley Marshall, also an economist and co-author of Alfred's books.

John Maynard Keynes

I really want to add a subtitle: when a name became a theory. In fact, few people can afford this comment, especially when the entitled theory is frequently and decisively quoted or mentioned. Nevertheless, John Maynard Keynes is honorably one of them. So after introducing the father of microeconomics, we step today for father of macroeconomics.

Unlike Adam Smith, hero in my last blog, John was cultivated in a better earth. His father was an economics lecturer in Cambridge whereas his mother is author and a social reformist. His family is almost all brilliant in any criterion. From Eton to Cambridge, his education was as smooth as most successful men. Thanks to his talent that was shown in his early time, he was luckily admitted by Alfred Marshall whose shoulder provided him with an unbelievable high stage. Fame on head, he was appointed to the Royal Commission on Indian Currency and Finance. This period of experience helped him a lot in his accumulation of practical work.

He worked for the British finance department during the World War I, though his constructive advices in the post-war reparations were not adopted. From this point we can have a reasonable conceive that if the history is rewritten at that time, would we have avoided another disaster in 1940s? Mr. Keynes was so unhappy with the final decision that he quitted.

His golden time came with the arrival of the great depression of the world economic situation, most severe in the U.S... The story was like that: from October 1929, an endless nightmare started to swallow Uncle Sam. Within only a few weeks, some 250 billion dollars vanished together with the unemployment raised sky-high. The European banks were in the queue of breaking down and so were their counter part over Atlantic. It was at that time that people came to search for another solution instead of relying on the "invisible hand" to solve this fatal trouble. Therefore, Keynes and his theory were lit up as fundamental theory support of governmental intervenes.

Here it is highly necessary that we laid out some of his main thoughts. Keynes was often called as the father of macroeconomics since that derived mostly from his famous magnum opus "The General Theory of Employment, Interest, and Money". We can mainly and roughly conclude his idea by another controlling hand from the government which would use fiscal and monetary measures to aim to mitigate the adverse effects of economic phenomena.

Something interesting about him: first, he is a not only a great man in the world of economics but also in the real world: we rarely have an economist as tall as 198cm! Another is that there were a lot of objections towards him accusing him to turn this society of capitalism into communist one. Actually if without him, the latter would have dominated the world quite possibly.

Adam Smith

1776 is a rather special year, if we avoid using wired. When China started to take a bow in the stage that she had been leading for thousands of years, the western world was just equally experiencing a huge transformation. Here, I would not talk about the birth of a great county, neither the death of the discoverer of atom. In this year, we human turned our page of economics by celebrating the appearance of "An Inquiry into the Nature and Causes of the Wealth of Nations” or more popularly, "The Wealth of Nations" . The author, also hero of this debut of my blog, is the famous economist Adam SMITH! (Hurray!!!!!!!!!!)

Should we look into the biography of this giant in economics, we could surely find millions of notes in any search engine. In brief, he, a Scottish who had lost his father before his birth, received his junior education mostly in Scotland. Then, he spent 6 years in Oxford where he failed to find what could possibly interest him. Afterwards, he began delivering lectures and in 1751 he became chair of logic and chair of moral philosophy one year later which took quite a part of his passion and career. As time passed by, Adam suited himself more in economic issues. On returning from a long journey with his student (he was thus well-paid), he devoted 10 years to his magnum opus as mentioned above. As to his personality, he was a nice person or benevolent one not only because he dedicated a considerable part of he wealth to the charity organization but also he gained his fame in his time for a book called "The theory of moral sentiments", in which he differed himself from others on base of sympathy.

His works is more than fundamental to the whole economic world. He had, in his book, studied the form of price with a correlative regards to land, labor and capital. He proclaimed that the market, appearing to be in a chaos, was actually manipulated by an "invisible hand". Three key questions that direct the market: what to produce, how to produce and for whom to produce can be reasonably answered by his invisible hand! He also pointed out that the characteristic of the efficiency of market whereas the social economic benefits mainly due to the sum of the individual profit hunting.

Two anecdotes about him:

1， When he was at his early age, Adam was once kidnapped by a band of Gypsies. If it's not because of his brave uncle, he would have been struggling for living as a clown down the street!

2, Even though he was such a great man, he had no wife nor children.

To end my first blog, I would like my dear readers to share with me some quote from Adam Smith:

"

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual value of society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

"

Re-open!

Hi, guys, I hate moving since I am a sort of nostalgia. But anyway, we have to make it easier for my dear friends to read what I'd like to share.

Therefore, I reopen my blog here and with the same enthusiasm I shall work hard on it in the following months. Sincerely, I hope you, either my classmates or strangers passing by (no advertisement please!) can leave a word or two that can help me.

Here I write this especially for Bechir, my partner in the course, that you are more than welcomed to write your comments since I am such a freshman in the world of economics that errors are absolutely inevitable.

OK, here we go!