Marshall, Alfred (1842-1924), was a British educator and the most influential economist of his day. He combined two different theories about what determines the value or price of a good. The “classical” theorists of the 1700’s and 1800’s had said price was determined mainly by supply factors, such as the cost of producing the good. But the “neoclassical” theorists of the late 1800’s had stressed demand factors, such as the utility (usefulness) of the good for consumers. In Principles of Economics (1890), Marshall said that all of these factors helped determine price. Marshall’s supply and demand model became a standard tool for representing and analyzing markets.
Marshall also believed that a self-regulating economy, free of major government interference and based on free competition and private enterprise, would lead to better social conditions, a fair distribution of income, and full employment. Marshall’s emphasis on consumer welfare led to the development of welfare economics. This branch of economics judges economic systems according to how well they contribute to consumer satisfaction and human well-being.
Marshall was born on July 26, 1842, in London. He taught economics at Oxford and Cambridge universities. He died on July 17, 1924.
