Arthur Cecil Pigou (November 18, 1877 – March 7, 1959) was an English economist, known for his work in many fields and particularly in welfare economics. He went to Harrow School and was a graduate of King's College, Cambridge, where he studied under Alfred Marshall, whom he later succeeded as professor of political economy. He served on a number of royal commissions including the 1919 commission on income tax. November 18 is the 322nd day of the year (323rd in leap years) in the Gregorian calendar. ... 1877 (MDCCCLXXVII) was a common year starting on Monday (see link for calendar). ... March 7 is the 66th day of the year in the Gregorian calendar (67th in leap years). ... Year 1959 (MCMLIX) was a common year starting on Thursday of the Gregorian calendar. ... Motto: (French for God and my right) Anthem: God Save the King/Queen Capital London (de facto) Largest city London Official language(s) English (de facto) Unification    - by Athelstan AD 927  Area    - Total 130,395 km² (1st in UK)   50,346 sq mi  Population    - 2006 est. ... Alan Greenspan, former chairman, United States Federal Reserve. ... Welfare economics is a branch of economics that uses microeconomic techniques to simultaneously determine the allocational efficiency of a macroeconomy and the income distribution associated with it. ... It has been suggested that Houses of Harrow School be merged into this article or section. ... Full name The King’s College of Our Lady and St Nicholas in Cambridge Motto Veritas Et Utilitas Truth and usefulness Named after Henry VI Previous names - Established 1441 Sister College(s) New College Provost Prof. ... Alfred Marshall Alfred Marshall (July 26, 1842–July 13, 1924), born in Bermondsey, London, England, became one of the most influential economists of his time. ... Political economy was the original term for the study of production, the acts of buying and selling, and their relationships to laws, customs and government. ... In states that are Commonwealth Realms a Royal Commission is a major government public inquiry into an issue. ... Year 1919 (MCMXIX) was a common year starting on Wednesday (link will display the full calendar). ... An income tax is a tax levied on the financial income of persons, corporations, or other legal entities. ...

Life and work

As the prize student and designated heir of Alfred Marshall, Arthur Cecil Pigou personified the "Cambridge Neoclassicals" - the heart of the Marshallian orthodoxy in the first third of the century. His main claim to fame is his Wealth and Welfare (1912, 1920), which brought welfare economics into the scope of economic analysis. In particular, Pigou is responsible for the famous distinction between private and social marginal products and costs and the idea that governments can, via a mixture of taxes and subsidies, correct such market failures - or "internalize the externalities". Pigovian taxes, taxes used to correct negative externalities, are named in his honor. Alfred Marshall Alfred Marshall (July 26, 1842–July 13, 1924), born in Bermondsey, London, England, became one of the most influential economists of his time. ... ... In economics, an externality is a cost or benefit from an economic transaction that parties external to the transaction bear. ... A Pigovian tax is a tax levied to correct the negative externalities of an activity. ... In economics, an externality is a cost or benefit from an economic transaction that parties external to the transaction bear. ...

But Pigou was not a lucky man. His approach came immediately under severe attack from Lionel Robbins and Frank Knight. The "New Welfare Economics" that arose in the late 1930s dispensed with much of Pigou's analytical toolbox altogether. Later on, the Public Choice theorists assaulted Pigou's approach for its naive "benevolent despot" assumption, and, finally, Ronald Coase demonstrated that efficient outcomes could be generated without government intervention when property rights are properly assigned. Coase presents his case in the article "The Problem of Social Cost" (1960 - see Coase Theorem), however the applicability is not universal. Lionel Charles Robbins, Baron Robbins (1898 - 1984) was a British economist of the 20th century who proposed one of the early contemporary definitions of economics, Economics is a science which studies human behavior as a relationship between ends and scarce means which have alternative uses. ... Frank Hyneman Knight (November 7, 1885 - April 15, 1972) was an important economist in the first half of the twentieth century. ... Public choice theory is a branch of economics that studies the decision-making behavior of voters, politicians and government officials from the perspective of economic theory. ... Enlightened absolutism (also known as benevolent or enlightened despotism) is a form of despotism in which rulers were influenced by the Enlightenment, a historical period. ... Ronald Coase (born December 29, 1910) is a British economist. ... This page deals with property as ownership rights. ... In law and economics, the Coase theorem, attributed to Ronald Coase, relates to the economic efficiency of a governments allocation of property rights. ...

The other source of bad luck was that Pigou was used by John Maynard Keynes as the "straight man". In the General Theory, Keynes held up Pigou's Theory of Unemployment (1933) as the example of everything that was wrong with Neoclassical macroeconomics. He never quite recovered from the shock of being betrayed by his old colleague and friend. The rest of Pigou's life was spent occasionally counterattacking (e.g. with the "Pigou Effect" ("The Classical Stationary State", 1943) or submitting to the "Keynesian Revolution". John Maynard Keynes (right) and Harry Dexter White at the Bretton Woods Conference John Maynard Keynes, 1st Baron Keynes, CB (pronounced canes, IPA ) (5 June 1883 – 21 April 1946) was a British economist whose ideas, called Keynesian economics, had a major impact on modern economic and political theory as well... General theory could refer to: Generalized Theory of Gravitation General Theory of Relativity General Systems Theory Generalized cohomology theory Keynes, John Maynard, General Theory of Employment, Interest and Money Category: ... Neoclassical economics refers to a general approach (a metatheory) to economics based on supply and demand which depends on individuals (or any economic agent) operating rationally, each seeking to maximize their individual utility or profit by making choices based on available information. ... The Pigou effect is an economics term that refers to the stimulation of output & employment caused by increasing consumption due to a rise in real balances of wealth, particularly during deflation Wealth was defined by Pigou as the sum of the money supply and government bonds divided by the price... Keynesian economics (pronounced ), also called Keynesianism, or Keynesian Theory, is an economic theory based on the ideas of 20th century British economist John Maynard Keynes. ...

Pigou was a Professor of Political Economy at Cambridge University from 1908 to 1943. The Professorship of Political Economy is a professorship at the University_of_Cambridge, founded in 1828. ... The University of Cambridge (usually abbreviated as Cantab. ...

Major publications

• Robert Browning as a Religious Teacher, 1901.
• Tariffs, 1903.
• "Monopoly and Consumers' Surplus", 1904, EJ.
• Industrial Peace, 1905.
• Import Duties, 1906.
• "Review of the Fifth Edition of Marshall's Principles of Economics", 1907, EJ.
• "Producers' and Consumers' Surplus", 1910, EJ.
• Wealth and Welfare, 1912.
• Unemployment, 1914.
• "The Value of Money", 1917, QJE.
• The Economics of Welfare, 1920.
• "Empty Economic Boxes: A reply", 1922, EJ.
• The Political Economy of War, 1922.
• "Exchange Value of Legal Tender Money", 1922, in: Essays in Applied Economics.
• Essays in Applied Economics, 1923.
• Industrial Fluctuations, 1927.
• "The Law of Diminishing and Increasing Cost", 1927, EJ.
• A Study in Public Finance, 1928.
• "An Analysis of Supply", 1928, EJ.
• The Theory of Unemployment, 1933.
• The Economics of Stationary States, 1935.
• "Mr. J.M. Keynes's General Theory", 1936, Economica.
• "Real and Money Wage Rates in Relation to Unemployment", 1937, EJ.
• "Money Wages in Relation to Unemployment", 1938, EJ.
• Employment and Equilibrium, 1941.
• "The Classical Stationary State", 1943, EJ.
• Lapses from Full Employment, 1944.
• "Economic Progress in a Stable Environment", 1947, Economica.
• The Veil of Money, 1949.
• Keynes's General Theory: A retrospective view, 1951.
• Essays in Economics, 1952.

See also

• Pigovian tax
• Pigou effect

A Pigovian tax is a tax levied to correct the negative externalities of an activity. ... The Pigou effect is an economics term that refers to the stimulation of output & employment caused by increasing consumption due to a rise in real balances of wealth, particularly during deflation Wealth was defined by Pigou as the sum of the money supply and government bonds divided by the price...

External links

Profile of Arthur Cecil Pigou at the History of Economic Thought website.