Hegel’s influence on the young Alfred Marshall: Realising the self through institutions of economic liberalism

Dr Miriam Bankovsky (La Trobe University)

Alfred Marshall is often designated as a key forerunner to neoclassical economics. His 1890 Principles of Economics was not only used as an orthodox undergraduate textbook in British sandstone universities until the 1960s, it has also been claimed by Chicago School economists Milton Friedman and Gary Becker as the key formative influence in the development of the supply-demand “revealed preference” theory that underpins orthodox price theory. However, the reduction of Marshall’s work to a neoclassical conception of the individual as a rational utility maximiser overlooks the social philosophy that underlies Marshall’s economics, which is instead oriented towards an ethics of “self-realisation” and self-reliance, in the form of a normative “standard of life” (an index of human capacity or “higher faculties”). In contrast to the neoclassical misrepresentation of Marshallian economics, this paper draws attention to the pervasive impact of Hegel on British 19th century economists, and details the influence of Hegel’s Philosophy of History on the younger Marshall’s History of Civilisation, which reveals a social philosophy of self-realisation through modern institutions that also informs Marshall’s later Principles. The paper features the influence of two Hegelian ideas, namely, historical progress as the gradual institutionalisation of the consciousness of freedom, and the perfectible march of history from East to West, ideas that permit Marshall to argue that modern institutions of economic liberalism are ethical because they not only promote self-reliance (equivalent to Hegel’s subjective freedom) but also an orientation towards the generalgood (equivalent to Hegel’s objective freedom). However, the ethical concern for universal self-realisation in Marshall is also shown to inherit an ideological and unsavoury defence (mirroring Hegel’s own views) of the Victorian family’s role in supporting liberal economic institutions. Marshall’s neo-Hegelian ethics of self-realisation is thus shown to exemplify both the promise and dangers involved in the attempt to ascribe ethical objectives to economics.

Miriam Bankovsky is a Senior Lecturer and Australian Research Council DECRA fellow in Politics at La Trobe University. Reflecting a sustained interest in socio-economic justice, her research crosses three disciplines (philosophy, politics and economics), and two philosophical sub-disciplines (continental and analytic). After initially focusing on analytic and continental conceptions of justice in a broadly Kantian tradition, Miriam's current project extends this plural approach into economics, challenging the orthodox conception of well-being as the satisfaction of rational preferences, and instead exploring alternative non-utilitarian and recognitive accounts of interpersonal well-being. Bookended by the work of Marshall and Becker, she is now working on a critical account of the way in which orthodox economics makes sense of “ethical” other-regarding preferences in the family.