ABSTRACT
Alfred Marshall ranks so high among the greatest figures in Anglo-Saxon economics that it is still almost presumptuous to praise his accomplishments, and indeed there is little need for doing so. This chapter discusses that Marshall's analysis of the nature of capital is peculiarly illustrative of the characteristics of his approach and summarizes criticism, and the general theory of production and distribution. The proof that real costs and money costs are proportional requires much more than the constancy of money income in terms of effort. Marshall's discussion portrays, first of all, the usual careless confusion of incremental and proportional diminishing returns. If Marshall's treatment of external economies be judged ambiguous, certainly the same criticism is appropriate to his treatment of internal economies. The chapter discusses certain aspects of the theory of labor, and the theory of capital. The classical theory of rent receives considerable revision in Marshall's hands.
