The Economics of Welfare occupies a privileged position in economics. It contributed to the professionalization of economics, a goal aggressively and effectively pursued by Pigou's predecessor and teacher Alfred Marshall. The Economics of Welfare also may be credited with establishing welfare economics, by systematically analyzing market departures and their potential remedies. In writing The Economics of Welfare, Pigou built a bridge between the old and the new economics at Cambridge and in Britain. Much of the book remains relevant for contemporary economics. The list of his analyses that continues to play an important role in economics is impressive. Some of the more important include: public goods and externalities, welfare criteria, index number problems, price discrimination, the theory of the firm, the structure of relief programs for the poor, and public finance. Pigou's discussion of the institutional structure governing labor-market operations in his Wealth and Welfare prompted Schumpeter to call the work "the greatest venture in labor economics ever undertaken by a man who was primarily a theorist."

The Economics of Welfare established welfare economics as a field of study. The first part analyzes the relationship between the national dividend and economic and total welfare. Parts II and III link the size of the dividend to the allocation of resources in the economy and the institutional structure governing labor-market operations. Part IV explores the relationship between the national dividend and its distribution.

In her new introduction, Nahid Aslanbeigui discusses the life of Pigou and the history of The Economics of Welfare. She also discusses Pigou's theories as expressed in this volume and some of the criticisms those theories have met as well as the impact of those criticisms. The Economics of Welfare is a classic that repays careful study.

part I|124 pages

Welfare and the National Dividend

chapter I|20 pages

Welfare and Economic Welfare

chapter II|8 pages

Desires and Satisfactions

chapter III|12 pages

The National Dividend

chapter XI|2 pages

The Method of Discussion to be Followed

part II|284 pages

The Size of the National Dividend and the Distribution of Resources among Different Uses

chapter I|4 pages


chapter XI|16 pages

Increasing and Decreasing Supply Price

chapter XII|14 pages

State Regulation of Competitive Prices

chapter XIII|7 pages

State Regulation of Supplies

chapter XIV|16 pages

The Conditions of Monopolisation

chapter XV|3 pages

Monopolistic Competition

chapter XVI|6 pages

Simple Monopoly

chapter XVII|15 pages

Discriminating Monopoly

chapter XVIII|28 pages

The Special Problem of Railway Rates

chapter XIX|11 pages

Purchasers’ Associations

chapter XX|7 pages

Intervention by Public Authorities

chapter XXI|45 pages

Public Control of Monopoly

chapter XXII|28 pages

Public Operation of Industries

part III|233 pages

The National Dividend and Labour

chapter I|4 pages

Industrial Peace

chapter IV|5 pages


chapter V|12 pages

Coercive Intervention

chapter VI|11 pages

An Analytical View of Industrial Peace

chapter VII|11 pages

Hours of Labour

chapter VIII|15 pages

The Methods of Industrial Remuneration

chapter X|7 pages

Employment Exchanges

chapter XI|12 pages

Unemployment versus Short Time

chapter XIII|8 pages

Methods of Engaging Labour

chapter XV|14 pages

Fair Wages Inside Particular Industries

chapter XVI|7 pages

Fairness as a Variable Relation

chapter XVIII|6 pages

Wage Kates and Capacity

chapter XIX|6 pages

A National Minimum Time-Wage

part IV|125 pages

The Distribution of the National Dividend

chapter I|2 pages

The General Problem of Disharmony

chapter II|9 pages

Pareto’s Law

chapter III|15 pages

The Supply of Capital and Labour

chapter IV|10 pages

Inventions and Improvements

chapter V|13 pages

The Manipulation of Wages

chapter VI|5 pages


chapter VII|6 pages

Subsidies to Wages

chapter XI|5 pages

Bounties on Things Purchased by the Poor

chapter XIII|10 pages

A National Minimum Standard of Real Income