ABSTRACT
The analytical tradition of neoclassicism after Alfred Marshall’s Principles, and the laissez-faire policy conclusions that most interpreters inferred from it, dominated economic thought for at least the first three decades of the twentieth century. It was continued by several able theorists who undertook to extend the oral and written tradition inherited from
Marshall. Marshall’s work was continued by Arthur Cecil Pigou (1877-1959), who was among Marshall’s most brilliant students and his successor at Cambridge. Much of Pigou’s work places him firmly in the mainstream of neoclassicism. His inquiry into the conditions required for maximizing welfare and his argument concerning the need for special concern about social costs and benefits generated a heated controversy with Frank H.Knight (1885-1972), of the University of Chicago, who founded a more conservative tradition than Marshall’s.
