CHAPTER EIGHT

To “Really Do
a Little Good”

A REDEMPTIVE CONCLUSION

THERE IS A PHOTOGRAPH of an elderly Pigou walking in the King’s grounds with another aging fellow, Frank Adcock, a retired professor, fittingly, of Ancient History. Pigou and Adcock had been fellows together at King’s for more than forty years.1 Though not particularly close in their youth, in old age, the pair had taken to perambulating the grounds. Captured in mid-stride on a steely day in March 1954, the two of them were strolling through the college toward the River Cam. Pigou had donned a battered tweed jacket, a scarf, and worn woolen mittens, one of which was wrapped around the handle of a cane. His frame less straight than in his youth, Pigou had about him the softened lines of age. He had become one of the “dark shades” of the “museum of the antique” whom he had playfully figured over fifty years before.

Even in his retirement, Pigou stayed ensconced in Marshall’s chair. This was not the Chair of Political Economy, but a physical armchair given to him by Marshall’s wife, “in which Marshall used to seat people who came to see him.”² The chair, however, was just one of the many laurels on which Pigou could rest. In the 1950s, Pigou, now in his seventies, began to take his retirement to heart. He still traveled up to Lower Gatesgarth at every opportunity, though by this point, he shared the house with Claude Elliott. Elliott served as president of the Royal Alpine Society from 1950 to 1952, and in that capacity, planned a good deal of the first successful ascent of Everest from the dark sitting room overlooking Buttermere.3 Pigou also still journeyed to the Alps, traveling “in safety by air in a Swiss plane,” and bringing along Tom Gaunt’s son (also Noel-Baker’s godson), David, for “instruction in mountaineering under the guide, Tom, but not his wife.”4 Pigou was also a frequent visitor at his friends’ houses, where he was a first class curmudgeon. He directed Noel-Baker that “you are to come visit me here . . . or to receive me, without any ‘entourage de cochons [pigs].’”⁵ When visiting Tom Gaunt, he pilfered his friend’s stationery.⁶ When planning to attend Wilfrid Noyce’s wedding, he bragged that he would be robed in “a claret-colored tie, jumper, socks, and handkerchiefs,” a picture of sartorial splendor.⁷

FIGURE 6. Pigou and Frank Adcock in King’s College, 1954.
Courtesy of Richard Cormack and King’s College Archives.

Pigou’s penchant for complaint and grumbling about politics persisted as well. As Noel-Baker relayed the internal bickering among Labour Party ministers, Pigou responded with sympathy and cynicism, announcing during a visit to Tom Gaunt that Lower Gatesgarth would “secede from the Commonwealth.” And when Noel-Baker was passed over for a position of leadership, Pigou commiserated and urged him to “abandon the doomed vessel and return to the gowns of Academia.”⁸ He took to composing poems about politicians. In one, he imagined the nation’s leaders reveling during a time of postwar rationing:

Champagne for us; though there’s coal for none

And meat for none and the nuts are done!

Champagne for us; let the vermin pay!

. . .

Till the sun goes down we will make our hay!

We shall keep our jobs; hip hip hooray!⁹

In another, this one for Francis Noel-Baker, Philip’s son and Pigou’s godson, he commemorated a Labour Party conference on the Isle of Wight:

The rats went down to the Isle of Wight,

The little rats and the great Big Rat!

. . .

They talked all day and they dreamed all night

Of whom to expel and whose back to pat.¹⁰

But despite all the vitriol Pigou spewed during the late 1940s and 1950s, he was hardly as despairing or as resentful as he had been over the preceding one and a half decades, especially after Noel-Baker was named Minister of Fuel and Power in 1950.

Nor was there ever any doubt of his affection for his friends or theirs for him. In the early fifties, Pigou began composing short stories for Wilfrid Noyce’s son, whom he called “Gaters,” the boy’s middle name being Gatesgarth. Featuring Gaters and his “girl friend Tiger Lily,” the tales were the product, in the words of Gaters’s mother, of the “Prof. at his most whimsical and far too clever for children.”11 Pleased with himself, he submitted a manuscript to Macmillan. “Bits of it have been tried out successfully on several children,” Pigou bragged, “and several parents (female) have said, ‘O Professor Pigou, why don’t you publish your delightful stories?’”¹² The editors were unmoved, but those personally close to Pigou were not. After all, Pigou was a devoted friend and, in the words of one of his longtime colleagues, his “young friends were indeed what he lived for.”¹³ In the end, not one family member inherited from Pigou. Although he had originally considered leaving a tidy sum to one of his nephews, he changed his mind when he discovered that the nephew in question was “well-to-do.” Therefore, his wealth—£27,290 according to probate records—was left to his friends, the people who had ensured his personal welfare, by cutting through his pervasive ire and disillusionment.¹⁴

Back in Cambridge, Pigou was finally feeling at ease. Certainly, his softening toward the public and his general change in outlook were naturally concordant with a late-blooming acceptance of his waning position in academic economics. It was not that Pigou retired completely from academic circles. He continued to contribute to organs like The Economic Journal and Economica, and between 1947 and 1954, he published twelve journal articles, several of which were quite technical.¹⁵ But he also began to explore new topics and relaxed his standards on political advocacy in economics journals as he was doing in his submissions to the popular press. Harkening back to his pre-professorial days, he wrote on historical political economy and current affairs. In 1948, he used a review of Lionel Robbins’s The Economic Problems of Peace and War to muse on central planning. Again, he advocated limited but rigorous planning, a position consistent with his support for Labour’s postwar policies. “The doors are wide open,” he wrote, “through which the State may claim, as a good neighbour, to step in.”16 The next year, he authored a short piece in The Economic Journal about J. S. Mill on wages.¹⁷

What was of key importance was that at this stage in his life, Pigou was under no illusion about contributing groundbreaking work. Writing to R. F. Kahn, he asked for candid edits. “Please tell me without camouflage whether it is bunk. The brain having softened, I can no longer distinguish between bunk and non-bunk, and so must rely on comments not buttered.”¹⁸ By the late 1940s, Pigou readily admitted his own fallibility to younger economists. To Richard Stone, a colleague in his thirties working heavily in statistics and national accounting, he wrote in 1948 of uncompleted projects with the apology that he was “too gaga to do it now.”¹⁹ Later, in response to being sent one of Stone’s articles, he ruefully noted: “It is possible, though not likely that I shall eventually understand it! Now . . . economics is becoming a branch of mathematics—which, so far as I ever knew any, I have completely forgotten! Alas for ‘progress’! I feel like St. John, ‘like a sea-jelly’ left astrand at Patmos.”²⁰ Even to Hugh Dalton, the “first-class tick,” Pigou admitted that he was “no longer on the active list as an economist.” Welfare economics, he complained, had “now become mixed up with highly complicated mathematical arguments about utility . . . with which I’m not now, if I ever was, competent to cope.”²¹

It was not just in private correspondence that Pigou acknowledged his own limitations. His articles sounded a deferential tone. He wrote to R. F. Harrod, now one of the editors of The Economic Journal in 1949, claiming, “having become too stupid to contribute, I’m becoming a commentator.”²² He even softened somewhat on Keynes’s work. In 1949, three years after Keynes’s death, Pigou wrote a short book on Keynes in which he praised the latter’s “fundamental conception” of how the market worked, bringing “all the relevant factors, real and monetary at once, together in a formal scheme.” Though he warned that “Keynesianism” was “in danger of becoming a new orthodoxy,” he acknowledged that he had “failed to grasp its significance” in his earlier critical review.²³

Throughout the late 1940s and 1950s, Pigou found his earlier work invoked and critiqued, often by unfamiliar and distant voices, many from the ever more important academic centers of the United States. Pigou and his work now existed in a fundamentally altered world order. The British Empire no longer ruled the waves, and Pigovian economics no longer represented the cutting edge of academic thought. When Pigou responded to invocations and references to his work, he did so principally to correct minor instances of misinterpretation or merely to comment on a new idea. “It is a misfortune of longevity,” he wrote, “that things which one wrote long ago survive in . . . later versions of one’s books. When errors are found in these things . . . it is only with extreme difficulty that the antiquated author can bring his mind—what is left of it—to bear on them again.24 Despite the difficulty, Pigou did bring his mind to bear on new ideas, especially those related to his early work on welfare. His goal, however, was not to critique or defend, but to explain his original intent to scholars who may not have been out of school when the piece in question had first been published. Responding in 1951 to an article by the American economist Paul Samuelson, which positively but critically invoked his “classic” treatment of national income in light of new developments in welfare economics, Pigou, then in his seventies, wrote:

It is not surprising that serious defects in my treatment have been revealed. I do not want to challenge Professor Samuelson’s argument on any substantial matter. The most useful way, I think, in which I can comment is by saying in my own language—his tools come unhandily to me—how these things seem to me to stand now.²⁵

Pigou would use his own tools, but even in their use, he would not fundamentally challenge any new work done on the subject on which he had labored decades before, avoiding any controversy around interpersonal comparisons of utility.²⁶ Four months later, in a retrospective on welfare economics written for the American Economic Review, he acknowledged that he was very much out of the currents of contemporary work. “A great deal has been written on this subject in recent years,” he noted, “and most of it I have not read.”²⁷

In 1952 and 1953, Pigou delivered the Marshall Lectures at Cambridge, a yearly lecture series that had been launched in 1946 in honor of his teacher. In his first, he “welcomed the chance” of “escaping for a moment from that shadowed land where departed spirits dwell.”28 Finding a topic on which to declaim was no simple task, Pigou explained, “for in that land memories fade and powers of concentration dwindle.” Ultimately, he came to the conclusion that as one of the “few survivors” of those whom Marshall taught, perhaps the most useful thing he could do was to “act as a liaison officer” between his long-departed teacher and the current generation of economists that knew the master only through his portrait in the library. The resulting lectures, published in 1953 as Alfred Marshall and Current Economic Thought, offered a commentary on current economic debates as he felt Marshall might have delivered it, covering a ride range of topics, including mathematical methods, utility, and socialism. For an aging Pigou, the work was a natural one to write. For though he had not given up academic economics, he had openly stopped trying to forge new thought. He was, instead, an elder statesman of his field whose age and experience were to be valued on their own terms.

With this new role, Pigou commented with increasing transparency on his ethical motivations. Reinvigorated by the possibility for meaningful political change, he returned to the positions for which Joan Robinson had referred to him as the “first serious optimist.” In a 1951 letter to Dalton, his ethical commitments were back on display. “The point about economics being not a normative science is, of course, only one of methodological convenience,” Pigou wrote. “Nobody suggests that an economist shouldn’t have ethical opinions; only it’s convenient not to call them economics.”²⁹

In the retrospective article for the American Economic Review, Pigou was explicit that the raison-d’être for welfare economics was “to suggest lines of action—or non-action—on the part of the State or of private persons that might foster . . . the economic welfare of the world.”³⁰ Without great argument, he stolidly reiterated his commitment to interpersonal comparisons of utility, not only because he thought that such measurements that existed could be compared but also out of a theoretical necessity: “if economic welfare were not something to which the notion of greater or less were applicable, welfare economics would vanish away.”³¹

The world needed welfare economics, and so did Pigou. With the rise of the Labour Party and more activist governments in countries around the world, the social significance of his economics of welfare reemerged as his final justification, a system whose truth and usefulness stood as his lasting contribution to the world. Keynes had overturned his work on unemployment, but his contributions about welfare, despite the concerted attacks of Robbins and his followers in the 1930s, were to live on.

Welfare economics, however, was not just a former project whose resuscitation gave Pigou a sense of fulfillment. It also lent him fame and validation. Throughout the fifties, he would be recognized for his contributions, perhaps most notably by the Academia Nazionale dei Lincei in 1955, which elected him a foreign member and awarded him a 5 million lira (about £3,000) prize.32 More importantly, however, his welfare economics seemed to acquire a new luster in the age of the burgeoning welfare state. Pigou’s welfare economics may not have directly precipitated the welfare state, but it participated importantly in a liberal turn toward increasingly social and communal thinking—consider, for instance, Hugh Dalton’s assertion that Wealth and Welfare was his “ethical starting point for economic journeys.” And though the roots of the welfare state were multifarious, it was certainly a product of this broad intellectual movement.³³

Throughout his career, Pigou had called for greater government intervention in the operation of the market. In retrospect, it is especially notable that he had specifically endorsed more steeply graduated tax regimes, more extensive state-mandated social insurance, and even the nationalization of key industries. In the postwar period, Pigou recognized the ethical impulses that motivated Labour Party leaders to be very similar to his own. Thus, Labour’s ability and wherewithal to implement its 1945 manifesto gave Pigou both real hope, and, on some level, vindication. And despite his continued mockery of party leaders in his private letters to Noel-Baker and others, the success of Labour’s enduring reforms ensured that that hope would be sustained even after the party’s electoral defeat in 1951.

With hope came a new sense of promise, a heightened resolve to commit himself to justice and “GOOD WORKS.” Despite continuing surliness, Pigou reinvested himself in questions of fairness and justice. These ethical considerations, which had lurked in the shadows of his economics for decades, reemerged into the light of publication. In 1954, for the first time since 1907, Pigou wrote a piece, “Some Aspects of the Welfare State,” for a philosophical journal, and not just any journal, but Diogenes, a new international journal of the social sciences that was simultaneously printed in French, English, and Spanish. Other early contributors included the French anthropologist Claude Lévi-Strauss; the American historian Oscar Handlin; and the German theorist Gerhard Ritter, whose piece on totalitarianism appeared just pages after Pigou’s. The setting of Pigou’s article thus reflected the extent to which Pigou himself had changed. Even a few short years before, he was a man who referred to foreign languages as “Wop, Frog, Jap, Hun,” and who, after impugning “talking to Yanks and Yank food,” referred to San Francisco as a “film-star ridden inferno.”34 Now he was seemingly embracing a more international public sphere.

Pigou was introduced by the editor of Diogenes as having “had a decisive part in the genesis of [the] great intellectual and moral mutation” of an “almost universal demand for the ‘Welfare State.’” Speaking from this elevated podium, Pigou launched into an authoritative overview, outlining tasks for which the welfare state was responsible.³⁵ It was to intervene to provide public goods like roads, and it was to look out for people who might not have their own best interests in mind by, for instance, providing mandatory basic education. It might also step in to regulate people like factory owners, whose activities yielded “uncovenanted damage on other people whose . . . losses do not enter into the[ir] calculations.” In a moment of self-congratulation, Pigou noted that “these gaps . . . between private and public costs were not much in people’s minds until fairly recently. Now everybody understands about them.”³⁶

Pigou offered up time-honored ideas, condensed into reflection on a life’s work in welfare. His words, however, had taken on a new kind of tone. Like his early pieces from the time before he became a professor, “Some Aspects of the Welfare State” manifested a fusion of ethics, politics, and economics. This resurrected and retooled synthesis was, by turns, earthy and soaring. Pigou grumbled about politicians and the ease with which democratic ideals could be corrupted. Elected officials were “not philosopher kings and a blueprint [for beneficial State action] might quickly yield place on their desks to the propaganda of competing pressure groups.” “‘Fancy’ finance,” he continued, “like a fancy franchise, whatever its theoretical attractions, has, at all events in a democracy, dim practical prospects.”37 But despite the regrettable incompetence and weakness of certain officials, Pigou was still firm in his desire for the state to be, in Marshall’s phrase, “up-and-doing.” Citing the absence of perfect competition, he dismissed the “thesis that Government should stand aside because private individuals know their own business and their own wants better than officials.” “The Welfare State,” Pigou defiantly declared, “will certainly not stand aside.”³⁸

This was a manifesto many years in the making, one that incorporated both the hopeful, idealistic theories of the young don and those of an old man, tempered by decades of experience. The result was arresting. Here, Pigou, for so long an apolitical commentator, loudly declared that the Welfare State, with all of its left-leaning connotations, was ultimately an instrument of social justice.

The [Labour] slogan fair shares, though a meaningless noise so long as fair is undefined, illustrates the benevolent, if muddled, aspirations of many enthusiasts for welfare. These seem at first sight so obviously right that to discuss them is a waste of time. But they were not always deemed obvious.³⁹

In the past, Pigou claimed, popular perception held that to help the poor was to render them “idle and thriftless.” To prevent mill owners from employing children for fourteen-hour days was also considered wrong. “To be poor was one’s own fault, a crime fitly punished by suffering.” These commonly held sentiments had, after so many years, been debunked and dismissed. “Other people’s poverty is no longer a crime; that is now the fate of other people’s wealth!” In this new, more morally sensitive context, redistribution was both natural and right. Besides, Pigou claimed, satisfaction was in large part social—after a certain point it had more to do with relative wealth than with absolute wealth.⁴⁰ “If everybody else is flaunting a pearl necklace and I, being for the purpose of the argument a lady, am not, I am grieved. But if nobody has a pearl necklace, I shall be equally content with glass beads.” At long last, the mature Pigou had arisen, a Pigou who moved naturally from theory to humor to moral dictum.

With a nod toward the internationalism of his friend Noel-Baker, Pigou even looked beyond domestic social welfare policy. The pair worked together over the summers of the mid-1950s on Noel-Baker’s book called The Arms Race: A Programme for World Disarmament, a project that helped Noel-Baker win the Nobel Peace Prize in 1959. In Noel-Baker’s words, Pigou “read everything I read and discussed it enthusiastically with me. After I was getting in great difficulties about how to arrange my material and make the argument of my book hold together, he made a complete plan for a book in 7 parts.” This plan was adopted, Noel-Baker claimed, “in toto.”41 The 1954 Diogenes article also reflected Pigou’s collaboration with Noel-Baker. “To reduce international tension, and therewith the need for armaments,” Pigou wrote, “is probably the greatest . . . contribution that a statesman could make to the development of the Welfare State.” Moreover, in it, he evinced a sharp ethical concern with global inequality and wondered whether it would not be hypocritical for a welfare state to ignore “the distresses of less fortunate parts of the world,” an important statement made during a long decade of decolonization.⁴²

At the time of his final book’s publication in 1955, Pigou was at his most openly egalitarian. This last book, Income Revisited, was the sequel to Income, his popular textbook from 1946, and in both its exposition as well as its ethical claims, it continued along the lines set by its predecessor. Like the first, it was aimed at “the plain man,” but it was even more explicit in its democratizing method and its efforts at inclusiveness. “The plain man confronted with recent refinements in economic theory, often expressed in mathematical language,” Pigou wrote, “may be tempted to think that the subject is one entirely for specialists and not for such as him.” However, “economic happenings affect the plain man in his private life and, maybe, have a bearing on his political judgment.”⁴³ Twenty years before, in a book intended to be generally accessible, Pigou had likened the public to goats. Now he welcomed his readership warmly, offering that “behind the complications of advanced analysis there is a central core of economic truth which can, I think, be made intelligible to any educated person who chooses to take a little trouble.”⁴⁴ The book, like its predecessor, endeavored to help make economics intelligible and was clearly set out with simple chapter titles like “Money,” “How Capital Is Built Up,” and “Social and Private Cost.”

Yet Income Revisited was not just a reference for armchair economists but also an inherently political work with clear ethical arguments. Four years before his death, in the final chapter of his final book, Pigou threw off the cross he had borne for five decades. He observed that economics was a study of what tends to happen rather than what ought to happen.

Questions about what is just or fair lie beyond its scope, and the law-abiding economist will not trespass among them. Definitions, however, are made for man, not man for definitions, and I do not propose to be law-abiding.45

Pigou broke the law with a splash. He titled the book’s concluding chapter “Fair Shares for All,” the former Labour Party slogan. And in the chapter itself, Pigou set out the most radical ethical opinion he had ever espoused.

In Income, Pigou had argued for equality of opportunity. In Income Revisited, he went much further. Fairness, he wrote, meant “equal shares for all” qualified first “by reference to differences in objective needs,” and second (and less importantly), “by reference to difference in contributions of service.” Pigou had, after years of avoiding moral philosophy, come out as an egalitarian, and a very strong one at that. On the second qualification—difference in contribution—he wrote:

A man may put more into a pool either because he is stronger or more intelligent or possesses a kind of skill which at the moment is in specially keen demand, or because he works for longer hours or more intensively or has devoted more time and labour to training and improving his faculties than others have.⁴⁶

Inequalities that resulted from ability or intellect, however, were hardly fair. “Greater strength or natural intelligence creates an obligation, not a claim!” Even rewards gained from luck, especially those made on the stock market, were unearned, and therefore unfair.⁴⁷ In any event, Pigou wrote, “we should not . . . consider it fair for differences in contribution to be associated with anything like equal differences of reward.” Thus, “very large differences of disposable income, whatever their cause, are on this plane of thinking not fair.”48 The political message was clear. Redistribution of the sort expected of the welfare state was as much an ethical imperative as it was an economic one.

Income Revisited displayed the nature of Pigou’s ethical thinking more clearly than any of his work since his taking the Chair in Political Economy. His ethics had changed considerably since then, shedding both their classism and their Government House mentality. With the hindsight of his own loss of status and his continued distaste for government hacks, Pigou had developed a democratized concept of fairness that stressed equality. This new egalitarianism, though idealistic, was still, in an important sense, pragmatic. It stemmed not only from his disenchantment with elites but also from Pigou’s renewed hope that politicians and economists could, in some synergistic enterprise, change the world for the better.

In the broadest of brushstrokes, Pigou’s changing relationship with the state depended on the rising importance of economic expertise in state management throughout the early twentieth century. Yet Pigou’s story demonstrates that the new scientific experts were often independent thinkers and not always eager participants in state projects.⁴⁹ For Pigou, politics and personal experience played vital roles in his understanding of the state. His move from Liberal to Labour mirrored Britain’s; like Britain’s, it was forged in the crucible of World War I. But his was also, to a large extent, made possible by his own particular intellectual and professional experiences of disciplinary shift and loss. Without having been overtaken by his professional colleagues, it is dubious that he would ever have turned to the public. Without having known professional hardship in the 1930s and the traumas of war, he would never have been able to rekindle the hope of his youth.

But a large part of the credit for the shift in Pigou’s thinking should be claimed by the Labour Party itself. Pigou’s ethics were able to shrug off its Government House mentality because of the success of Labour’s commitment to and execution of a limited form of central planning. Labour’s accomplishments reawakened Pigou’s dream of a competent intervener. This time, however, the nature of the intervener reflected Labour’s vision of a just future based on equality, not on mere management. At the end of his life, A. C. Pigou had come more than full circle. He had returned to a broad, multivalent practice of political economy, one in which his ethics took a prominent public role. More than that, he had discovered a new hopeful vision of a more democratic future. Ironically, only as a surly old don considered by many to be a recluse, did Pigou truly embrace people.