Spencer

Herbert Spencer (1820–1903) proposed that all things tend of their own accord to differentiate into specialized parts, and the specialized parts reknit themselves into more advanced wholes. He thought this applied to everything that exists, from the solar system to human language.Footnote ⁶ For example, in his history of biological organisms, Spencer starts with the “lowest” type, a sponge, which can be cut in half with both halves surviving. It has neither any “distinction of parts” nor any “greater completeness.”Footnote ⁷ He works up to vertebrates, which do not survive being chopped in half because their brains and “muscular, respiratory, nutritive, excreting, absorbent, circulatory” systems are complexly interconnected.Footnote ⁸

Spencer contended that a human society may be understood as a “social organism” following an evolutionary path. He contrasted a primitive social organism—a fissible foraging band composed of generalists—with an advanced society of interdependent specialists:

Note both the tight interdependence of the parts of this complex organism—”dead before another week ended”—and a process of specialization-plus-connection that can be attributed to neither God nor the state.Footnote ¹⁰

Within this framework Spencer built a historical theory of the human mind.Footnote ¹¹ The evolving social organism makes its individual members more enterprising and independent because it gives them wider scope for choice. Lamarckian inheritance played a critical role: when you exercise your mental capacities you strengthen them, and then, when you conceive children, you pass your strengthened capacities on to them—hardwired into their minds. Thus Lamarckian inheritance over deep time provided a story about how complex and independent human minds could emerge gradually, generation after generation, in a close causal nexus with the development of a more complex society. More rational and interesting people produce a more complex and interesting society, which produces even more rational and interesting people, and so forth.

It was a fundamental Spencerian tenet that all relations of dominance and submission are relics of the barbaric and primitive past.Footnote ¹² It was wrong to enslave a person, to constrain a woman to domestic duties, or to relieve the hunger of a pauper because by doing so you deprived that person of the opportunity to make their own choices, learn from the results, and develop a better mind.Footnote ¹³ By Lamarckian reasoning the person whose mental growth is stunted, whether by force or charity, will pass those stunted capacities on to their children and thus harm posterity.

A further consequence of Lamarckianism was that what is transmitted through a race over time is single mental character, a type, an average mentality.Footnote ¹⁴ Because such a mentality must work for everyone, it functions as a biologized categorical imperative: a society of cheats or bullies would be dysfunctional. It was Spencer's contention that advanced social evolution produced humans who were both enterprising and averse to hurting each other. This meshed with his understanding of a society as an integrated organism: if your internal organs are fighting you will not last long. Social evolution by this logic must produce internally harmonious societies. It will be a central argument in this article that Marshall's racial claims about “national character” are not just dusty stereotypes, but do theoretical work to ground social unity.

This is enough Spencer to set up Marshall. But because Spencer is often pigeonholed as a “social Darwinist,” a word of distinction may be in order. The work summarized above was published before Alfred Russel Wallace and Charles Darwin announced the theory of natural selection in 1858. More importantly, Spencer and Darwin had very different projects. Spencer was a system-building theorist who started from a bold conjecture about the nature of everything in the universe, almost like a pre-Socratic philosopher. Within that, he theorized the joint development of the human mind and human society across history. Darwin was a painstaking naturalist who generalized with legendary reluctance. He started with humble organisms and discussed humans and human societies only in the 1871 Descent of Man. Spencer's core mechanism of change and transmission was solidaristic and continuous Lamarckian development, not competitive selection.Footnote ¹⁵ Mutations do not provoke change in Spencer. Marshall read both Spencer and Darwin, but, as we will see, it is Spencer the psychological theorist who mattered to him.

The Grote papers

In 1865 Alfred Marshall (1842–1924) finished his Cambridge undergraduate career with an impressive second place in the Mathematical Tripos. His reward was a fellowship with minimal duties, which he used to read philosophy. He had read John Stuart Mill's Logic as a schoolboy, and his interest in the subject was rekindled by contemporary debates over religious knowledge.Footnote ¹⁶ Moral philosopher Henry Sidgwick (1838–1900) took Marshall under his wing, and in 1867 Marshall was admitted to the “Grote Club,” an elite discussion group of Cambridge fellows.

We do not know the exact dates on which Alfred Marshall read four papers to the Grote Club, but they were probably in 1867 and 1868, when he was in his mid-twenties. The club had formed under the leadership of moral philosopher and clergyman John Grote (1813–66), and was named for him after his untimely death. It carried on a strain of liberal Anglican thought influenced by Romantic conservative Samuel Taylor Coleridge (1772–1834).Footnote ¹⁷ Frederick Denison Maurice (1805–72), the most prominent liberal Anglican theologian of the mid-1800s, was appointed to his professorship, and attended Grote Club meetings. Maurice had been John Stuart Mill's friend and sparring partner in the late 1820s, one of the people who introduced Mill to Coleridge's writings.Footnote ¹⁸

This was a curious launching pad for the scholar who became the leading anglophone economist by the century's end. It is still more curious that the young Marshall used this Anglican forum to explore the ideas of the patently irreligious Herbert Spencer. In later life, Marshall sometimes described these years as a period of wandering in philosophy and psychology before he found his proper calling in economics.Footnote ¹⁹ But the figures who rubbed shoulders, metaphorically or physically, in those Cambridge rooms—Coleridge, Mill, Spencer, Grote, Maurice, Sidgwick—set up a field of inquiry and debate that remained important to Marshall throughout his life.Footnote ²⁰ Even as his confidence as an economist grew, he remained not only sensitive to Romantic criticisms of political economy, but actively sympathetic to many of them. When he emphasized “deliberateness” over “competition,” or argued that economic growth improved the moral character of the working class, it is as though Maurice, founder of Christian socialism and fierce critic of laissez-faire, was still in his audience.

In the four papers that Marshall read to the Grote Club in the late 1860s,Footnote ²¹ he developed Spencer's solution to the contemporary debate between associationist and intuitionist theories of mind.Footnote ²² In brief, associationists contended that humans are born knowing nothing, and gain all their understanding and know-how from sensory experience of the world, plus tracking associations between those experiences. Intuitionists, by contrast, believed that some truths are so obvious and necessary that we grasp them without experience. Associationism, promoted by James and John Stuart Mill, drew on the latest research on the nervous system, and its materialism had an attractive simplicity and rigor. John Stuart Mill gibed that intuitionists could arbitrarily declare any widely held prejudice an intuitively established fact. On the other hand, Marshall's liberal Anglican friends were drawn to intuitionism because it provided a way to ground religious truth. They were also sensitive to problems with associationism's theory of knowledge.Footnote ²³ Spencer's move in this controversy was to accept Mill's premise that knowledge comes from direct experience, but add Lamarckian inheritance: everyone is born with a distillation of everything their ancestors figured out. Rather than making every toddler build a mind out of nothing but direct experience, a race could do that over millennia. Hence upon a materialist foundation Spencer cleverly got two intuitionist results: the ancestral know-how that you are born with appears intuitively obvious to you, and it will be already spread among others of your race.

In the first two of the four papers, Marshall sided with his Anglican listeners on their critiques of association psychology, and pointed to Spencer's deep-time associationism as an alternative.Footnote ²⁴ The last of the four papers directly expounds Spencer, using Kant as a foil. When Kant calls ideas true a priori, writes Marshall, that ultimately means that he “does not see how they could be evolved from experience.” Spencer could have helped him out: “with Kant ‘a priori’ means ‘of which the origin is unknown’; with H. Spencer it means ‘of which the origin probably dates from a long time back.’ I often wonder what Kant would have said if he had had H. Spencer's interpretation of the words shewn to him.”Footnote ²⁵ Marshall uses a geometrical example to explore intuitions. He develops what he regards as an intuitively obvious definition of a straight line, and writes that “on H. Spencer's [theory] it would be easily formed in the race by experience.” Thus, as Raffaelli writes, Spencer let Marshall discard the associationist assertion that the mind starts as a blank, and also steer clear of Kantian idealism, because Spencer provided an alternative theory that made “the mind a complex structure, formed through the ages, capable of reacting on external phenomena and imposing its own changing pattern of knowledge.”Footnote ²⁶

It is the third of the four Grote papers, “Ye Machine,” that is the most original.Footnote ²⁷ In it Marshall built a psychological model to explore the Spencerian alternative. To clothe abstractions, he wrote it as a whimsical account of a society of mobile, coal-powered, autonomous robots. The robots have sense organs that perceive the outside world and transmit perceptions to a mechanical brain. The brain works under two constraints: (1) it seeks pleasure and avoids pain (pleasure is essentially finding coal), and (2) computation is costly. The brain is divided into a lower and an upper part. The lower part registers incoming perceptions, remembers associations between them, chooses actions, and transmits instructions back out to the body. It learns by trial and error and automates successful routines. Routines become instinct, and are inherited: “the Machine … might make others like itself. We thus get hereditary and accumulated instinct. For these descendants, as they may be called, may vary slightly, owing to accidental circumstances, from the parent. Those which were most suited to the environment would supply themselves most easily with fuel, etc. and have the greatest chance of prolonged activity.”Footnote ²⁸ Here Marshall includes both Lamarckian inheritance and Darwinian natural selection.

When the machine's lower brain encounters problems it cannot solve, it refers them to an upper brain that is specialized in running simulations.Footnote ²⁹ The upper brain has no access to the outside world, but keeps a copy of everything the lower brain has learned. It can use this data to work out the chains of consequence that are likely to follow different actions, and point the lower brain to the action with the greatest benefit in the long run. Though computationally costly, simulations add problem-solving capacities. Marshall provides an analogy: “When a man is playing at chess … his character is displayed in the way in which he grasps at immediate advantages or, on the other hand, tries to look further. But it will depend on his power whether he can do so or not.”Footnote ³⁰ This provides a theory of that Victorian touchstone, “character.”Footnote ³¹ In chess, everyone has the goal of winning. The difference is between the player who can work the game out many moves ahead, and another player who either lacks the ability to do this, or who perhaps can perceive disaster far ahead, but cannot resist the satisfaction of an immediate advantage. This kind of planning became central to Marshall's theory of the English entrepreneur as a creative business builder rather than a wily opportunist.

A threat appears: “a monkey was in the habit of stealing coals from the boxes of the Machine.” The machines learn to warn each other when they spot the monkey. From this starting point they develop language. They develop sympathy for each other. “In different Machines there would be what I shall call different moral characters,” he writes, which would determine how great was “the pleasure derived” from observing another machine's happiness. He adds, “I ought incidentally to call attention to the power of Natural Selection in preserving those races in which the principle of sympathy was most powerful, and thus increasing the pleasure attached to the idea of another's pleasure.”Footnote ³² On this point Marshall appears to be referencing Darwin, whose Origin of Species discussed altruism among insects, but the argument fits Spencer's view that the members of an advanced society do not hurt each other.Footnote ³³ Note that trouble comes from outside the society of machines, in the form of the thieving monkey. As inhabitants of an advanced Spencerian society, the machines do not loot each other. They need no external authority, whether family, church, or state, to educate them, guide their choices, or regulate their behavior. Born adult, they need no education.

“Ye Machine,” then, turns Spencer's deep-time associationism into a rigorous model. Marshall develops two ideas that will be important to his economics: foresight and mutual sympathy. Both are theorized as racial traits, which develop, bit by bit, through daily activities, and are then passed to progeny. The model contains no institutions or cultural glue: no family, kinship, religion, law, state, or schooling.Footnote ³⁴ In that sense it does what a good model should: it demonstrates the power lurking within a small set of assumptions.

The core theoretical commitments evident in this paper, which carried through the rest of Marshall's career, were hardly exclusive to Spencer. Natural causation, of a steady slow kind (no supernatural intervention, catastrophes, or shocks) may be traced to Charles Lyell's uniformitarian geology of the 1830s, and evolutionary ideas had a longer history.Footnote ³⁵ Liberals like Mill mistrusted institutions and traditions. But Spencer, who was at his most radical in the 1850s, pushed those ideas farther and earlier than anyone else. It took Darwin until 1871 to bring an evolutionary theory to bear on humans. The young Mill famously passed through a period of doubt about utilitarianism's explanatory capacity, and he limited the social sphere in which the laws of political economy held. Doubts, carve-outs, and qualifications were foreign to Spencer's thinking. Marshall wrote of him in 1904,

The reference to Mill was both swipe and concession. Marshall's formation and entire career were downstream of Mill, a much subtler philosopher and social scientist than Spencer. The Grote Club worked in the intellectual space opened by Mill's engagement with Coleridge in the 1820s, and Marshall's earliest economic writings, which appeared in the 1870s with Sidgwick's encouragement, proceeded by critique of Mill's political economy. But Mill never offered a comprehensive evolutionary theory of human society.Footnote ³⁷ Spencer's fealty to uniform natural causation would have made abundant sense to the young Alfred Marshall, because he had just completed a rigorous undergraduate program in Newtonian physics, crowned with success in the Mathematical Tripos.

Developing a Spencerian economics

Spencer provided a theory of social evolution that worked through the practical know-how of ordinary people.Footnote ³⁸ In the 1870s, as he turned himself into an economist, Marshall drew the inference from this that people's economic lives are the motor of history. This is because it is in their economic activity—their work, their consumption, their businesses—that people use their minds most often and have the most experience making choices and learning from the results. The automata of “Ye Machine” formed their minds through the humble activity of seeking coal.

Marshall made this claim more than once, with pointed comparisons to competing theories. In a lecture following his 1875 research visit to the United States,Footnote ³⁹ Marshall criticized Tocqueville for failing to “examine minutely the influence which the daily occupations of men exert on their character.” Thus, says Marshall, he “spent little of his time, where I spent most of mine, in American workshops.” The claim reappears on the first page of the introduction to his 1890 Principles of Economics:

Marshall distinguishes sharply between economic and religious motives, and puts the latter aside: his is a materialist theory. In the 1875 lecture, Marshall argues that US conditions have made workers more mobile, readier to move from place to place and to change careers, and thus more accustomed to relying on their “own powers of analysis and judgement,” than their counterparts in England, who were more influenced by community and custom.Footnote ⁴¹ As a result, Americans, he says, develop “a firm will through the overcoming of difficulties” that

What is being biologically transmitted here is not quite as elaborate as the problem-solving algorithms that the robots in “Ye Machine” bequeath to their clones, but the claim is still strong: responding to a new social/economic environment that encourages mobility, American workers are developing a firmer will, a habit of making their own judgments, and better “instincts” for assessing their options. They are then passing those qualities to their descendants at birth.

In the 1890 Principles of Economics, Spencerian underpinnings are most explicit in the chapter on industrial organization.Footnote ⁴³ There Marshall endorses Spencer's doctrine of “unity of action between the laws of nature in the physical and in the moral world” and the principle that an organism, “whether social or physical,” develops via “an increasing subdivision of functions between its separate parts on the one hand, and on the other a more intimate connection between them.”Footnote ⁴⁴ He repeats the theory of economic history, we have already seen—“This influence of heredity shows itself nowhere more markedly than in social organization. For that must necessarily be a slow growth, the product of many generations: it must be based on those customs and aptitudes of the great mass of the people which are incapable of quick change”Footnote ⁴⁵—and makes the argument we saw in “Ye Machine,” that “deliberate, and therefore moral, self-sacrifice” characterizes advanced races:

The Principles of Economics also provides an evolutionary theory of consumption. In Marshall's view, “uncivilized man” has only animal needs, but as civilization develops, new activities bring new wants. “Activities” should be read in a Spencerian sense: the things people do every day, their routines, the substance of their daily lives, which shape them and their desires.Footnote ⁴⁷ People come to want better housing and clothes and a greater variety of food, as well as more interesting leisure: “Leisure is used less and less as an opportunity for mere stagnation; and there is a growing desire for those amusements, such as athletic games and travelling, which develop activities rather than indulge any sensuous craving.”Footnote ⁴⁸ He is discussing the English here, as he makes clear in a footnote about the moderation of alcohol consumption, in contrast to

Despite its title, Principles of Economics is not an exposition of a universal, a priori economic science. Indeed when the historian William Cunningham attacked it in 1892 for assuming that “it is possible to formulate economic laws which describe the action of economic causes at all times and in all places,”Footnote ⁵⁰ Marshall replied indignantly that “the leading motive of its argument is the opposite of that which Dr. Cunningham ascribes to it.”Footnote ⁵¹ “On the contrary,” he wrote, “the subject-matter of a science passes through different stages of development, the laws of one stage will seldom apply without modification to others; and my definition of an economic or other social law is ‘a statement that a certain course of action may be expected under certain conditions from the members of a social group.’”Footnote ⁵²

To see the racial frame more clearly, let us go back to the writings on Marshall's 1875 trip to America, because we must qualify the phrase “American workers.” Like Spencer, Marshall understood social evolution as a process that happened across a very wide range of types of human. His write-ups of factory visits categorize workers racially, with observations, based on his observations of their bodies and faces and conversations with managers, about their capacities for work. The “American worker” with the “firm will” in the earlier quotation is an Anglo-Saxon who has had the stimulus of US conditions for several generations. Recent immigrants from England, Canadians, and Protestant Germans are a step below “Americans” in the qualities he names, but within a generation or two, Marshall writes, their descendants should have attained these qualities. Somewhere farther back are Americans of Irish descent, whom he treats with a mixture of condescension and contempt. He allows that US-born children of Irish immigrants are an improvement over their native stock, but expresses no definite view about when or whether their descendants will achieve Anglo-Saxon excellence.Footnote ⁵³ Americans of African descent appear only once in his writings on this trip: in a letter Marshall writes that the Missouri valley is “full of swamps, negroes, Irishmen, agues, wildly luxuriant flowers and massive crops of corn.”Footnote ⁵⁴ Native Americans are entirely absent from his accounts. So are Asian immigrants, but in a passage in the 1890 Principles of Economics, Marshall treats Chinese workers in the US as not only unassimilable but parasitic:

The history of English racial thinking shows an older races-for-places school whose most prominent exponent was Robert Knox (1791–1862); it dealt in climates, gross anatomy, and sometimes frank polygenism. These writers looked backward to origins, in the English context typically to Teutonic or “Saxon” migrants from late antiquity.Footnote ⁵⁶ But around the middle of the nineteenth century, we can detect a new set of ideas clustered around the term “Anglo-Saxon.” As Robert J. C. Young writes, the term “was originally used predominantly in North America, and introduced into English precisely to describe the English abroad, the diasporic population.”Footnote ⁵⁷ Anglo-Saxons were dynamic and forward-looking, capable of overspreading the earth rather than being confined to a few rainy isles.Footnote ⁵⁸ This vaguer term de-emphasized origins: “Anglo-Saxon” often included Britons who could not claim “Saxon” ancestry; some writers (though not apparently Marshall) included the Irish. As Catherine Hall, Young, and others have shown, this redefinition was linked to a reformulation of the British imperial project in terms of transnational whiteness, with increasing disdain and hostility toward blacks and Asians.Footnote ⁵⁹

Marshall participated in this latter school. Spencerianism provided a theory of dynamic racial improvement, as we have seen. His US visit was a pilgrimage to the leading edge of Anglo-Saxondom; his commitment to this diasporic project remained undimmed in later life. In 1904, rebuking British protectionists who called the United States a “foreign country,” he protested that it contained “many more of our race than do all our colonies and dependencies together”: “But higher than this material consideration I place the belief, which means to me far more than any opinion which I hold about tariffs. It is that our true ideal is to be found not in little Anglosaxondom, but in great Anglosaxondom.”Footnote ⁶⁰

His write-up of US economic development in 1920's Industry and Trade treats the US workforce as white, a “strong mixed race” composed of European races of various talents. He starts with “English, Scotch, and German immigrants, and then moves to Italians, Irish, and Slavs, who, he says,

Peter Mandler has sought to limit “race” to Knox-style “biological racism” characterized by a “branching tree of peoples and nations.” In his view the “civilizational perspective,” with a single ladder that all might climb, is not racial.Footnote ⁶² This seems unduly narrow. First, as we have seen, a single-ladder theorist like Spencer theorized a heritable mental capacity for civilization.Footnote ⁶³ It was embodied, though not in a way a scalpel-wielding anatomist could detect. More broadly it is anachronistic to impose a contemporary category of “biological” on nineteenth-century thinkers who used different mental maps and thought about inheritance in very different ways.Footnote ⁶⁴ Most broadly, racial claims were and are political: they are about who merits power over whom. Marshall's 1890 claims about Jews, Armenians, and immigrant Chinese, quoted above, were written in a global context of private and state violence against these people, often accompanied by the charge of parasitism that Marshall leveled: their economic presence within the nation was intolerable. His claims about the “West Indian negro” quoted earlier should be read against the repression of the 1865 Morant Bay rebellion and abolition of the Jamaican Assembly; at the same time white-majority colonies were allowed increasing political participation. The laddered “civilizational perspective” was considerably more dangerous to nonwhite populations on colonial frontiers than the older, branching, races-for-places view, because it argued that they were doomed to perish as Anglo-Saxon settlement spread over the entire earth.

People who make racial claims may choose to ground them in gross anatomy, subtle qualities of the brain, climate, culture, or what have you, but these groundings are secondary and often shifting and opportunistic.Footnote ⁶⁵ Nor can we reduce the material above to the banal fact that Marshall, as an individual, held racial stereotypes. What matters is that the stereotypes did political and theoretical work. Part of that work was explaining the global distribution of wealth.

The English worker and the English entrepreneur

In another letter in 1875, written during his voyage to the United States, Marshall described shipboard discussions with an Irish priest on a number of topics. One was economic development. Challenging the priest's claim that the Irish are “naturally industrious,” Marshall asked why Irish manufacturing lagged. “He could only say that (i) some Irishmen succeed as manufacturers in the United States, & that some at least of these are of purely Irish blood, & (ii) Irish manufactures used to flourish before they were destroyed by English tyranny.”Footnote ⁶⁶ Marshall riposted, “since that time (i) the character of the English people has changed (ii) the change that has come over the mode of conducting manufacture is such as to give a higher premium than before to the specially Anglo-Saxon qualities of enterprise, daring without recklessness, the power to organize & the power to command & to obey.”Footnote ⁶⁷ Note that the racial explanation was a response to the claim of “English tyranny.” Marshall was well aware of alternative explanations for English manufacturing dominance. He was, for example, an appreciative reader of Friedrich List and Gustav Schmoller, who, like the Irish priest, attributed English commercial and manufacturing dominance to force and fraud.Footnote ⁶⁸

English workers, wrote Marshall in 1890, lead the world in stamina and capacity for hard work, and in the ability to handle “expensive machinery and materials.” By contrast, “backward races” are “unable to keep on at any kind of work for a long time … they have not the requisite assiduity, and they can acquire it only by a long course of training”: “it is probable that not one-tenth of the present populations of the world have the mental and moral faculties, the intelligence, and the self-control that are required for it: perhaps not one-half could be made to do the work well by steady training for two generations.”Footnote ⁶⁹ These qualities have deep roots:

Marshall has to allow that these qualities “remained latent for a long time,” as English manufacturing lagged continental Europe until the 1800s.

The English entrepreneur who employs these workers also has innate qualities. He has escaped traditional ways of doing things, and evaluates each situation anew.Footnote ⁷¹ We saw his antecedent in “Ye Machine,” whose lower brain was capable of arriving at roundabout production methods, and whose simulation-running upper brain was able to explore novel solutions to hard problems. This is the “daring without recklessness” in the passage quoted above. Marshall historicizes it this way:

He provides counterexamples of people in India and Ireland who save assiduously, but for festivals: “They make intermittent provision for the near future, but scarcely any permanent provision for the distant future: the great engineering works by which their productive resources have been so much increased, have been made chiefly with the capital of the much less self-denying race of Englishmen.”Footnote ⁷³ In addition to his powers of perceiving and pursuing long-term advantages, the English entrepreneur has special powers of organization and command. Marshall traces these to ship's captains: “The process by which he was developed into a capitalist manufacturer was gradual and continuous … he needed qualities of mind and character somewhat similar to those of a capable captain of a ship trading on long voyages far from home: and these also were natural to the English and had been developed by their work in the world.”Footnote ⁷⁴ The English entrepreneur is honest in trade. Marshall acknowledges that “opportunities for knavery are certainly more numerous than they were,” but denies that dishonesty is on the rise in England. For this purpose he reverts to an a priori argument about the nature of modern trade, bolstered by comparisons with backward countries and the European past:

He adds an important distinction. The English, he writes,

Note the English “action” as opposed to sterile “manoeuvring and speculative combination.”Footnote ⁷⁷

“Even with their neighbors” is more than moral indignation. It is an argument that the social evolution, the racial development, of these Eastern people has yet to produce internal solidarity. In these paragraphs he is speaking directly to English critics of laissez-faire who argued on a priori grounds that market competition set members of a community against each other. He is driving a racial wedge between the cheating merchant and conniving speculator on the one side, and the bold and virtuous entrepreneur on the other.

Finally, the English entrepreneur is a benevolent employer. Marshall is aware of the standard economic argument that if employers follow their narrow self-interest, they will spend less on training workers than is socially optimal.Footnote ⁷⁹ But good employers, he writes, will nonetheless train generously, “partly because the character that fits them to take the lead in the arts of production is likely also to make them take a generous interest in the wellbeing of those who work for them.”Footnote ⁸⁰ “Character” is the critical term. He stresses that he is not describing every employer, only the leading, “liberal” employers who represent the direction in which the English race is moving. Such employers join the best parents, whom we will consider below, in sacrificing narrow individual interest for the progress or the race.

It is tempting to see this as mere national chauvinism. But it has several functions. One, noted above, is to deny that geopolitics or colonialism played an important role in British economic history. Another explanation that he heads off is the accumulation of physical capital. Marshall certainly understood the arguments and facts. He had read the first volume of Marx's Capital, made many factory visits, and took pride in understanding production processes. But while accumulation of physical capital is recognized in his work it bears little explanatory weight. Instead what mattered to Marshall was the gradual accumulation of human capital in the population as a whole. This is explicit. He wrote that the English “middle and especially the professional classes”

In sum, there are two guiding ideas in Marshall with clear Spencerian roots. The first was a theory of gradual, continuous historical change that explains the present: people's daily lives, their mundane decisions about how to work and how to live, are the motive force in economic history and social history in general.Footnote ⁸² The social world that we see around us is the product of slow evolutionary forces, moving through gradual changes in the mental capacities of average people. The differences we see in wealth and income are the consequence of different levels and kinds of social evolution. This section of the article has explored how Marshall developed that argument in the figures of the English worker and entrepreneur.

The second idea was that advanced societies are internally altruistic. This was Marshall's response to the charge that laissez-faire was socially corrosive: Anglo-Saxons could handle it. Workers worked harder and took better care of machinery. English households spent more on the education and care of their children and less on drink and other dissipation. English merchants did not cheat their customers. English entrepreneurs were generous employers; they fixed their eyes on distant horizons and pursued long-term goals.

Marshall remained quite faithful to these ideas. Compare Walter Bagehot's 1872 Physics and Politics. The book begins in a Spencerian vein, with a Lamarckian argument about character development that draws on association psychology. But Bagehot quickly moves on to inherited “custom,” with arguments about law, military organization, and family that we would now call cultural or institutional. He also claims that the habits of influential people spread through populations by imitation.Footnote ⁸³ Such eclecticism was foreign to Marshall. His historical writing, notably in the historical appendix to the Principles of Economics and in Industry and Trade, is logically parsimonious, hewing closely to the guiding ideas named above. There are no great men; no transformative inventions; no breakthroughs, leaps, or crises.Footnote ⁸⁴

Transmission of racial qualities

In Herbert Spencer's system, the quality of the human capital stock improved as long as people got the freedom to make choices and learn from them. In his 1851 Social Statics he boldly extended this argument to childhood, looking forward to a time when children would be born with characters so elevated that they could be raised and educated with no coercion at all. It is safe to say that Marshall did not buy this (Spencer himself, in later writings, conceded that this ideal was a long way off).Footnote ⁸⁵ In his 1875 lecture on America, he asserts, “The American woman … will harden her hands with unceasing drudgery so her daughters may be nurtured in delicacy.”Footnote ⁸⁶ The Principles of Economics likewise stresses child-raising:

If genetic inheritance sufficed, being raised by servants would not matter. How much of this was due to a loss of faith in Lamarckian inheritance? It is hard to say. At this point Marshall was aware of Weismann's 1880s critiques of Lamarck, but the Principles of Economics still includes an exposition of Lamarckian inheritance which, though qualified in the second edition, remained in the book through the eighth edition of 1920.Footnote ⁸⁸ Still, despite a few Lamarckian resonances, the essential feedback loop in the Principles of Economics runs from greater prosperity to greater attention to the raising and education of children.Footnote ⁸⁹

Yet 1920's Industry and Trade is surprisingly Lamarckian.Footnote ⁹⁰ It goes out of its way to emphasize that national characters are diffused among an entire population. Marshall provides this exegesis of the book's epigraph, “The many in the one, the one in the many”:

These shared mentalities change slowly, and are rooted in the distant past: “The present indeed never reproduces the past: even stagnant peoples gradually modify their habits and their industrial technique. But the past lives on for ages after it has been lost from memory: and the most progressive peoples retain much of the substance of earlier habits of associated action in industry and in trade.”Footnote ⁹² Then there is an extraordinary passage at the start of his chapter on “Britain's Industrial Leadership.” How is it, Marshall asks, that English industry lagged its European rivals in the Middle Ages, but caught up in the seventeenth century, and surpassed them in the eighteenth? He acknowledges complex causes, but picks out “the peculiar character of Englishmen,” and explains,

We saw the archer story earlier in this article. What is interesting about this passage is not so much the explicit points as the implicit connections between them. The bicycle example is pure association psychology: a skill you learn by hardwiring it into your nervous system. He jumps to Bücher, who argues for racial memory. This sets up a claim that a complex skill like archery lingered among people who had not lifted a bow in generations. This is Lamarckianism without Lamarck. Explicitly biological connections are no longer written down, but “race” continues to designate a group with a common deep-historical mentality that is reflected in capacities for economic activity.

This helps us recapitulate what “race” means, as Marshall used the term. It means that certain capacities are (a) built into people, (b) characteristic of a large group, (c) rooted in its past, and (d) capable of changing only over generations. The “built-in” part need not rest on “biology,” however “biology” is conceived. As Stocking pointed out about US social scientists, August Weismann's 1880s critique of Lamarck did not destroy Lamarckianism, but rather made it “implicit rather than explicit” as former Lamarckians found other ways to ground the racial natures they considered obvious facts about the world.Footnote ⁹⁴