Note: I want you all to be highly critical of my posts on factor shares – and where you can throw literature at me. I wrote a bunch of posts in a single day based on one book (and some prior knowledge), I have no appeal to authority here and would love to have your ideas thrown in there 🙂
Now here is an area I don’t know much about. Alfred Marshall is an amazing economist, Keynes said this about him – yes Keynes – so obviously he has a lot of respect. He even has the typical microeconomics demand curve named after him (Marshallian demand). However, it appears he had a distinct model of income distribution – one that was classicalist in its view of rent and factor supply (and its interest in secular changes such as population growth), but marginalist when it came to discussing demand for factors of production. The model discussed in the essay comes solely from Principles, rather than other work by Marshall.
The description of the elements in Marshall’s theory, from the essay, are as follows: Read more