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The First Serious Optimist: A. C. Pigou and the Birth of Welfare Economics
A groundbreaking intellectual biography of one of the twentieth century's most influential economists
The First Serious Optimist is an intellectual biography of the British economist A. C. Pigou (1877-1959), a founder of welfare economics and one of the twentieth century's most important and original thinkers. Though long overshadowed by his intellectual rival John Maynard Keynes, Pigou was instrumental in focusing economics on the public welfare. And his reputation is experiencing a renaissance today, in part because his idea of externalities or spillover costs is the basis of carbon taxes. Drawing from a wealth of archival sources, Ian Kumekawa tells how Pigou reshaped the way the public thinks about the economic role of government and the way economists think about the public good.
Setting Pigou's ideas in their personal, political, social, and ethical context, the book follows him as he evolved from a liberal Edwardian bon vivant to a reserved but reform-minded economics professor. With World War I, Pigou entered government service, but soon became disenchanted with the state he encountered. As his ideas were challenged in the interwar period, he found himself increasingly alienated from his profession. But with the rise of the Labour Party following World War II, the elderly Pigou re-embraced a mind-set that inspired a colleague to describe him as the first serious optimist.
The story not just of Pigou but also of twentieth-century economics, The First Serious Optimist explores the biographical and historical origins of some of the most important economic ideas of the past hundred years. It is a timely reminder of the ethical roots of economics and the discipline's long history as an active intermediary between the state and the market.
The First Serious Optimist is an intellectual biography of the British economist A. C. Pigou (1877-1959), a founder of welfare economics and one of the twentieth century's most important and original thinkers. Though long overshadowed by his intellectual rival John Maynard Keynes, Pigou was instrumental in focusing economics on the public welfare. And his reputation is experiencing a renaissance today, in part because his idea of externalities or spillover costs is the basis of carbon taxes. Drawing from a wealth of archival sources, Ian Kumekawa tells how Pigou reshaped the way the public thinks about the economic role of government and the way economists think about the public good.
Setting Pigou's ideas in their personal, political, social, and ethical context, the book follows him as he evolved from a liberal Edwardian bon vivant to a reserved but reform-minded economics professor. With World War I, Pigou entered government service, but soon became disenchanted with the state he encountered. As his ideas were challenged in the interwar period, he found himself increasingly alienated from his profession. But with the rise of the Labour Party following World War II, the elderly Pigou re-embraced a mind-set that inspired a colleague to describe him as the first serious optimist.
The story not just of Pigou but also of twentieth-century economics, The First Serious Optimist explores the biographical and historical origins of some of the most important economic ideas of the past hundred years. It is a timely reminder of the ethical roots of economics and the discipline's long history as an active intermediary between the state and the market.
352 pages, Hardcover
Published June 6, 2017
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April 1, 2021
This book does a great job depicting the complex character and ambitions of Piguo along with economics in the early 20th century. Originally, I naively thought Piguo was a very zealot believer in ethical economics, along with being highly in favor of state interventionism in the case of a market failure with externalities, this book dispels this myth.
However, if you are looking for a book that goes deeply into the economics of this time, this isn't the book for that. It mostly gives a high level overview of the economic beliefs and techniques of Piguo and his fellow economists at the time. Additionally, it doesn't go into the nitty gritty details of Piguo's personal life, however this book still does a good job of providing you with a good idea of his character and personality through the stories and anecdotes it tells.
A common theme in this book that Piguo's views and attitudes were product of his environment and changing life circumstances. In the beginning of the book we learn that Piguo did not plan on studying/making a career in economics and actually studied history and philosophy in his undergraduate years. It was only by chance that during this time economics, history, and political economy were all intertwined that he found economics along with Alfred Marshall as a mentor. We learn that Piguo, became the head professor at cambridge economics, taking over Marshall's position, at the young age of 30, something that would be unheard of today.
This responsibility greatly changed Piguo, as before he would publish articles on ethics and had strong views and interests in this subject, however, after this he began to exclusively write on economics. He felt a lot of pressure filling in the shoes of Marshall, and I believe he ended up changing himself to fit Marshall's dream of a economic science that was impartial and apolitical. We see that even though Piguo had a lot of political and ethical concerns, many of these beliefs were hampered and/or muted due to this role.
We also learn that his experience in WWI along with workings of the government greatly changed Piguo's beliefs and concerns. Deemed the "first serious optimist" by Joan Robinson, for his writings and beliefs of state interventionism in the case of market failures/externalities, he became more disillusioned by the competency of the state. Because of this he began to write more and more technical papers that had little relevance to the common man and public policy. As a result he became disillusioned with his optimistic beliefs that economists could work in tandem with the state to bring about positive change in society.
Two other events in the field of economics greatly disillusioned Piguo after WWI as well. First, was the rising star of Keynes, whose system of thought and cult following questioned his "Marshallian" approach, which Piguo used to analyze most economic issues. Also the rise of positivism along with a rejection of interpersonal utility comparisons also questioned many of Piguo previous assertions and beliefs that were the foundation of his works on welfare economics. These both led Piguo to have an ever decreasing role and relevance in academic economics during this time and Piguo slowly began to realize his dwindling role as a academic economist from his once superstar like status in the profession. It was painful to read about his bitterness and almost child-like bickering with others in academia. You could tell that he wasn't too happy during this period of his life.
Luckily, partly because of these developments and the rise of the Labour party after WWII, Piguo had a bit of a redemptive arc. Realizing his lack of relevance in academia, he began to spend more of his energies writing pieces directed towards the common man and educating the populace on economics. He also was unafraid to speak and express his views on ethics, politics, and economics in his writings as he was no longer the reserved academic. As a result, he was able to express many of the views that he would have never have expressed, during a time of the UK's rapid transition to a welfare state and rekindle his title as "the first serious optimist".
This book was a really interesting look at the pressures many academics face in presenting their views the public, how their views can easily change due to their status in the profession, and how they can change due to the changing social/political developments during their time.
However, if you are looking for a book that goes deeply into the economics of this time, this isn't the book for that. It mostly gives a high level overview of the economic beliefs and techniques of Piguo and his fellow economists at the time. Additionally, it doesn't go into the nitty gritty details of Piguo's personal life, however this book still does a good job of providing you with a good idea of his character and personality through the stories and anecdotes it tells.
A common theme in this book that Piguo's views and attitudes were product of his environment and changing life circumstances. In the beginning of the book we learn that Piguo did not plan on studying/making a career in economics and actually studied history and philosophy in his undergraduate years. It was only by chance that during this time economics, history, and political economy were all intertwined that he found economics along with Alfred Marshall as a mentor. We learn that Piguo, became the head professor at cambridge economics, taking over Marshall's position, at the young age of 30, something that would be unheard of today.
This responsibility greatly changed Piguo, as before he would publish articles on ethics and had strong views and interests in this subject, however, after this he began to exclusively write on economics. He felt a lot of pressure filling in the shoes of Marshall, and I believe he ended up changing himself to fit Marshall's dream of a economic science that was impartial and apolitical. We see that even though Piguo had a lot of political and ethical concerns, many of these beliefs were hampered and/or muted due to this role.
We also learn that his experience in WWI along with workings of the government greatly changed Piguo's beliefs and concerns. Deemed the "first serious optimist" by Joan Robinson, for his writings and beliefs of state interventionism in the case of market failures/externalities, he became more disillusioned by the competency of the state. Because of this he began to write more and more technical papers that had little relevance to the common man and public policy. As a result he became disillusioned with his optimistic beliefs that economists could work in tandem with the state to bring about positive change in society.
Two other events in the field of economics greatly disillusioned Piguo after WWI as well. First, was the rising star of Keynes, whose system of thought and cult following questioned his "Marshallian" approach, which Piguo used to analyze most economic issues. Also the rise of positivism along with a rejection of interpersonal utility comparisons also questioned many of Piguo previous assertions and beliefs that were the foundation of his works on welfare economics. These both led Piguo to have an ever decreasing role and relevance in academic economics during this time and Piguo slowly began to realize his dwindling role as a academic economist from his once superstar like status in the profession. It was painful to read about his bitterness and almost child-like bickering with others in academia. You could tell that he wasn't too happy during this period of his life.
Luckily, partly because of these developments and the rise of the Labour party after WWII, Piguo had a bit of a redemptive arc. Realizing his lack of relevance in academia, he began to spend more of his energies writing pieces directed towards the common man and educating the populace on economics. He also was unafraid to speak and express his views on ethics, politics, and economics in his writings as he was no longer the reserved academic. As a result, he was able to express many of the views that he would have never have expressed, during a time of the UK's rapid transition to a welfare state and rekindle his title as "the first serious optimist".
This book was a really interesting look at the pressures many academics face in presenting their views the public, how their views can easily change due to their status in the profession, and how they can change due to the changing social/political developments during their time.
May 19, 2018
Really inspiring book about a largely-forgotten economist who has had a bit of a renaissance as of late. Pigou is a quite incredible figure who just simply got it right. If more people were willing to embrace his thoughtful, deliberate approach, they would likely come to smarter conclusions: that economies need government intervention to function well and that the social goals of poverty and inequality alleviation do not occur on their own.
Displaying 1 - 2 of 2 reviews