Table Of ContentLionel Robbins on the Principles of
Economic Analysis
Lionel Robbins (1898–1984) is best known to economists for his Essay on the
Nature and Significance of Economic Science (1932 and 1935). To the wider
public he is known for the ‘Robbins Report’ of the 1960s on Higher Education,
which recommended a major expansion of university education in Britain.
However, throughout his academic career – at Oxford and the London School of
Economics in the 1920s, and as Professor of Economics at the School from 1929
to 1961 – he was renowned as an exceptionally gifted teacher. Generations of
students remember his lectures for their clarity and comprehensiveness and for his
infectious enthusiasm for his subject.
Besides his famous graduate seminar his most important and influential courses
at the School were the Principles of Economic Analysis, which he gave in the
1930s and again in the late 1940s and 1950s, as well as the History of Economic
Thought, from 1953 until long after his official retirement. This book publishes for
the first time the manuscript notes Robbins used for his lectures on the Principles
of Economic Analysis from 1929/30 to 1939/40. At the outset of his career he took
the advice of a senior colleague to prepare his lectures by writing them out fully
before he presented them; the full notes for most of his pre-war lectures survive
and are eminently decipherable.
Since he made two major revisions of the lectures in the 1930s the Principles
notes show both the development of his own thought and the way he incorporated
the major theoretical innovations made by younger economists at LSE, such
as John Hicks and Nicholas Kaldor, or elsewhere, notably Joan Robinson. He
intended to turn his lecture notes into a book, abandoning the project only when
he was asked to chair the Committee on Higher Education in 1960. This volume
is not exactly the book he wanted to write, but it is a unique record of what was
taught to senior undergraduate and graduate economists in those ‘years of high
theory.’ It will be of interest to all economists interested in the development of
economics in the twentieth century.
Susan Howson is Emeritus Professor of Economics at the University of
Toronto and a Fellow of Trinity College Toronto, Canada. She is the author of
the distinguished biography, Lionel Robbins, published in 2011. Having written
many articles on the history of economic policy in Britain, on the life and work
of Lionel Robbins and on James Meade, she is now working on a biography of
James Meade.
Routledge Studies in the History of Economics
For a full list of titles in this series, please visit www.routledge.com/series/SE0341
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192 Economics, Ethics, and Ancient Thought
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193 Ricardo on Money
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194 Natural Law and the Origin of Political Economy
Samuel Pufendorf and the History of Economics
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195 Ricardo and International Trade
Edited by Shigeyoshi Senga, Masatomi Fujimoto, and Taichi Tabuchi
196 Economics, Entrepreneurship and Utopia
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197 War in the History of Economic Thought
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198 Schumpeter’s Price Theory
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199 Lionel Robbins on the Principles of Economic Analysis
The 1930s Lectures
Authored by Lionel Robbins
Edited by Susan Howson
Lionel Robbins on
the Principles of
Economic Analysis
The 1930s Lectures
Authored by Lionel Robbins
Edited by Susan Howson
First published 2018
by Routledge
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© 2018 selection and editorial matter, Susan Howson and Anne Johnson
for material by Lionel Robbins
The right of Susan Howson to be identified as the author of the this work
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ISBN: 978-1-138-65419-8 (hbk)
ISBN: 978-1-315-62337-5 (ebk)
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For Anne and Christopher
Contents
Editor’s introduction xi
PART I 1929–31
Introduction 1
1 The framework of economic analysis 3
2 The conception of equilibrium 9
General outline of equilbrium analysis 17
3 Equilibrium of simple exchange 19
4 Equilibrium of simple exchange (continued) 26
5 Equilibrium of multiple exchange 34
6 Equilibrium of production: factors fixed 42
7 Equilibrium of production: factors fixed (continued) 49
8 Production: factors flexible 57
9 Production: factors flexible: labour supply (continued) 65
10 Equilibrium of production: factors flexible: material factors 74
11 Equilibrium of production: factors flexible: material
factors (continued) 81
12 Interest rates, capitalization and the equilibrium of
production through time 90
13 The supply of material factors (continued) 96
viii Contents
14 Supply of material factors (continued) 105
15 General review of equilibrium theory 112
15* Price relationships in the economic equilibrium [1931/32] 120
Special topics 127
16 Consumers surplus 129
17 The laws of returns 136
18 Returns and Costs 145
19 Costs: definitions and the conditions of equilibrium 150
20 Costs: the supply curve and variations in demand 157
21 Rent, quasi rent and costs 164
22 Profits 170
PART II 1932/33–1934/35
Introduction 179
1 Preliminary injunctions 181
2 The nature of economic analysis 182
3 The divisions of equilibrium analysis 184
General outline of equilibrium analysis 189
4 Valuation and exchange: individual disposition of goods 191
5 Valuation and exchange: simple exchange 194
6 Production: introduction 198
7 Introduction: factors fixed (acapitalistic) 199
8 Capitalistic production 200
9 The theory of interest 201
10 The theory of capital 202
Contents ix
PART III 1935/36–1939/40
Introduction 207
1 The development of scientific economics 209
2 19th century economics 211
3 The subject matter of economics (1934–35) 213
4 Ends and means 216
Statics 221
5 Valuation and exchange: introduction 223
6 Individual valuation 226
7 Exchange continued: barter between two individuals 239
8 Valuation and exchange: multiple exchange 246
9 Production: factors fixed: simple 251
10 Production: non competing groups 254
11 Joint production: fixed coefficients 262
12 Joint production: the laws of returns 264
13 Joint production 269
14 Monopoly 274
15 Monopoly and distribution 278
16 Complex production (continued): joint supply 280
17 Complex production: oligopoly 283
18 Capitalist production: conceptual 286
19 Time preference 290
20 Capitalistic production: conditions of equilibrium 292
21 Equilibrium capitalist production 294
22 Production: labour supply 299
23 The theory of rent 301
