British theorists in the “Cambridge tradition.” His Principles of
Economics, published in 1890, replaced Mill’s Principles as the
dominant economics textbook of English-speaking universities.
Marshall institutionalized modern marginal analysis, the basic
concepts of supply and demand, and perhaps most importantly
the notion of economic equilibrium resulting from the
interaction of supply and demand. He also pioneered partial
equilibrium analysis—examining the forces of supply and
demand in a particular market provided that all other
influences can be excluded, ceteris paribus.
Although many of the ideas had been put forward by earlier
writers, Marshall was able to synthesize the previous analyses
of utility and cost and present a thorough and complete
statement of the laws of demand and supply. Marshall refined
and developed microeconomic theory to such a degree that
much of what he wrote would be familiar to students of this
textbook today.
It is also interesting to note that although Alfred Marshall and
Leon Walras were simultaneously expanding the frontiers of
economic theory, there was almost no communication between
the two men. Though Marshall chose partial equilibrium
analysis as the appropriate method for dealing with selected
markets in a complex world, he did acknowledge the
correctness of Walras’s general equilibrium system. Walras, on
the other hand, was adamant (and sometimes rude) in his