Disintegration Of Cambridge School

The Disintegration of the Cambridge School

The weaknesses in Marshall's system, together with developments in the economy, soon led his pupils into lines of thought which differed from those taken by the master and from one another. Particularly after 1920 and the following years of depression, the inadequacy of Marshall's treatment of the business cycle and of money and credit became more apparent.
First came the development of "imperfect-competition" theory by such Cambridge economists as Sraffa, Shove, Harrod, and Robinson.

Partly overlapping this movement, came the development of "monetary economics" closely associated with the savings-investment approach and with the problem of business cycles. D. H. Robertson, while carrying on the Marshallian doctrine in earlier writings, developed the idea of discontinuous change and period analysis, accepting a loanable-funds theory of interest. R. F. Kahn, J. M. Keynes and his followers, such as R. F. Harrod, are other Cambridge economists who have departed from the Marshallian traditions concerning equilibrium and emphasis of "real" wealth and income.

Working along with the change in economic conditions that resulted from war and depression, there is doubtless to be considered the infiltration of economic ideas from Scandinavian countries, Italy, and America. English economic theory, particularly after the first decade of the century, was fertilized by thought stemming from Wicksell, Cassell, Pareto, and Fisher.
Nor is the existence within England of influences other than Marshall's school to be overlooked. The criticisms of Edwin Cannan had their effect. R. G. Hawtrey was influential in developing a monetary theory of business cycles. And J. It. Hicks and N. Kaldor from outside the Cambridge group have exercised outstanding influence on most phases of recent theory, including imperfect competition and the "new welfare economics."