Industrial Leadership, Market Power and Long-Term Performance: Marshall’s and Keynes’s Appreciation of American Trusts

During their lives and careers, both Marshall and Keynes visited the United States and expressed views on American capitalism. Marshall visited the US in 1875, before the advent of the trust question, and then followed the development of the American industrial world, on which he gave his final word in Industry and Trade. Meanwhile, Keynes had begun to develop his own personal relationship with America, which became very close after his visits during the 1930s, when Keynes began to invest in Wall Street on a large scale. In this paper, we argue that there is “a family resemblance” in Marshall’s and Keynes’s views on America, as they shared a common appreciation of American trusts, weighting the advantages of a large industrial organization more than the loss of competitive edge. In 1875, Marshall was struck by the deliberateness and adaptability of the American people, and even though he expressed some scepticism about the future of trusts and big business during the 1890s, his confidence in the leaders of American industry and their dynamism resurfaced in Industry and Trade, where he described the leaders of big business in America as inspired by the same spirit of innovation he had observed in 1875. The ideas that Keynes expressed about Roosevelt and the New Deal, and his choices as an investor in the US market during the 1930s, seem to reflect a similar view. While we see no direct link connecting Keynes’s views on America during the 1930s with his apprenticeship with Marshall in 1905, we see this latter episode as the starting point of a longer process, in which Keynes could observe the evolution of Marshall’s opinions on America, possibly being influenced by it.