Arthur Pigou

It is not sufficient that the State should prevent the production of things that are bad; it must also encourage the production of things that are good.

The most important single factor in determining the general level of employment is the volume of investment.

The essence of the problem of unemployment is that, at the ruling rate of wages, there are more people seeking work than there are jobs available.

When there is a divergence between marginal social net product and marginal private net product, a tax or bounty is appropriate.

The State should interfere only when the free play of economic forces fails to secure the maximum social advantage.

The national dividend is the objective counterpart of the national income.

The true measure of economic welfare is not the size of the national dividend, but the satisfaction derived from it.

The ideal output of any commodity is that at which the marginal social net product is equal to the marginal social cost.

Externalities are costs or benefits that are not reflected in the market price of a good or service.

The existence of external economies or diseconomies constitutes a prima facie case for State intervention.

The problem of unemployment is essentially a problem of disequilibrium in the labour market.

The general level of prices is determined by the quantity of money in circulation and the velocity of its circulation.

Inflation is a monetary phenomenon, but it has real effects on the distribution of income and wealth.

The object of economic science is to discover how the maximum satisfaction of human wants can be attained.

The State has a duty to correct market failures and to promote the general welfare.

The concept of 'welfare' is not purely economic; it embraces all aspects of human well-being.

The marginal utility of money diminishes as a person's income increases.

Progress in economic science consists in the gradual approximation of theory to reality.

The ultimate aim of economic policy is to increase the sum total of human happiness.

The problem of distribution is as important as the problem of production.