It is well known that Marshall's Principles of Economics contained a number of innovations in economics which became part of the toolbox of welfare economics and that some of these had their roots in his early writings. The notion of consumer's surplus is a good instance (see Myint 1948 for a classic treatment of this subject). Moreover, Marshall's broad hint at a tax/bounty policy designed to favour increasing returns industries and to penalise those working under diminishing returns was a policy for enhancing growth of output through a state induced shift in resource allocation of productive factors. For Marshall, of course, output growth was advantageous to all classes of society and of particular benefit to the poor. Such an emphasis on output in welfare policy was part of Marshall's classical heritage, since as Myint (1948) has also pointed out in his still very authoritative historical treatment of welfare economics in the 19th and early 20th centuries, the classical approach to welfare economics was heavily output orientated.

On the other hand, it is less well known that some of Marshall's perspectives on social progress, including those that remain unpublished from the material housed in the Marshall papers, embrace aspects of what later became known as the welfare state. In fact, some of his later published views, particularly his 1907 excursus into economic chivalry (Marshall 1907) and the final chapter on progress in the later editions of the Principles (Marshall 1961, Book VI, chapter XIII) contain support for state initiatives to enhance the welfare of society, with special reference to the welfare of the poorest sections of the community.