Abstract

The article aims to demonstrate Edith Penrose's distinctive approach to economics, particularly her independence of thought, as reflected in The Theory of the Growth of the Firm. It considers the influences on the evolution of her thinking, and what might be called her humanistic approach, by examining how her personal history contributed to her intellectual development. Humanistic economics was not current in the formative years of Edith's thinking, but there is no doubt that her perspective introduced elements of psychology, moral philosophy, political science, and sociology into traditional economic thought. In her inaugural lecture at School of Oriental and African Studies Penrose elucidated her view that economics was not just a technique of analysis but the application of that technique to real world problems in which many factors other than those admitted in theoretical models must be taken into account.

The confidence to challenge standard theory arose from her personal experience of the turmoil of the twentieth century: working with the International Labour Organisation before World War II, supporting the US Ambassador to the United Kingdom throughout the war years and involvement in the initial planning of the institutions of the United Nations and the influence of exceptional individuals, her husband Ernest F. Penrose, John Winant, and her colleague and collaborator at Johns Hopkins, Fritz Machlup.