The problem with which this investigation is concerned is that of ascertaining whether or not A. C. Pigou led to the development of a modern school of Welfare Economics. This study has a threefold purpose. The first is to examine the welfare criterion of the classical tradition. The second is to examine the welfare criterion of the neoclassical tradition. The third is to develop a synthesis of classical and neoclassical into a modern welfare criterion. This study concludes that A. C. Pigou has founded a modern school of Welfare Economics. Pigou accomplished this by synthesizing the welfare doctrines of the classical tradition with that of the neoclassical tradition.