L�on Walras, 1834-1910
The French economist Marie-�sprit L�on Walras (pronounced "Valrasse") has been hailed
by Joseph Schumpeter as "the greatest of all economists" (Schumpeter, 1954: p.827). Walras
was one of the three leaders of the Marginalist
Revolution, even though his greatest work, Elements of Pure Economics, was
published in 1874, three years after those of William Stanley Jevons and
Carl Menger.
Nonetheless, alone among the three revolutionaries, L�on Walras set forth
the new "marginalist" or "Neoclassical" theory in a formal
general equilibrium setting. Thus, he endowed it with the multi-market
considerations Jevons had largely avoided and the mathematical
precision Menger had eschewed. L�on Walras is widely
and rightfully regarded as the father of general
equilibrium theory.
From any biography, the principal elements of Walras's life can be
told. He was the son of the French proto-marginalist economist and
schoolteacher, Auguste Walras.
After
spending a Bohemian youth in Paris as a novelist and art critic, L�on Walras soon
followed his father's footsteps on almost every count: he adopted his father's socialist policy
positions
on taxation and land reform (in fact, he was a proponent of outright land nationalization) as well as his
main ideas on economic theory (subjectivist theory of value, the mathematization of economics). After spending
some unfruitful years in the cooperatives movement, Walras was appointed to the
Academy of Lausanne in
1870. It was there that he wrote and published the first edition of his magnum
opus, the Elements of Pure
Economics (1874).
L�on Walras's Elements should be familiar to every modern economist,
as it encompasses much of what is available to us in modern general
equilibrium theory. Walras set out his Elements in progressive
stages of complexity and generality. Its eight parts can be briefly
summarized:
- (1) Walras provides his definition of the scope of economics, subjective value theory
and the mathematical method;
- (2) discusses two-commodity pure exchange where demand and supply are derived from
utility-maximization; his "auctioneer" and the tatonnement process of
stability is introduced here.
- (3) introduces multi-market pure exchange; counts "equations and unknowns" to find
existence; considers multi-market tatonnement with an auctioneer.
- (4) incorporates production (in early editions, with fixed technology; in later
editions, with flexible technology and thus marginal productivity theory) with a no-profit
entrepreneur; shows how the demand for factors is derived as an indirect demand for
goods (see the "Walras-Cassel"
model).
- (5) introduces his theory of capital;
includes capitalization of future earnings and presents
a theory of saving and credit;
- (6) introduces his encaisse desir�e theory of money;
sees money as providing future services and
thus "desired" in a general choice problem;
- (7) considers the continuous market and a growing economy.
- (8) provides reflections on imperfect competition and monopoly.
In the aftermath of the Elements, Walras tried to build up a correspondence with
virtually every important economist of the time, from America to Russia, in an
effort to popularize his new theory. He found sympathizers and followers among several
technically-gifted young Italians (e.g. Barone and Pareto) and Americans (e.g. Moore and Fisher).
However, for the most part,
he was largely ignored or dismissed by contemporary economists and
mathematicians.
In
1893, Walras was succeeded in his chair by his young disciple, Vilfredo Pareto.
The two men formed the core (and some argue the full extent) of what became
known as the Lausanne School".
While they agreed on most theoretical matters, the details of the subsequent
research program were dictated more by Pareto's interests than Walras's original
concerns.
Walras had envisaged his 1874 Elements as part of a larger work.
However, by the 1890s, Walras's mental capacities had begun to fail and it
became doubtful that he would be able to complete this grand oeuvre in
the manner he had originally intended Walras hastily compiled two
volumes, Studies in
Social Economics (1896) and the Studies in Applied Economics (1898).
Although little more than compilations of previously published articles, he
still considered these books complementary to the Elements. Tellingly, the
1874 Elements are subtitled "theory of social wealth",
while his 1896 book is subtitled "theory of the division of social
wealth" and his 1898 book "theory of the production of social
wealth." He regarded all three volumes as integral, indivisible and essential pillars for his
general economic theory.
Unfortunately, most economists dismissed these last two volumes as
"light" stuff or, worse, a mere platform for socialist
politics. Today, as then, the Elements alone is regarded as his
Walras's only "true" contribution. However, some economists
continue to believe that, because his other two volumes were not taken into
account, modern Neo-Walrasian G.E. theory has
not adhered to Walras's original vision, either in general purpose or in
detail.
Modern economists have also dismissed Walras's attempt, in a later (1896)
edition of the Elements, to take credit for the discovery of the marginal
productivity theory of distribution (and denouncing Wicksteed's
claim to priority), not only as lacking any basis in truth but even as
mean-spirited. It is widely acknowledged that Walras learnt this theorem
from Enrico Barone. (although, in a striking
coincidence, Walras had been handed the theorem on a piece of paper from the
Lausanne mathematician, Hermann Amstein, in 1877, but had not understood the
mathematics well enough the make heads or tails out of it!)
The last decade of Walras's life was spent in frustrated loneliness, bitter at
the neglect of his work, incapacitated by senility and mental illness. He died
on January 5,
1910.
Top
Major Works of L�on Walras
-
Francis Saveur, 1858. [bk]
- "De la propri�t� intellectuelle: position de la question �conomique", 1859, Journal des
�conomistes (Dec),
p.392
-
L'�conomie politique et la justice; Examen critique et r�futation des
doctrines �conomiques de M. P.J. Produhon pr�c�des d'une introduction �
l'�tude de la question sociale, 1860. [bk]
- "Philosophie des sciences �conomiques", 1860, Journal des �conomistes,
(v.25, Feb),
p.196
- "Paradoxes �conomiques I", 1860, Journal des �conomistes
(v.28, Dec),
p.373
-
Th�orie critique de l'imp�t, 1861. [bk]
- De l'imp�t dans le Canton de Vaud, 1861. [bk]
-
Les
Associations populaires de consommation, de production et de cr�dit,
le�ons publiques faites � Paris le janvier et f�vrier 1865. 1865. [bk]
- "La bourse et le cr�dit", 1867, Paris Guide,
p.1733
-
Recherche de l'id�al social: le�ons publiques faites � Paris, 1868 [bk]
- "Principe d'une th�orie math�matique de l'�change", 1874, Journal des
�conomistes, (v.34, Apr),
p.5
-
�l�ments d'�conomie politique pure, ou th�orie de la richesse
sociale, 1874 [bk]
- Original 1874 edition: [bk]
- Later French editions: [2nd ed., 1889], [3rd
ed., 1896]; [4th
ed. 1899] [revised "5th" ed. 1926]
- English 1954 (W. Jaff�) translation of 1926 (5th ed): Elements of Pure Economics, or the theory of social wealth
- English 2014 (D. Walker & J. van Daal) translation of 1896 (3rd ed:) Elements of
Theoretical Economics, or the theory of social wealth [pdf].
- "Th�orie math�matique de l'�change: Question de priorit�.
Correspondence entre M. Jevons, Professeur � Manchester et M. Walras,
Professeur � Lausanne", 1874, Journal des �conomistes. (v.34,
Jun),
p.417
- "Review
of Antonio Errera's L'Italia Industriale", 1874, JdE, (v.36,
Nov),
p.329
- "Un nuovo ramo della matematica. Dell' applicazione delle
matematiche all' economia politica", 1876, Giornale degli economisti.
(An.2, v.3, Apr),
p.1
- Th�orie math�matique de bim�tallisme, 1881 (offprint of 1876/81)
- "De la fixit� de valeur de l'�talon mon�taire", 1882, Journal des �conomistes
(Oct),
p.5 [offprint]
-
Th�orie
math�matique de la richesse sociale, 1883. [bk]
- "D'une
m�thode de r�gularisation de la variation de valeur de la monnaie",
1885, Mem Soc Vaudoise de sciences naturelles [offprint]
- "Th�orie de la Monnaie", 1886, Revue scientifique, Pt. 1 (Apr 10,
p.449), Pt.2 (Apr 17,
p.493) [offprint]
-
Th�orie de la monnaie, 1886 [bk]
- "Observations
sur le principe de la theorie du prix de MM. Auspitz et Lieben", 1890,
Rev dEP,
p.320 [reply
by Auspitz & Lieben,
p.559]
- "Notice
autobiographique de L�on Walras",
1893. [first pub. 1965, v.1,
cwp]
-
�tudes d'�conomie sociale; Th�orie de la r�partition de la richesse sociale,
1896. [bk]
- "L'�tat
et le chemin de fer", 1897, Revue du droit public et de la science
politique, Pt. 1 (v.7, May-Jun,
p.417), Pt. 2 (v.8, Jul-Aug,
p.42) [McM]
- �tudes d'�conomie politique appliqu�e; Th�orie de la production de la richesse
sociale, 1898. [bk]
- "Th�orie du cr�dit", 1898, Revue d'�conomie politique,
p.128
- "Sulle equazione della circulazione", 1899, Giornale degli
economisti (Aug),
p.110
- "Cournot et l'�conomique Math�matique", 1905, Gazette
de Lausanne (13 Jul)
- "La Paix par la Justice Sociale et le Libre �change", 1907,
Questions pratiques de L�gislation ouvri�re
- "Leone Walras, Autobiografia", 1908, Giornale degli Economisti,
p.603
- "Un initiateur en �conomie politique, A.A.
Walras", 1908, La Revue du Mois (v.6, Aug),
p.170
- "�conomique et m�chanique", 1909, Bulletin de la Societe Vaudoise de
Sciences Naturelles. [HET]
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Top
Resources on Leon Walras
Contemporary
- "Review
of Walras's Ideal Sociale", 1875, Critique Philosophique
- "Notice
of Walras's Bimetallisme", 1881, JSS of London
- "Th�orie
des Richesses: revue de Th�orie math�matique de la richesse sociale par
L�on Walras et Recherches sur les principes math�matiques de la th�orie des
richesses par Augustin Cournot", by Joseph Bertrand, 1883, Journal des Savants
- "Review of Walras's Th�orie Math�matique" by W.L. (W.
Launhardt or Lexis?) 1885, JNS, v.45,
p.261
- "Review of Walras's Theorie de la Monnaie" by Armando Tartarini, 1887,
GdE (Sep),
p.584
- "The
Mathematical Theory of Political Economy: Review of L�on Walras, �l�ments d'�conomie
politique pure" by Francis Ysidro Edgeworth,
1889, Nature.
- "Review of Leon Walras's Elements d'Economie Politique Pure,
2nd ed", by Arthur T. Hadley,
1889, PSQ (Dec),
p.679 [js]
- "On the Application of Mathematics to Political
Economy: Address of the President of Section F of the British Association
for the Advancement of Science", by Francis Ysidro Edgeworth, 1889, JRSS
- "The Mathematical Method in Political Economy (Auspitz &
Lieben)" by F.Y.E. [Francis Y.
Edgeworth], 1889, Nature, v.40
(July 11),
p.242-44; review of Walras's elements, v. 40 (Sep 5),
p.434-36, "Points at which Mathematical reasoning is applicable to
political economy" (Sep 19),
p.496-509.
- "Review of Walras's Elements", by Secretan, 1889, JNS,
p.637
- "A
propos de la theorie de prix", by A. Beujon, 1890, Revue dEP
- "Review of L�on
Walras, �l�ments d'�conomie
politique pure, 2e �dit.", by Ladislaus von Bortkiewicz,
1890, Revue d'�conomie
politique,
p.80 [HET]
- "La
Th�orie math�matique de l'offre et de la demande et le co�t de production"
by Francis Ysidro Edgeworth, 1891, Revue d'�conomie politique.
- "Une
economiste socialiste (Leon Walras)", G.F. Renard, 1894 Critique de
Combat
- "Review of Walras's Elements d'�conomie
politique pure",1896, Le devenir social, Ann. 2, N.12,
p.1066-7.
- "Review of Walras's �tudes d'�conomie sociale",
by A. Lr., 1897, Revue critique d'histoire et de litt�rature, Ann.
31, p.
159-60.
- "Notice of Walras's �tudes d'�conomie
sociale" , 1897, L'ann�e sociologique, Ann. 1,
p.499-500.
- "Review of Walras's �tudes d'�conomie sociale", 1897, Revue du
droit public et de la science politique,
p.168
- "Walras's Etudes d'economie sociale" by E. Einarsen, 1897,
ZfVSV,
p.651
- "Notice of Walras's Etudes d'Economie Sociale", 1898, Ann�e sociologique,
p.499
- "Notice of Walras's �tudes d'�conomie politique appliqu�e"
, 1899, L'ann�e sociologique, Ann. 3, p.498-9. [HET]
- "Review of Walras's' �tudes d'�conomie politique appliqu�e" by Charles
Gide, 1899, Revue d'EP,
p.102
- "Review of Walras's Elements d'�conomie
politique pure" by C.A. Laisant, 1901, Revue g�n�rale des sciences pures et appliqu�es,
T. 12, p.1082
- "Walras,
Marie Esprit Leon" by C.P.S. (C.P. Spanger) in R.H. Inglis Palgrave's
Dictionary, 1894-1901
- "Letter from Jules Ferry to
Leon Walras", July 19, 1887, in J. Ferry, Lettres : 1846-1893.
- "Walras,
M.E. L�on", by C.P.S. (C.P. Spanger) in R.H. Inglis Palgrave, editor,
1894-1899, Dictionary of Political Economy
[1918 ed.]
- "Walras,
M.E. L�on", in J. Conrad et al, (1891-94)
Handw�rterbuch der Staatswissenschaften [2nd ed, 1898-1901]
- "Walras,
M.E. L�on", in 1911 Encyclopaedia Britannica
- "Personal and Miscellaneous Notes: L�on Walras", by I.F. (Irving
Fisher), 1910, Bulletin of the AEA (Jun),
p.143
Modern
- 1934 Econometric Society tribute to Lausanne:
First
Draft, Final
Version
-
The
L�on
Walras website by G.L. Fonseca [defunct links until I find
files - it was the first website I set up!]
Biography of L�on Walras
by G.L. Fonseca
Bibliography of L�on
Walras's Works by G.L. Fonseca
Walrasiana:
Selected secondary works on L�on Walras by G.L. Fonseca
- "L�on
Walras" by Donald A. Walker, 1987, New Palgrave [online]
- "Edgeworth versus Walras on a Theory of Tatonnement", by Donald A. Walker,
1987, EEJ [pdf]
- "Institutions and Participants in Walras's Model of Oral Pledges
Markets", by Donald A. Walker, 1990, Revue �conomique [pdf]
- "The Walras Paradox" by Roger Koppl, 1995, EEJ [pdf]
- "One Theory
or Two? Walras's Critique of Ricardo" by Heinz Kurz and Neri Salvadori,
2002, HOPE [pdf]
- Association Internationale L�on Walras [website]
- Centre d'�tudes
interdisciplinaires Walras Pareto, University of Lausanne [website]
- Centre
Auguste et L�on Walras
at Universit� Lumi�re Lyon 2 [defunct link]
- Les �uvres �conomiques compl�tes d�Auguste et de L�on Walras, 2006
[announcement
pdf]
- "Review of Les �uvres �conomiques compl�tes" by Jan van Daal and D.A.
Walker, 2007, Revue d'Econ Pol, [online]
- Bibliography
of Walras at Brisbane, UK
- Walras
page at McMaster
- Walras
entry at IESS [encyclopedia.com]
- Walras
entry at Concise Encyclopedia of Economics, LibertyFund
- Walras entry
at Britannica
- Wikipedia
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All rights reserved, Gon�alo L. Fonseca