Léon Walras, Economist and Liberal Socialist

Table of Contents

1. Frontmatter

2. Paternal Legacy and Formation of the Field of Political and Social Economy

   1. Frontmatter

   2. Chapter 1. Auguste Walras as a Transmitter of Ideas: From Jean-Baptiste Say to Léon Walras

      Jean-Pierre Potier

      Abstract

      Auguste Walras’s role as an “initiator in political economy” has often been recalled by his son and both their blood and theoretical lineage has been the subject of discussion since the end of the xix^th century.

   3. Chapter 2. From the Theory of Five Stages to the “Industrial and Commercial Regime”

      Jean-Pierre Potier

      Abstract

      In this chapter, we will examine how Léon Walras considers the progress of humanity, during the xix^th century, towards the most advanced stage of economic history, which he calls the “industrial and commercial regime”. We will thus discover his ideas related to “modern industry” at this stage and examine his understanding of the industrial revolution, the role of machinery, and the relationship between science and industry.

   4. Chapter 3. Taxonomy of Sciences and Divisions of “Political and Social Economy”: An Attempt at Reconstruction

      Jean-Pierre Potier

      Abstract

      Throughout the xix^th century, attempts to classify the sciences multiplied, particularly in France, a field of research that fascinated many thinkers. Léon Walras, for his part, remained interested in it throughout his life.

3. Pure Economics and Its Reception

   1. Frontmatter

   2. Chapter 4. Genesis of a Masterpiece: The Theory of General Economic Equilibrium

      Jean-Pierre Potier

      Abstract

      After examining the taxonomy of sciences used by Léon Walras, it is necessary to consider the genesis of the general economic equilibrium theory, widely considered as his “masterpiece”.

   3. Chapter 5. The Conception of Free Competition in the Éléments D’Économie Politique Pure

      Jean-Pierre Potier

      Abstract

      Very often, contemporary economists equate the Walrasian “free competition” with “pure and perfect competition” as a market structure of the neo-classical canon. In this chapter, we will seek to show that for Walras, free competition is essentially a natural behaviour of rational and free individuals, having specific institutions that allow them to fully exercise these liberties.

   4. Chapter 6. An Early Reception of Pure Economics in Italy: The Correspondence with the “Lombard-Venetians”

      Jean-Pierre Potier

      Abstract

      “The correspondence of an author is always a valuable source of knowledge about his personality, the development of his work, and the society in which he lives and acts.” With these words, Henri Bartoli (1990, p. 1088) began a review of a collection prepared by Giovanni Busino, L’Italia di Vilfredo Pareto: Economia e società in un carteggio del 1879–1924.

   5. Chapter 7. The Reception of Pure Economics in France (1873–1926)

      Jean-Pierre Potier

      Abstract

      A few months before Léon Walras’s death, on 10 June 1909, a ceremony of his Jubilée cinquantenaire d’économiste took place at Lausanne University. On this occasion, a group of French economists paid homage to him at this university.

4. Reforming the Teaching of Political Economy

   1. Frontmatter

   2. Chapter 8. From Criticism to the Reform Plan for the Teaching of Political Economy in France in the xixth Century

      Jean-Pierre Potier

      Abstract

      Walras thus explains the deplorable state of the teaching of economics by the deliberate behaviour of the dominant bourgeois class, which saw its fortune grow through the protection of the State and customs barriers. He distinguishes two stages in the attitude of this class. In the first phase, political economy has no place, then is barely tolerated; in the second phase, it becomes, on the contrary, a mere instrument in the hands of the bourgeois class, which controls all available chairs.

   3. Chapter 9. Teaching Social and Applied Economics in Lausanne

      Jean-Pierre Potier

      Abstract

      On 12 November 1870, Léon Walras was appointed as an associate (“extraordinaire”) professor of political economy to the Faculty of Law at the Academy of Lausanne. Although the appointment was initially for one year only, the following year (on 24 July 1871), he was promoted to full professor and officially installed in the chair by Louis Ruchonnet, on 20 October 1871.

   4. Chapter 10. Léon Walras and the Commission of the University Library of Lausanne: The Purchases of Books in Economics

      Jean-Pierre Potier

      Abstract

      Shortly after his arrival in Lausanne, one of Léon Walras's priorities was to check the resources of the University Library about books in economics necessary for his teaching, and then to draw up purchase lists. He explained this on 13 June 1871 to Félicité Guillaumin.

5. Critique of “Orthodox” Liberalism and “Empirical” Socialism

   1. Frontmatter

   2. Chapter 11. Ideas and Men: Criticism of the French “Liberal School”

      Jean-Pierre Potier

      Abstract

      Throughout his life, Léon Walras fought against what he termed the "clique currently holding the concession for the exploitation of economics", a school that had managed to apply to economic science the formula "exploitation by monopoly under the mask of liberty". He refers here to the group of economists of the liberal school that was formed during the 1840s and largely dominated French economic thought until the end of the Second Empire. This group would benefit from greater tolerance from the political power after the signing of the free trade treaty between France and England (January 1860).

   3. Chapter 12. Criticism of “Empirical Socialism”: the Cases of Louis Blanc and the Saint-Simonians

      Jean-Pierre Potier

      Abstract

      Throughout his career, Léon Walras had numerous opportunities, while presenting the facets of his own “liberal socialism”, to refute the ideas of the socialists of his time. To refer to these authors, he uses the generic term “empirical socialism”. What typology of currents will he apply in his writings? He always uses an evaluation scale from best to worst. Indeed, he begins with socialists who exhibit “a certain science and a certain critical strength” (“Exposition et conciliation des doctrines sociales”, 1872c, vol. XIII, p. 281), here referring to Saint-Simon and his school, as well as Charles Fourier and his disciple Victor Considérant, the Fourierist school being, according to him, clearly inferior to the first (Cours d’économie sociale, vol. XII, p. 267).

   4. Chapter 13. Léon Walras, Paul Voituron and Constant Leirens at the Editorial Team of Le Travail: the Polemics on Cooperation (1866–1867)

      Jean-Pierre Potier

      Abstract

      During the liberal phase of the Second Empire, Léon Walras became involved in the cooperative movement in Paris, which was then booming and was encouraged by Napoléon III. Initially, he participated with his friend Louis La Cour de la Pijardière in an attempt to establish a credit association called the Banque du Travail. He then joined the project launched by Léon Say to establish the Caisse d’escompte des associations populaires de consommation, de production et de crédit. From April 1865, he served as the appointed administrator of this Caisse. Furthermore, on 5 December 1864, he obtained from the Minister of Public Instruction and Worship, Victor Duruy, the authorisation to deliver three public lectures at the “Cercle des sociétés savantes” on the theory and practice of popular credit, production, and consumption associations.

6. Social Reforms for the Implementation of a Liberal Socialism

   1. Frontmatter

   2. Chapter 14. Organisation of the Labour Market, Labour Legislation, and Social Insurance

      Jean-Pierre Potier

      Abstract

      At the end of his life, in the speech delivered for his fiftieth anniversary as an economist at the University of Lausanne, Léon Walras remarked: First, it is clear that wage determination by means of strikes and lock-outs, i.e., ultimately, by throwing stones against gunshots, is a barbarian behaviour. But it is also clear that for the purpose of replacing it by the determination of prices of various kinds of work with the mechanism of outbidding and underbidding (enchères et rabais), mathematical pure economics would be absolutely necessary (1909c, vol. VII, p. 510).

   3. Chapter 15. Towards the Repurchase of Land by the State and the Abolition of Taxes

      Jean-Pierre Potier

      Abstract

      Among some contemporary philosophers, sociologists, and political scientists, the theme of hybrid forms between liberalism and socialism is always fascinating. Several research attempts to trace back the sources of ideas related to social liberalism and liberal socialism were made from the xix^th to the xx^th century. We will focus on Léon Walras’s specific case.

   4. Chapter 16. Public Services and Natural Monopolies: What Role for the State?

      Jean-Pierre Potier

      Abstract

      For Léon Walras, the question of the “principle” of free competition, its applications, and its “exceptions” falls within the sphere of applied economics. He never claimed to have systematically clarified the areas where free competition should be the rule and the areas where it could not function. In a manuscript, he states on this subject.

   5. Chapter 17. Towards a Political Reform? Universal Suffrage and Professional Representation of Interests

      Jean-Pierre Potier

      Abstract

      Of the four questions of “social science”, Léon Walras claims to have tried to outline the industry and property problems, leaving to other researchers the task of constructing the theories of family and of government, the latter referring to a science of politics, of rational government. But for him, the transition from the ideal to the real, the realisation of the Social Ideal falls within the realm of practice and politics. The scientist does not have to concern himself with it. Politicians must take charge of economic and social reforms, such as the “economic restoration of the State”, which cannot be imposed authoritatively and must be implemented gradually, slowly, and patiently.

7. Backmatter