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

This chapter delves into Léon Walras's unique conception of free competition, as presented in his 'Éléments D’Économie Politique Pure'. It contrasts his ideas with modern interpretations of 'pure and perfect competition'. Walras views free competition as a natural behavior of rational individuals, facilitated by specific institutions that allow them to fully exercise their liberties. The text explores the liberties in the pure theory of exchange and production, and the rules that ensure the ideal functioning of markets. It also discusses the distinction between 'fact', 'idea', and 'principle' of competition, and how Walras's ideas have been interpreted and misinterpreted. The chapter examines the transition from concrete markets to the 'ideal type' market, and the specificities of 'absolute free competition'. It concludes by emphasizing the natural behavior of free individuals in markets and the institutions that enable their liberties. This chapter provides a comprehensive overview of Walras's ideas on competition, offering valuable insights into the evolution of economic thought and the historical context of market theories.