Léon Walras

Marie-Esprit-Léon Walras (December 16, 1834 – January 5, 1910) was a French mathematical economist. He formulated the marginal theory of value, independently of William Stanley Jevons and Carl Menger, and pioneered the development of general equilibrium theory.

Léon Walras.

Quotes

• I say that things are useful whenever they can be put to any use at all; whenever they are seen to be capable of satisfying a want. In this connection, there is no need to consider the subtle shades of meaning classified in ordinary language under terms ranging from the necessary to the useful, from the useful to the agreeable, from the agreeable to the superfluous. For present purposes, necessary, useful, agreeable and superfluous simply mean more or less useful. Furthermore, we need not concern ourselves with the morality or immorality of any desire which a useful thing answers or serves to satisfy. From other points of view the question of whether a drug is wanted by a doctor to cure a patient, or by a murderer to kill his family is a very serious matter, but from our point of view, it is totally irrelevant. So far as we are concerned, the drug is useful in both cases, and may even be more so in the latter case than in the former.
  • Léon Walras, Elements d'économie pure, ou théorie de la richesse sociale, 1874, Translation, Routledge, 1954/2013, p. 65.

• It took from a hundred to a hundred and fifty or two hundred years for the astronomy of Kepler to become the astronomy of Newton and Laplace, and for the mechanics of Galileo to become the mechanics of d'Alembert and Lagrange. On the other hand, less than a century has elapsed between the publication of Adam Smith’s work and the contributions of Cournot, Gossen, Jevons, and myself.
  • In : John Cunningham Wood (1993), Léon Walras: The life of Léon Walras and perspectives on his thought. Taylor & Francis, p. 32-33.

Quotes about Léon Walras

• L. Walras first formulated the state of the economic system at any point of time as the solution of a system of simultaneous equations representing the demand for goods by consumers, the supply of goods by producers and the equilibrium condition that supply equal demand on every market.
  • Kenneth J. Arrow, and Gerard Debreu. "Existence of an equilibrium for a competitive economy." Econometrica: Journal of the Econometric Society (1954): p. 265.

• The full recognition of the general equilibrium concept can unmistakably be attributed to Walras (1874-1877), although many of the elements of the neoclassical system were worked out independently by W. Stanley Jevons and by Carl Menger. In Walras' analysis, the economic system is made up of households and firms. Each household owns a set of resources, commodities useful in production or consumption, including different kinds of labor. For any given set of prices a household has an income from the sale of its resources, and with this income it can choose among all alternative bundles of consumers’ goods whose cost, at the given prices, does not exceed its income. Thus, Walras saw the demand by households for any consumers’ good as a function of the prices of both consumers’ goods and resources. The firms were — at least in the earlier versions — assumed to be operating under fixed coefficients. Then the demand for consumers’ goods determined the demand for resources; and the combined assumptions of fixed coefficients and zero profits for a competitive system implied relations between the prices of consumers’ goods and of resources. An equilibrium set of prices, then, was a set such that supply and demand were equated on each market; under the assumption of fixed coefficients of production, or more generally of constant returns to scale, this amounted to equating supply and demand on the resource markets, with prices constrained to satisfy the zero-profit conditions for firms. Subsequent work of Walras, J. B. Clark, Wicksteed, and others generalized the assumptions about production to include alternative methods of production, as expressed in a production function. In this context, the prices of resources were determined by marginal productivity considerations.
  • Kenneth Arrow, "Economic Equilibrium", in David L. Sills (ed.), International Encyclopedia of the Social Sciences (1968), vol. 4

• I have now... part of the proofs of your work on the Theorie de la Ricliesse Sociale, which you have been so good as to send me... I cannot delay expressing the pleasure with which I find that we have by independent paths reached conclusions which are nearly if not quite the same. I flatter myself with the hope that... we have both reached the truth, which must be one. ...[A]fter seeing a full statement of your mode of arriving at the equations of exchange, I cannot for a moment entertain the least doubt of the entire independence of your own researches... As to the question of priority of publication, it is... of less importance than that of the truth of the theory... I have always... attached much importance to this mathematical theory of economy, believing it to be the only basis upon which an ultimate reform of the science... can be founded and a solution of many difficult problems effected. I cannot, therefore, help accepting your very kind offer to make known in the Journal des Economistes... that I had already gone over part of the same ground... in a different manner. ...I feel it to be most honourable in you, after seeing merely the brief sketch of my theory as printed in the Statistical Journal for 1866, to acknowledge at once my priority on some points; and I shall be glad to learn your opinion of the much fuller statement of my views contained in the Theory of Political Economy, of which I have lately posted you a copy. ...I shall have much pleasure in doing what I can to make known in England your own excellent statement of the theory of exchange ...I trust that the theory ...will thus become the origin ...between us of many friendly letters.
  • William Stanley Jevons, Letter to Walras (May 30, 1874) Letters and Journal of W. Stanley Jevons (1886) p. 305-306.

• In my opinion, Walras' theory of exchange and production is not the end and aim of his study but an overture to his general equilibrium theory of capital formation and circulation. Therefore, what we have to do first of all is to elaborate in economic, rather than mathematical terms his theory of growth and money, which in Walras' work was not complete. In reconsidering Walras from such a point of view, he appears as an economist who was comparable with Marx and who anticipated Keynes.
  • Michio Morishima, Walras' Economics: A Pure Theory of Capital and Money (1977), Preface

• The landmark figure in general equilibrium theory was French economist Léon Walras (1834–1910), whose complex simultaneous equations essentially created this branch of economics in the nineteenth century. Back in the eighteenth century, however, another Frenchman, François Quesnay (1694–1774), was groping toward some notion of general equilibrium with a complex table intersected by lines connecting various economic activities with one another. Karl Marx, in the second volume of Capital, likewise set forth various equations showing how particular parts of a market economy affected numerous other parts of that economy. In other words, Walras had predecessors, as most great discoverers do, but he was still the landmark figure in this field.
  • Thomas Sowell, Basic Economics, 4th ed. (2010), Ch. 25. The History of Economics.