The Walras Paradox

Abstract

Some standard interpretations of Leon Walras' political economy are challenged by a study of his philosophical and political ideas. Walras thought that his general-equilibrium theory was both a normative scheme and pure science. This "Walras paradox" is resolved by an understanding of the metaphysical ideas he borrowed from the French "eclectic" philosopher Etienne Vacherot. For Walras, general-equilibrium theory provides the foundations for "scientific socialism," A (non-Marxian) synthesis of liberalism and socialism. This interpretation of general-equilibrium theory shows that common ideas about "neoclassical" economics do not fit Walras.