This article examines the question of which institutional assumptions underly competitive general equilibrium theory. Extending WalraÕs terminology, the organization of trade hypothesis typical of this theory is called t‰tonnement. Its components and its working principles are analysed comprehensively. The pervasive view, that t‰tonnement is a stylised figure of market forces, is criticized on the grounds (1) that a t‰tonnement economy is a hybrid between a decentralized and a command economy and (2) that a t‰tonnement economy is the epitome of social constructivism, as its creation can be likened to a Hobbesian social contract. Finally, three possible arguments in favor of t‰tonnement are considered, the "realistic", the "benign neglect" and the "lack of alternative" argument. Only the last one is considered as a worthy defence of it.
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