La Teoria dell'Equilibrio Economico Generale: Walras, Pareto e i Neo-Walrasiani

This paper shows that two different conceptions of economic equilibrium coexist in the theory of general economic equilibrium, as put forward by Walras over the last thirty years of the nineteenth century: a conception of equilibrium as a ‘balance of forces’, on the one hand, and a conception of equilibrium as ‘compatibility of plans’, on the other. Walras, who starts from the first conception in his early theoretical drafts (1871), in developing his theoretical system strives to progressively enhance the role played by the second conception, without ever fully succeeding in his attempt; so that significant traces of the original duplicity persist even in the fourth edition of the Éléments (1900), the last to be published during Walras’s life. Pareto faithfully enough adheres to Walras’s analytic standpoint in his Cours (1896-97), paying himself a price to the ambiguous conception of equilibrium marring Walras’s Éléments. Yet, a few innovative elements, which already peep out in the Cours, will fully blossom in Pareto’s more mature masterpiece, the Manuale di economia politica (1906), whose French edition, the Manuel (1909), crowns Pareto’s theoretical achievements in economics: therein Pareto embraces the conception of equilibrium as a configuration of optimally chosen and mutually consistent plans, eventually succeeding in almost completely erasing the older conception of equilibrium as a ‘balance of forces’. The so-called ‘neo-Walrasian research program’, started by Hicks’s Value and Capital (1939) and fully developed by Arrow, Debreu and other theorists in the 1950s and the following decades, consistently endorses the conception of equilibrium as ‘compatibility of plans’: from this point of view, as well as in a number of related features, the ‘neo-Walrasian research program’ owes more to Pareto’s mature approach than to Walras’s original one, so that it should more appropriately be labelled as the ‘neo-Paretian research program’.