The ‘Socialism’ of Léon Walras and His Economic Thinking

. Léon Walras was one of the few outstanding 19th century economists who, though as a theoretician belonged to the mainstream of orthodox economics, expressed views which at one time were considered to be too radical. He advocated in particular the nationalization of land as the solution to the social problem. This would generate sufficient revenue to government to enable it to do away with taxing income derived from wages and salaries. As a result workers would be in a position to invest their untaxed income and thus acquire their rightful share in the national wealth. Contrary to what many have argued, such ‘socialistic’ policy was not incompatible with Walras’ theoretical model of perfect competition. In the absence of private ownership of land and natural resources, there would be no place for big enterprises and monopolies. His great compromise was: allow social reforms in the realm of distribution, but promote lassser‐faire in the production of goods and services. Walras was convinced that if, on top of a radical land reform, the State sought to secure the working of a free competitive system, then the economic system could function very closely to the theoretical model. Though there are flaws in his proposals, his ideas no longer appear as preposterous as they did in his own time.