GERRIT GORTER
The present study of economics did not, of course, come out of thin air. Although thinkers in classical Greece already reflected on what we now call economics, it was largely in the eighteenth century that systematic thought on the subject began.
Two conceptual tools—the economic cycle and the idea of the invisible hand—date from that century and are still in use today, both in academic research and in education.
This site contains twenty-five portraits of important economists. Each offers a biographical sketch together with an indication of his (and, in one case, her) significance for the development of economic thought. They claim no more than to provide a first introduction to the lives and works of these pioneers.
These articles originally appeared in Dutch in the Tijdschrift voor het Economisch Onderwijs and were later published on the website of Gerrit Gorter. The English translations are by Folkert Gorter.
Index
François Quesnay
Adam Smith
Thomas Robert Malthus
Jean-Baptiste Say
David Ricardo
Antoine Augustin Cournot
John Stuart Mill
Karl Marx
Walras
Carl Menger
Alfred Marshall
Vilfredo Pareto Eugen von Böhm-Bawerk
Knut Wicksell
Max Weber
Irving Fisher
Sam de Wolff
John Maynard Keynes
Joseph Alois Schumpeter
Joan Robinson
Jan Tinbergen
John Hicks
John Kenneth Galbraith
Milton Friedman
Paul Samuelson
Walras
France 1834–1910
Marie Esprit Léon Walras was born in 1834 in Normandy. At first, it did not seem likely that he would go on to become a renowned economist. He trained as a mining engineer and then tried his hand at writing — producing an unsuccessful novel and a few short stories. His father, Antoine Auguste, was, incidentally, a reasonably well-known economist at the time and had once been a student of the later well-known economist Augustin Cournot.
It was his son Léon who fully grasped the significance of Cournot’s work. As early as 1838, long before leading economists were ready for it, Cournot had understood that mathematics could serve as an important tool for representing economic relationships. He also already understood that the field needed to move in the direction of general equilibrium analysis, but he was unable to carry out that task himself. It would become Walras’ life’s work.
The classical economists made use of so-called partial equilibrium analysis — that is, they studied equilibrium in a single market. An economist like Marshall, however, understood very well that in economics, everything is interconnected. An increase in demand in one market affects not only the price of the product in question but also the prices of other products. But Marshall was a practical man and believed that you simply couldn’t do everything at once. That’s why he introduced the ceteris paribus clause, allowing the surrounding conditions of a given market to be temporarily bracketed off.
Walras believed it was possible to do everything at once and developed a theory that linked all markets together. The underlying question was whether a general equilibrium was possible. Walras used the metaphor of the auctioneer — Smith’s Invisible Hand in another guise. At an auction where n goods are traded, the auctioneer would continue announcing price vectors until a “set” of prices was found at which all n markets were in equilibrium. All in all, a general equilibrium was indeed possible according to Walras — fortunately so, for otherwise the free market economy would be in a state of perpetual chaos.
After working for a railway company and a few banks, he succeeded in securing a professorship in Lausanne, Switzerland, in 1870. There he developed his mathematically inclined theories, which were not particularly well received. He nevertheless persisted, and it was not until 1892 that he was forced to resign. It wasn’t just the mathematical form in which he cast his theories that provoked resistance; his subjective theory of value and political ideas such as land nationalization likewise met with little approval.
In his personal life, Walras suffered the loss of his wife. In 1884, he remarried a wealthy widow, which made him financially independent. In Lausanne, Walras had to teach law students, who showed little interest in his admittedly rather abstract theories. It was clear that Walras couldn’t fully express himself in his teaching. That may well be the reason he corresponded with virtually every economist of note. He also had many others read his unpublished work. Through this extensive network of long-distance contacts, he nevertheless succeeded in making his ideas widely known. He would continue to do so until his death in 1910.
Walras seems to have been somewhat embittered by the limited success of his theories — especially that of his main work, Éléments d’économie politique pure ou théorie de la richesse sociale, published in 1874. In a biographical essay, Joseph Schumpeter — who, incidentally, considered Walras the greatest economist of all time — wrote about “… the shadow which the indifference to his written work threw on the last thirty years of his life. It is an old story. The fate of truth as well as that of beauty is a sad one on this earth.” Walras knew the feeling all too well.