Léon Walras

Léon Walraswas a French-born economist whose work Éléments d’économie politique pure (1874–77; Elements of Pure Economics) was one of the first comprehensive mathematical analyses of general economic equilibrium. Because Walras wrote in French, his work did not get much attention in Britain, the hotbed of 19th-century economics; however, today he, Karl Marx, and David Ricardo are the most widely studied 19th-century economists.

After having twice failed the entrance examination to the École Polytechnique in Paris for lack of preparation in mathematics, Walras entered the École des Mines in 1854. Leaving school after a year, he tried literature unsuccessfully. In 1858 his father, the economist Auguste Walras, persuaded him to devote his life to economics. Lacking the necessary formal training, however, Walras could not get a university position. After a brief flirtation with journalism, he worked for several business firms unsuccessfully. Sharing in the popular belief that cooperatives offered an alternative to the revolutionary activity in western Europe, Walras and Léon Say in 1865 began a bank for producers’ cooperatives, of which Walras became managing director. The two men also began to publish a monthly journal on cooperatives, Le travail (“Work”), in 1866. Both the bank and the periodical failed in 1868, but two years later Walras was appointed to the chair of political economy at the Academy of Lausanne, Switzerland. He retired in 1892. He is generally credited with having founded what subsequently became known, under the leadership of the Italian economist and sociologist Vilfredo Pareto, as the Lausanne school of economists.

In a theoretical work that assumes a “regime of perfectly free competition,” Walras constructed a mathematical model in which productive factors, products, and prices automatically adjust in equilibrium. In doing so, he tied together the theories of production, exchange, money, and capital. Walras also advocated the abolition of taxes and the nationalization of private land to generate revenue for the government.