Studies in Applied Economics

264 Pages·2004·1.91 MB·English

by  Léon Walras

Studies in Applied Economics
StudiesinAppliedEconomicsisanEnglishtranslationof Étudesd’économie
politiqueappliquée(1898)byLéonWalras(1834–1910).
Untilnow,Élémentsd’économiepolitiquepure(1874)wastheonlybookby
Walras available in English (Elements of Pure Economics, 1954). It contains
the theory of general economic equilibrium under free competition, with the
conceptofutilitymaximizationasitscore.Walras’sconclusionwasthatwhere
freecompetitionispossible,itshouldbetherule.
So, in the present book, he advocates protective regulation, within which
economicagentsmaycompetefreely.Forwater,gasorrailwaytransport,for
instance,wherefreecompetitionisimpossible,rulesareformulatedtomaintain
its advantages. Issues such as money, capital, credit, banking and the stock
marketsarealsodealtwith.Thebook’sfinalchapterrecapitulatesthethemes
of Walras’s three main works: Éléments, Études d’économie sociale and this
volume,Étudesd’économiepolitiqueappliquée.
Walras’s aim was to provide an economic blueprint for a social ideal
where poverty and similar evils could be banished. His three main books
include all the elements necessary ‘to complete the mathematical theory of
economicequilibrium’.Unfortunately,thissynthesiswasneverdeveloped,but
the current book sheds light upon this point, providing a unique insight into
LéonWalras’smindandabetterunderstandingofhisÉléments.
This translation was prepared under the auspices of the Centre Auguste
et Léon Walras, Université Lyon-2. Most of the annotations are translations
of those by Jean-Pierre Potier (Centre Walras) in Études d’économie
politiqueappliqué(Paris:Economica,1992).Thesenotesandthetranslator’s
introductionmakethebookindependentlyreadable.
Jan van Daal is an expert on the life and works of Léon Walras. A former
memberoftheEconometricInstituteoftheErasmusUniversityRotterdam,he
isnowattheCentreWalras.Hehasalsowrittenonsuchdiversesubjectsasthe
workofH.H.Gossen,trafficmodelsinDutchinlandnavigation,aggregation
problemsanddemandsystems.

Studies in Applied Economics
Theory of the production of social wealth
Volume I
Léon Walras
Translated and introduced by
Jan van Daal
Englishtranslationfirstpublished2005
byRoutledge
2ParkSquare,MiltonPark,Abingdon,OxonOX144RN
SimultaneouslypublishedintheUSAandCanada
byRoutledge
270MadisonAve,NewYork,NY10016
RoutledgeisanimprintoftheTaylor&FrancisGroup
This edition published in the Taylor & Francis e-Library, 2007.
“To purchase your own copy of this or any of Taylor & Francis or Routledge’s
collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.”
Englishtranslationandintroductorymaterial©2005JanvanDaal
Allrightsreserved.Nopartofthisbookmaybereprintedor
reproducedorutilizedinanyformorbyanyelectronic,
mechanical,orothermeans,nowknownorhereafter
invented,includingphotocopyingandrecording,orinany
informationstorageorretrievalsystem,withoutpermissionin
writingfromthepublishers.
BritishLibraryCataloguinginPublicationData
AcataloguerecordforthisbookisavailablefromtheBritishLibrary
LibraryofCongressCataloginginPublicationData
Acatalogrecordforthisbookhasbeenrequested
ISBN 0-203-92836-9 Master e-book ISBN
ISBN0–415–34617–7(volumeI)
ISBN0–415–34618–5(volumeII)
ISBN0–415–34616–9(two-volumeset)
Contents
Preface xi
Abbreviationsandnotesonthetext xiv
Introduction xv
1 LéonWalras xv
1.1 Factsofhislife xv
1.2 Professionallife xvii
2 Generalideasaboutscience,socialscience
andeconomics xx
2.1 Socialscience xx
2.2 Economics xxi
3 Pureeconomicsandsocialeconomics xxiii
3.1 Freecompetition xxiii
3.2 Generaleconomicequilibrium xxiv
3.3 Tâtonnement xxix
3.4 Socialeconomics xxxii
4 Genesisof Étudesd’économiepolitiqueappliquée xxxiv
4.1 History xxxiv
4.2 Bibliography xxxiv
5 Contentsof Étudesd’économiepolitiqueappliquée xxxvi
5.1 PartI:Money(sevenchapters) xxxviii
5.2 PartII:Monopolies(onechapter) xli
5.3 PartIII:Agriculture,industry,commerce
(threechapters) xliv
5.4 PartIV:Credit(onechapter) xlvi
5.5 PartV:Banking(twochapters) xlvii
5.6 PartVI:Stockmarkets(onechapter) xlix
5.7 PartVII:[Outlineofadoctrine](onechapter) l
vi Contents
6 Conclusion li
Appendices lii
A Walras’sterminologywithregardtocapital lii
B ChronologicalorderofthecontentsofEEPA liv
C AugusteetLéonWalras:œuvreséconomiques
complètes lviii
D Correspondencebetween(A)editions1and2
and(B)thePotiereditionoftheEEPA lix
Notes lxiii
Bibliography lxiv
PARTI
Money 1
1 Goldmoneywithregulatingsilvertoken 3
Notes 14
2 Measuringandregulatingvariationsinthevalueofmoney 17
I CriticalexaminationofMrCournot’sdoctrineon
changesinrelativeandabsolutevalue 17
II Amethodofregulatingthevariationinthevalue
ofmoney 21
III Acontributiontothestudyofpricevariationssince
thesuspensionofsilverécuminting 37
Appendix 45
Notes 49
3 TheoryofMoney:prefaceandintroduction 50
Preface 50
Introduction:replytosomeobjections 54
Notes 63
4 TheoryofMoney:PartIexpositionoftheprinciples 70
I Exchangeandproduction 70
II Proportionalityofvaluestoraretés 71
III Establishingthevalueofthemoneycommodity 77
IV Variationinthevalueofthenuméraireandmoney 82
Notes 86
Contents vii
5 TheoryofMoney:PartIIcriticaldiscussionofthesystems 87
I Systemswithasinglestandardorwithtwoindependent
standards 87
II Thesystemwithadoubleinterdependentstandard,or
bimetallism 89
III Transformationofbimetallismintoagoldmoney
systemwitharegulatingsilvertoken 94
IV Problemsofrealization 97
Notes 100
6 TheoryofMoney:PartIIIstatisticaldesiderata 103
I Determinationofthepriceofsocialwealthin
money 103
II Theconstructionofthecurveofvariationin
thepriceofsocialwealthinmoney 107
III Correctingthecurveofvariationinpriceofsocial
wealthinmoney 110
IV Themonetaryquadriga 116
Note:onthe‘theoryofquantity’ 122
Notes 127
7 Themonetaryproblem 132
I AnoteonthesolutionoftheAnglo-Indian
monetaryproblem 132
II TheAnglo-Indianmonetaryproblem 134
III ThemonetaryprobleminEuropeand
theUnitedStates 138
IV Thebimetallistdanger 143
Notes 152
PARTII
Monopolies 159
8 TheStateandtherailways 161
I Publicservicesandeconomicmonopolies 163
II Railwaysaspublicservicesandeconomic
monopolies 169
III Railwayrates 175
viii Contents
IV Stateinterventioninrailways 180
Note 186
Notes 189
PARTIII
Agriculture,industry,commerce 195
9 Theinfluenceofcommunicationbetweenmarkets
onthesituationofruralcommunities 197
Notes 213
10 Appliedeconomicsandtheprotectionofwages 216
Notes 229
11 Theoryoffreetrade 232
I [Importingwithoutexporting] 232
II [Importingandexporting] 234
III [Internationaltradeandconsumers’utility] 237
IV [‘Free’doesnotmean‘noregulation’] 239
V [Evaluation:France] 241
Notes 244
PARTIV
Credit 247
12 Theoryofcredit 249
I Thenatureofcredit 249
II Long-termandshort-termcredit 252
III Creditsecurities:specialsecurities 256
IV Creditsecurities:generalsecurities 260
V Generalprinciplesofcredit 264
Notes 268
PARTV
Banking 271
13 Mathematicaltheoryofbanknotes 273
I Monetarydepreciationcausedbytheissue
ofbanknotes 273
Contents ix
II Capitalincreasebecauseoftheissueof
banknotes:periodofissue 280
III Impossibilityofliquidatingtheissueofbanknotes 285
IV Thefreedomofthebanks 292
Notes 298
14 ThePostOfficeSavingsBankofViennaand
comptabilismesocial 299
I Schemeofatransferbank 299
II ThePostOfficeSavingsBankofVienna 302
III Comptabilismesocial:thefixedunityofvalue 306
Comptabilismesocial:[legally]enforcedcurrency–
therealroleofaclearingbank 310
Notes 314
PARTVI
Stockmarkets 319
15 Thestockexchange:speculationandagiotage 321
I Definitionoffinancialspeculation 321
II Thenatureofstockexchangeoperations 325
III Effectsofstockexchangeoperations 330
IV Freedomoffinancialspeculation 334
V Abusesoffinancialspeculation 339
VI FinancialspeculationinFrance 345
Notes 350
PARTVII
Outlineofadoctrine 353
16 Outlineofaneconomicandsocialdoctrine 355
I Distinctionbetweenpurescience,moralscience,
appliedscienceandpractice 355
II Purescienceofmanandsociety 360
III Purescienceofsocialwealth 364
IV Moraltheoryofthedistributionofsocialwealth:
repurchaseofthelandbytheState 368