ABSTRACT
Joseph Schumpeter was not an admirer of Adam Smith. But in his monumental History of Economic Analysis he praises ‘the rudimentary equilibrium theory of chapter 7, by far the best piece of economic theory turned out by A. Smith’ (1954: 189), simply because it was a theoretical predecessor of Walras. While Isnard, Smith, Say and Ricardo ‘struggled or rather fumbled for it’, for Schumpeter it was Walras who made the ‘discovery’ of economic equilibrium, ‘the Magna Carta of economic theory’ (ibid.: 242). Since then, it has been generally accepted that Smith was a forerunner, if not the founder, of general economic equilibrium theory.1 While some consider Walras’s general economic equilibrium to be ‘the peak of neoclassical economics’ (Samuelson 1952: 61), nevertheless Adam Smith is widely seen as the ‘father of our science’. Moreover, the most famous (and most elusive) metaphor in the history of economic thought, the invisible hand, has been interpreted as ‘a poetic expression’ that confirms Smith as ‘a creator of general equilibrium theory’ (Arrow and Hahn 1971: 2). One way or another, microeconomics textbooks too readily link Smith’s invisible hand with some sort of equilibrium.2
