ABSTRACT
The nineteenth-century conception of economic equilibrium was a long-period equilibrium in which the profit rates on all capital goods were equalized through competition. (While Walras seems to have thought of long-period equilibrium as a realized state of the economy, Smith, Ricardo, and Marx seem to have regarded it more as a benchmark or center of gravity around which actual prices and profit rates would gravitate.) But in certain key respects the marginalist principle of pricing by scarcity and marginal cost of producing goods contradicts this longstanding methodological precept. From a marginalist point of view the returns to capital goods are just rents (more often in the case of capital called quasi-rents),like the return to land, and there is no reason to think at any point in time that the composition of the capital stock is such that the quasi-rents on each type of capital good will represent the same rate of return on its reproduction cost. Walras encountered this logical problem and grappled with it but was unable to come to a completely satisfactory solution.
