ABSTRACT
Walras’s point of view In Walras’s Elements of Pure Economics, we find only a very brief reference to economic breakdowns, which are seen as equilibrium disturbances of unspecified origin. ‘For, just as a lake is, at times, stirred to its very depths by a storm, so also the market is sometimes thrown into violent confusion by crises, which are sudden and general disturbances of equilibrium’ (Walras 1984: 381). Nothing is said about the nature of these sudden and general disturbances, Walras’s only suggestion being that ‘[t]he more we know of the ideal conditions of equilibrium, the better we shall be able to control or prevent these crises’ (ibid.: 381). We are thus led to think that within the neoclassical theoretical framework anything that causes the system to depart from equilibrium is the source of an economic disorder. Now, as general equilibrium implies the equalisation of supply and demand on the commodity, services and financial markets, disorder results from consumers’, producers’ and/or asset holders’ incapacity to agree about the terms of their relative exchanges. On the labour market, for example, an excess supply of labour that is not absorbed through a decrease in wages leads to unemployment. Whatever hampers the free fluctuation of wages is thus identified as the cause of this particular unbalance. Likewise, consumers’ behaviour may oppose the determination of equilibrium on the commodity market, with negative consequences for the clearance of this market as well as for future decisions to invest and produce.
