ABSTRACT
J. Schumpeter reinforced Leon Walras' capital theory by von Bohm-Bawerk's Positive Theory of Capital. Schumpeter's argument for the approach of his dynamic paths towards the Walrasian general equilibrium, though this argument has not been rigorously and precisely established by him, is outlined by him in the manner of conjecture. As the equilibrium wages are extremely low, there is no necessity for fixed capital equipment, so that an excess supply of fixed capital is inevitable. The prices of consumption goods, capital goods, and the primary factors of production, together with the rate of profits are all determined; the outputs of consumption goods and capital goods are also determined. In the analysis of the second part of the capital formation equilibrium Walras assumes implicitly that the equilibrium is stable and entirely stays away from a detailed description of the movement towards the new capital formation equilibrium.
