.

Marie-Ésprit Léon Walras has been hailed by Schumpeter as "the greatest of all economists" (Schumpeter, 1954: p.827). Walras (pronounced "Valrasse") was one of the three progenitors of the "Marginalist Revolution" of 1871 - although his great work, Elements of Pure Economics, was published in 1874, three years after Jevons and Menger.

Nonetheless, along among the three, Léon Walras set forth a formal general equilibrium presentation of the new marginalist theory - thus endowing it with multi-market considerations Jevons had largely avoided and the mathematical trappings Menger had eschewed. Thus, the subjective theory of value of the marginalists was enshrined by Walras in a general equilibrium framework making him, justifiably, the father of modern Neoclassical G.E..

From any biography of Walras, the principal elements of Walras's life can be told: he was the son of the proto-marginalist, Antoine- Auguste Walras and, after spending a Bohemian youth in Paris as a novelist and art critic, Léon Walras soon followed his father's footsteps on every count: he adopted his socialist policy doctrines on taxation and land reform (in fact, outright land nationalization) as well as his main economic ideas (subjective value theory, mathematization of economics). After spending some unfruitful years in the cooperative movement, Walras was appointed to Lausanne in 1870 and quickly published the first edition of his magnum opus, the Elements of Pure Economics (1874) - envisioned as merely a part of a larger work.

In the aftermath of the Elements, Walras built up a correspondence with virtually every important economist of the time from America to Russia to popularize his ideas. He counted some sympathizers and followers among several young Italians (e.g. Barone and Pantaleoni and Americans (e.g. Moore and Fisher), but, for the most part, he was largely ignored or dismissed by both the economic and mathematical mainstream. In 1893, Walras was suceeeded by his young admirer, Vilfredo Pareto and the two men formed the core (and some argue the full extent) of the Lausanne School.

Walras's mental capacities, however, began to fail about this time. He quickly compiled the rest of the two remaining volumes of his "grand work" - the Studies in Social Economics (1896) and the Studies in Applied Economics (1898). Walras envisaged these works to be complementary to the Elements and considered the three volumes as integral and essential pillars for his theory. Tellingly, the first is subtitled "theory of the division of social wealth" and the second "theory of the production of social wealth" whereas the Elements are subtitled merely "theory of social wealth".

Nonetheless, economists have generally dismissed these last two as mere socialist policy arguments and credited him only for the 1874 Elements. The rest of his life was spent in frustrated loneliness - bitter at his work being so ignored and incapacitated by senility and mental illness. He died in 1910.

The essentials of Walras's Elements were set out in seven parts:

• (1) Walras provides his definition of the scope of economics, subjective value theory and the mathematical method;
• (2) two-commodity pure exchange where demand and supply are derived from utility-maximization; his "auctioneer" and the tatonnement process of stability is introduced here.
• (3) multi-market pure exchange; counts "equations and unknowns" to find existence; multi-market tatonnement with an auctioneer.
• (4) incorporation of production (in early editions, with fixed technology; in later editions, with flexible technology and thus marginal productivity theory) with a no-profit entrenepreneur and the demand for factors derived as indirect demand for goods;
• (5) theory of capital (which he sees as capitalization of future earnings) and presents a theory of saving and credit;
• (6) the encaisse desirée theory of money (money providing future services and thus "desired" in a general choice problem);
• (7) the continuous market and a growing economy; some very interesting reflections and a spelling out of his general "vision".
• (8) reflections on imperfect competition and monopoly.

Léon Walras's theory should be familiar to every modern economist as his theory is essentially what is available to us in much of modern general equilibrium theory. Some historians and economists have disputed this claim - arguing instead that Walras's theory cannot really be considered without taking into account the social and applied economics laid out in his two other works (1896, 1898). However, as far as the Elements in isolation is concerned, modern G.E. seems to have adhered quite well to Walras's original vision - only elaborating upon various parts of it both in mathematical and theoretical terms, but the general "concept" remains the same. However, we should note that extensions into uncertainty and intertemporality can be considered substantial deviations from the original vision. Thus, Walras's original ideas are better captured in "temporary equilibrium" models (e.g. Hicks (1939), Grandmont (1977)).