Marie-Ésprit-Léon WalrasHe was born in Évreux, France, on December 16, 1834. Walras’s father, the French economist Auguste Walras, encouraged his son to pursue economics with a particular emphasis on mathematics. After trying various careers, for a time he was a student at the school of mines, journalist, lecturer, railroad clerk, bank manager, and published romance novelist:Walrashe eventually returned to studying and teaching economics. In that scientific discipline Walras claimed to have found “pleasures and joys such as those that religion provides to the faithful“.Walrashe retired in 1902 at the age of fifty-eight.
ButWalrashe was aware that the mere fact that such a system of equations could be solved mathematically for an equilibrium did not mean that in the real world it would ever reach that equilibrium. So his second big step was to simulate an artificial market process that would bring the system to equilibrium, a process he called “tâtonnement”(French for“ groping ”). Tâtonnement was a trial and error process in which a price was advertised and people in the market said how much they were willing to demand or supply at that price. If there was an excess of supply over demand, then the price would be reduced so that less would be offered and more would be demanded. Thus, prices “would grope“toward equilibrium. To keep constant the equilibrium toward which prices were groping,Walrashe assumed, very unrealistically, that no actual exchanges took place until equilibrium was reached. If, for example, people who wanted to buy ketchup wanted more than the sellers were willing to sell, then they would not buy anything. This assumption limits the usefulness of the simulated process ofWalrasto help you understand how real markets work.
Walras’s only academic job was as a professor of economics at the University of Lausanne in Switzerland. This location was not ideal: because the dominant thinking in economics at the time was in Britain, it was difficult toWalrasaffect the rest of the profession. Furthermore, because his students were more interested in becoming lawyers than economists, Walras had no disciples. Although his impact on the economy was limited during his lifetime, it has been much greater since the 1930s.