Sept. 5, 1889] 



NATURE 



435 



^o whom belongs the honour of having made a discovery 

 in political economy. The title of Ricardo to the theory 

 of rent is not better than the title of Prof. Walras to a 

 theory more comprehensive than that of rent. It is a 

 •claim founded on originality rather than priority. Prof 

 Walras is the last of a small band of original thinkers 

 who, in the latter half of this century, have independently 

 •excogitated the cardinal article in the doctrine of value. 

 They have contemplated in different aspects the same 

 .fundamental conception : that value in exchange is 

 neither simply identical with, nor wholly different from, 

 value in use, but corresponds to the utility of the last, 

 the least useful, portion of the commodities exchanged. 

 ""Nutzlichkeit des letzten Mengentheilchens," "Degree 

 -of Final Utility," " Grenznutzen," and "Rarete"— in 

 different tongues and various terminology they proclaim 

 the one essential truth which will be for ever associated 

 with the names of Gossen, Jevons, Menger, and Walras. 



This chronological, and, as it happens, alphabetical, 

 arrangement is not identical with the order of merit. In 

 that order we should place nearest together the names 

 which are first and last in the series above written. 

 ■Gossen appears to have been a mere specialist with few 

 valuable ideas beyond the one which has made him 

 immortal. Prof. Walras's light is more diffused. Yet it 

 is true that we find in him rather miiltwn than imtltaj 

 that his principal achievement is the copious exposition 

 of the one fundamental theorem to which we have 

 referred. His next most important contribution to the 

 stock of economic ideas relates to the function of the 

 entrepreneur. Prof. Walras is one of the first who cor- 

 rectly conceived the entrepreiieur as buying agencies of 

 production (use of land, labour, and capital), and selling 

 finished products in four markets, which thus become 

 interdependent. His criticisms of the English school on 

 this head are often valuable. Of the entrepreneur's 

 funds, not pre-determined in the sense which some have 

 imagined to any particular form of outlay, he well 

 says : — 



" II serait aussi impossible de distinguer ce fonds de 

 Toulement du travail du fonds de roulement de la rente 

 fonciere, ou du fonds de roulement du profit, que de dis- 

 tinguer dans un bassin a trois robinets I'eau destinde a 

 s'^couler par un robinet de celle destinee a s'ecouler par 

 les deux autres." 



But surely he goes too far in the way of abstraction 

 when he insists that the ideal intnpreneur should be 

 regarded as " making neither gain nor loss " : — 



" Pour ce qui est de la part du profit constituant le 

 D^n^fice de I'entrepreneur I'e'cole anglaise ne sort pas 

 qu'elle est alcatoire, qu'elle ddpend des circonstances ex- 

 ceptionelles, et non pas normales, et que, thdoriquement, 

 elle doit etre negligee." 



Perhaps his views on this and other points would have 

 been more exact if he had considered the part which the 

 disutility" of labour — to use Jevons's phrase -plays as 

 i factor of economic equilibrium, instead of confining his 

 mention to " final utility." Another theory to which we 

 Jught to call attention is contained in the lesson on capi- 

 talization, which is added in the new edition. If the price 

 of capital is determined by competition, it follows from 

 the general theory of supply and demand that the maxi- 



mum utility of all the parties concerned is realized in the 

 same sense as in other markets. What is more than this 

 in the newly-added theory has baffled us. 



In the case just noticed and others, the argument is 

 probably rendered obscure, or at least unattractive, by 

 the use of symbols in excess of the modest requirements 

 of elementary mathematical reasoning. The exuberance 

 of algebraic foliage, rather than the fruit of economic 

 truth, is the outcome of science thus cultivated. It is 

 remarkable that the neatness which characterizes Prof. 

 Walras's literary style, should not be reflected in his 

 mathematical compositions. As an algebraist he has 

 not attended to the maxim, // ne faict pas epuiser 

 les choses. We shall justify our criticism by referring to 

 the chapters or "lessons," in which it is attempted to 

 analyze what is called the " tdtojtnenient" of the market. 

 The writer gives us three courses of this analysis. He 

 diffuses over some thirty-five pages an idea which might 

 have been adequately presented in a few paragraphs. 

 For it is, after all, not a very good idea. What the 

 author professes to demonstrate is the course which the 

 higgling of the market takes — the path, as it were, by 

 which the economic system works down to equilibrium. 

 Now, as Jevons points out, the equations of exchange 

 are of a statical, not a dynamical, character. They define 

 a position of equilibrium, but they afford no information 

 as to the path by which that point is reached. Prof. 

 Walras's laboured lessons indicate a way, not the way, of 

 descent to equilibrium. This is not the only topic with 

 respect to which the laboriousness of the investigation is 

 out of proportion to its importance. 



Agreeing, therefore, in the main with Prof. Walras in 

 his plea for the use of mathematical reasoning in eco- 

 nomics, we fear that he may have prejudiced the cause 

 by his advocacy. The excessive elaboration of his 

 reasoning, compared with the simplicity of his conclu- 

 sions, is calculated to excite suspicion. Moreover, he 

 traduces the mathematical method when he applies it in 

 such a manner as to justify the popular prejudice against 

 abstract reasoning. He is surely ultra crepidam, he 

 goes beyond the little hard matter with which the craft 

 of the mathematician is concerned, when he offers opinions 

 on the living organism of the industrial body, and the 

 complexion of practical problems. His scheme of dosing 

 the circulation by a nicely calculated injection of supple- 

 mentary currency reminds us of the tailors in Swifts 

 Laputa, who went through laborious mathematical com- 

 putations in order to determine the measurements of a 

 suit of clothes, which after all fitted very ill. When 

 Prof. Walras offers us " the solution of the Anglo-Indian 

 monetary problem," we think of Fluellen in the heat of 

 the battle discoursing about the " discipline of the wars." 

 There is a discipline adapted to the schools, and which it 

 is profitable to have studied, but which has no direct 

 bearing upon action. 



A minor ground of complaint is formed by the extreme 

 severity of our author's criticism, especially those which 

 relate to the English school. We cannot think that 

 Mill's oversights deserve the ^^ horribilijlagello" -which 

 is administered. To dismiss in a few lines " comme nul 

 et non avenu" so muchv of that philosophers reasoning 

 appears to us rather slashing. But v\ e are sensible that in 

 condemning the unceremonious treatment of great men, we 



