General Social Conditions, Specific Personal Positions and General Economic Equilibrium

The existence and influence of these social general conditions allows Walras to show that society and/or the economic system cannot be described as a simple set or even a simple aggregation of individual agents.

Animals behave according to “instinctive, blind and fatal” factors and their respective “destinies” are independent (Walras and Walras, 1870/1996: 190). Quite the contrary, when human beings act in order to consume, produce and survive, they cannot ignore the existence of the division of labor and therefore the interdependence and the soli­darity among all human destinies.

Thus, the so-called general social conditions provide a purely social factor that influences any individual behavior and implies for agents the necessity of social or inter-individual behavior coordination. This view totally differs from the one defended by modern GEE theorists and based on pure methodological individualism.

Walras located the degree of freedom that remains to individual agents within what he called the “positions personnelles particulieres.” Therefore, there indeed exists a space for agent free will but this space is strictly limited by human physiology and psychology and constrained by the social con­text. We have however still to explain if this limited and constrained free will generates rational choice in Walras’s economic theory.

We must now come back to Walras’s well-known interpretation of exchange as a “natural fact” (Walras, 1900/1976: 26-27). We know that, using their free wills, agents can influence it but only to some extent. Fundamentally and to repeat what Walras wrote concerning this “fact” in his Elements d'Economie Pure, in any case, “we cannot change its contents and its laws” (“nous ne pouvons changer son caractere et ses lois.”) The analysis of the fact of exchange implies the necessity to cope with two main problems.

It is first necessary within as well as without the division of labour, for the industrial production of social wealth to be well proportioned and not only abundant. Some scarce goods have not to be multiplied excessively while some others would be unsufficiently produced (Il faut d’abord qu’au sein de la division du travail, comme cela aurait lieu en dehors de la division du travail, la production industrielle de la richesse sociale soit non seulement abondante, mais bien proportionnee. Il ne faut pas que certaines choses rares soient multiplies en quantite excessive pendant que d’autres ne seraient multiplies qu’insuffisamment dans leur quantite). (Walras, 1900/1976: 34)

The second problem is more original since it is related to social justice: “Within as without the division of labour the distribution of social wealth among men within the society has also to be fair (Il faut ensuite qu’au sein de la division du travail, comme en dehors, la repartition de la richesse sociale entre les hommes en societe soit equitable)” (Walras, 1900/1976: 34).

In other terms, the natural fact of exchange has to be compatible with both the requirements of market clearing and equity. Now, how is this compatibility achieved? It is achieved with the help of the natural founda­tions related to the division of labor and the existence of “moral persons.” But we noted that these natural foundations also provided a framework for humanitarian facts (Walras, 1900/1976: 36).

Walras therefore drew the conclusion that market clearing or equity could not be obtained with the mere help of a simple aggregation of individual free wills. One element was missing: a mechanism of coordination of these free wills. Now, within this context, Walras only mentioned the conditions of both these analytical requirements but did not try to build a priori micro-foundations of general economic equilibrium and welfare.

The theory of property sets and determines the relations between men considered as moral persons concerning the appropriation of social wealth, or the conditions of a fair distribution of social wealth between men in the society.

The theory of industry sets and determines the relations between men con­sidered as workers devoted to specific activities dedicated themselves to the multiplication and the transformation of social wealth; or the conditions of an abundant production of social wealth among men in the society.

The first conditions are moral conditions which will be set from the standpoint of justice. Others are economic conditions which will be generated from the standpoint of interest. But both are also social conditions indications to organize society.

(La theorie de la propriete fixe et determine les rapports des hommes comme personnes morales entre eux a propos de Tappropriation de la richesse sociale, ou les conditions d'une repartition equitable de la richesse sociale, ou les conditions d'une repartition equitable de la richesse sociale entre les hommes en societe.

La theorie de Tindustrie fixe et determine les rapports des hommes consideres comme travailleurs adonnes a des occupations speciales avec les choses en vue de la multiplication et de la transformation de la richesse sociale, ou les conditions d'une production abondante de la richesse sociale entre les hommes en societe.

Les premieres conditions sont des conditions morales qui seront deduites au point de vue de la justice. Les autres sont des conditions economiques qui seront deduites au point de vue de Tinteret. Mais les unes et les autres sont egalement des conditions sociales, des indications en vue de Torganisation de la societe.) (Walras, 1900/1976: 39-40)

This quotation shows that for Walras the respect of interest and justice is equivalent to the respect of social norms that are part of the very foundations of the organization of society.The necessary respect of individual self-interests is not interpreted as the result a contractual compromise between rational agents but as the realization of one of these organizational foundations.

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