Two concepts of equilibrium, the equation of unified knowledge and two concepts of stability

Abstract

So far as pure theory is concerned, Walras in my opinion is the greatest of all economists. His system of economic equilibrium, uniting as it does, the quality of "revolutionary" creativeness with the quality of classic synthesis, is the only work by an economist that will stand comparison with the achievements of theoretical physics [2].Walras indeed aspired to produce a Newtonian replica in economic thinking when he confessed himself:Very few of us are capable of reading Newton's Philosophiae Naturalis Principia Mathematica or Laplace's Mecanique Celeste: and yet, on the word of competent scientists, we all accept the current description of the universe of astronomical phenomena based on the principle of universal gravitation.Why should the description of the universe of economic phenomena based on the principle of free competition not be accepted in the same way? There is no reason why the proof of the system, once established, may not be taken for granted, nor why the assertions involved may not be used in the study of applied or practical economics [3].Analytically speaking, he was correct. However, the great Walras too lived under the same universal law of human imperfection and missed two important points. Even though he described very well the function of entrepreneurship[4], nevertheless he started the subject with the assumption that "in a state of