An Historical Investigation
Chapter 4: The Origins of Economic Equilibrium
INTRODUCTION How to start the historical investigation of a concept so elusive as equilibrium? We have already seen that with some good will, we are able to trace the roots of equilibrium thinking as far back as ancient Greek economic thought. It is not my intention to review the history of economic thought of the past 2300 years. For the purpose of this book, I shall locate the origins of equilibrium economics somewhere around the start of the eighteenth century. My reasons for doing so are partly pragmatic and for another part inspired by the desire to restrict attention to scientific conceptions of economic equilibrium. But what does scientific mean in this regard? The word science may have a specific methodological meaning in the sense of experimental science, but it also has the broader and more general connotation of a systematic inquiry. This notion is often used to pinpoint the start of a specific science like economics. An example is the focus of Schumpeter (1954) on the history of economic analysis, which he sharply distinguished from ‘economic thought’ and the ‘systems of political economy’. However, I shall argue in the next section that ‘analysis’ as Schumpeter used it placed emphasis on the object of inquiry rather than its method. Nonetheless, there is merit in the demarcation proposed by Schumpeter and I shall use it to motivate the starting point of this inquiry. This starting point concerns the analysis of supply and demand equilibrium in the work of two preclassical economists,...
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