Applied Economics and the Political Organization of the Market

To solve the social question, the fair distribution of social wealth is not enough; it is also necessary that its production should be “as plentiful as possible” (OEC IX: 56 [39]).

The book Etudes d’economie politique appliquee was published in 1898, and the table of contents tells us more about the subjects that preoccupied Walras, than about the true content of separating political from social economics. Three-quarters of the volume are devoted to money and finance; the rest is divided into three roughly equal parts - between the study of monopolies, of agricultural studies, of industry and commerce and the “Esquisse d’une doctrine economique et sociale”. In Part I, “Money” - more than a third of the book - Walras presents again the chapters that had been expurgated from the third edition of Elements, the Theory of money and half a dozen articles published in scientific journals and newspapers. The part entitled “II. Monopolies” consists of only one substantial study dating back to 1875, “L’Etat et les chemins de fer”, that had been turned down by the Journal des economistes. Part III contains three articles whose titles speak for themselves: “The influence of communication between markets on the situation of rural communities”, “Applied economics and the protection of wages” and “Theory of free trade”. Three parts follow, on credit, banking (with a text that is crucial to understand Walras’s monetary theory, “Mathematical theory of banknotes”) and stock markets. The book concludes with “Outline of an economic and social doctrine”.