The LSE
Besides Vienna, another European source enriched the heritage of the Ecole de Lausanne’s general equilibrium: the English response, localized at the London School of Economics and Political Science (LSE) against the domination of Cambridge, which stole the show over the Ecole de Lausanne.
Indeed, the general equilibrium was then mobilized against Alfred Marshall’s hegemony, regarding the partial equilibrium approach and Arthur Cecil Pigou’s as regards welfare economics. John Hicks, Roy Allen and Lionel Robbins’s works, and especially the publication of Value and Capital (Hicks 1939), made Pareto’s general equilibrium - together with his ordinalism - known to a wider English audience.The socialist calculation debate, which conferred centre stage to the general equilibrium theory, also had its operational core at the LSE in 1930 (Friedrich Hayek and Abba Lerner). The debate, launched by the Austrian Ludwig von Mises, called for socialist economists such as Oskar Lange and Boris Brutzkus to react, so as to know whether the general equilibrium was able to capture the essence of a decentralized economy. While this debate helped unearth the Italian Enrico Barone’s Paretian contribution, it is mainly the different perceptions of the general equilibrium by both Vienna schools that were then to be found mobilized, and transposed into a new conceptual framework. Let us suggest by the way that, though the controversy was won by Lange, it may well have had an influence on the concrete planning of Soviet economies.