Valeria Mosini (Ed.). Equilibrium in Economics. Scope and Limits

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Valeria Mosini (ed.). Equilibrium in Economics. Scope and Limits (Routledge Frontiers of Economies, No. 83). London: Routledge. 2007. Pp. xxiii + 284. ISBN 0415391377. 75 [pounds sterling].

Equilibrium is discerned by William Stanley Jevons (Theory of Political Economy, chapter 4) to be a final conception in the abstract science which elsewhere he calls the mechanics of industry. So Professor Alfred Marshall, indicating in the preface to his Principles of Economics the leading ideas by which he was inspired, says 'the demand for a thing is a continuous function, of which the "marginal" increment is a stable equilibrium balanced against the correspondent increment of its cost of production'. Professor Marshall employs the term equilibrium amount as the amount of the commodity produced in a unit of time when the demand for and the supply of that commodity are in equilibrium, and when there is therefore no tendency in the quantity produced in a particular time to increase or diminish. The term equilibrium price is similarly used to denote the price of the equilibrium amount in the same circumstances.

The above constitutes the complete article, 'Equilibrium', as included in the first edition of Palgrave's Dictionary of Political Economy (London, 1894, I, p. 749) written by the advocate, Mark G. Davidson. It firmly associates the concept with what is now called the 'marginal revolution' in England, more specifically with two of its key figures, Jevons and Marshall. There is no separate entry for 'equilibrium' in Edwin R.A. Seligman's massive Encyclopaedia of the Social Sciences published in New York by Macmillan during the 1930s. Readers who wished to learn about 'economic equilibrium' were referred to J. M. Clark's entry on 'statics and dynamics'. This contrasted social systems of natural order from the eighteenth century with the systems of evolutionary social thought developed in the nineteenth century by August Comte and Herbert Spencer; mentioned the historical dynamics of Karl Marx; and paid tribute to the rigorous use of statics in the economics of his father (J. B. Clark) as indispensable preparation for dynamic economic analysis. It then associates dynamic change with American institutionalism and evolutionary social theory as pioneered by Wesley Mitchell and Thorsten Veblen, pausing on the way to draw attention to the static equilibrium analysis of supply and demand (contrasted with their dynamic counterpart in the theory of production and employment). Business cycle theory, perhaps appropriately in the world economic situation of the 1930s, is depicted as the key form of dynamic theory in economics.

The New Palgrave (in 1987) abundantly compensated for this dearth on the subject of equilibrium in major reference books. Apart from an article by Murray Milgate on the development of the equilibrium concept in economics, it provided individual entries on 'Arrow-Debreu Models of General Equilibrium', 'Centre of Gravitation', 'Classical Conceptions of Competition', 'Conjectural Equilibrium', 'Monetary Equilibrium', 'Temporary Equilibrium', 'Natural and Normal Conditions', 'Stability' and 'Stationary State'. Some of these articles receive critical treatment in the pages of the book here under review, in particular aspects of Murray Milgate's historical survey, the 'neo-Ricardian' aspects of which are criticised by Vicky Chick in her chapter, 'Equilibrium in Economics: Some Concepts and Controversies' (especially, pp. 233-5).

Like The New Palgrave, this collection of papers on equilibrium deals with various aspects of this extensive topic. Its three parts look successively at the interplay of equilibrium notions between the natural sciences (specifically mechanics in chapter 1, chemistry in chapter 2, and biology in chapter 3); preneoclassical predecessors on the subject, namely Adam Smith and Thomas Chalmers (chapter 4), Achilles Isnard and the French Enlightenment (chapter 5) and Antoine Augustin Cournot (chapter 6). …