Three quarters of a century after the death of Léon Walras, the founder of the Lausanne School, the Auguste and Léon Walras Center in Lyons has published for the first time his Mélanges d'économie politique et sociale. This volume includes twenty-nine papers, all prepared by Léon Walras, and maps out his theoretical itinerary. It spans works that he wrote in his youth, which were strongly influenced by his father's ideas, and mature works that he devoted to the three fields of pure economics, applied economics, and normative economics. His efforts were part of a lifelong project: the creation of a “scientific, liberal and humanitarian socialism.” The Mélanges reasserts Walras's desire to achieve a synthesis of these three fields that have been separated by too many of his disciples, who have retained only the one devoted to economic theory. The Mélanges plays an important part in the writings of Léon Walras. Initially conceived as containing remnants that had not appeared in the volumes published during Walras's life, it underwent a progressive development due to the succession of papers that he kept adding to it right up until the time of his death. Walras's revisions of the papers; his directions for the publication of the essays; his incorporation of unpublished papers on the teaching of political economy at the end of the nineteenth century; the character of the Mélanges as being a synthesis of the Elements d'économie politique pure, the Etudes d'économie sociale and the Etudes d'économie politique appliquée; and the insertion into the Mélanges of Léon Walras's last articles all make this work a genuine and important scientific testament.

It is well known that the division of labor was the starting point of Adam Smith's theory of economic growth. Schumpeter (1954, p. 187) observed, with mild exaggeration, that “nobody, either before or after A. Smith, ever thought of putting such a burden upon division of labor. With A. Smith it is practically the only factor in economic progress.” Smith failed to explain the origins of the concept beyond the natural, human “propensity to truck and barter,” but he maintained that division of labor was a natural occurrence in a capitalist economy. Despite some misgivings about the monotony of repetitive tasks occasioned by specialization, which he expressed in Book V of the Wealth of Nations, Smith stressed the effect of division of labor and specialization upon the productive powers of labor. On this bedrock he built a theory of economic development: division of labor leads to increased output, which leads to higher levels of profits, out of which increases in fixed and circulating capital are financed. This leads to an increase in the wages-fund, and higher wages for labor, so long as increases in the demand for labor outstrip increases in the supply.

Once upon a time, economists possessed an Anonyomous Saint, who will be called “A. S.” for short. Like most patron saints, A. S. provided economists with the theme that guides their lives–the idea that the desire for advancement comes to us in the womb and drives us until we are in the tomb. This fundamental conception was elaborated upon in a book entitled, with prophetic anticipation, WoN. That economists have failed to apply the self-interest thesis to the saint himself only serves to illustrate the adage about prophets being without honor in their own country. As a capable administrator, a sound committee man, an astute seeker of patronage and a professor of rhetoric to boot, A.S. was surely aware of all the worldly and literary ways of establishing a reputation. I will try to examine A.S.'s life by using the much neglected method of conjectural history–a form of writing that believes it justifiable to reconstruct history from rational conjectures, in this case the motives of men, when facts are not to be found. A set of mythical footnotes for this fable of mine is available; to obtain these, readers have merely to prove that they are about to sue for libel.

Very few readers of J. W. von Goethe's Faust have recognized that he is making a moral claim which was a commonplace among the British classical economics. The British classical economists raised a fundamentally moral objection to the public debt. It was, they said, a way of making destructive policies seem less onerous. This moral criticism of public debt has been made now and again in modern economics; nonetheless, this point has gone largely unremarked in later moral discussions. To some extent this is an unescapable consequence of intellectual specialization: how many moralists of stature have worried about an appropriate fiscal policy? Moreover, when moralists do turn their attention to problems in which economists are interested, their contributions all too often suffer from elementary, but fatal, technical defects.

In an essay on “The Ricardian Theory of Value and Distribution,” Stigler, commenting on Malthus' example of a geometrically increasing population and arithmetically increasing output, states the following:

“… Malthus' ratios implicitly assumed sharply diminishing returns, for his numbers define the production function,

L = 2p-1

where L is labor (proportional to population) and P is produce. With this production function, indeed, if workers received a wage equal to their marginal product, the aggregate wage bill would be independent of the size of the labor force, and population simply could not grow!”