Entrepreneurship, knowledge and employment

Léon Walras on the Worker-Entrepreneur

Misaki Kayoko, Shiga University

In Walras’ pure economics, the entrepreneur receives no profits in a state of general equilibrium. Under the hypothetical regime of free competition, Walras gave this zero-profit entrepreneur no realistic role, which raised many criticisms among economists. However, in his social and applied economics, where he pursued the fairness and efficiency of a real economy, Walras argued for the real entrepreneur and its role based on his pure theory of the entrepreneur. One role involves the possibility of the state-entrepreneur, designed to prevent extra profits for monopolies. The implications of this state-entrepreneur plan have been argued by several scholars, such as Boson and Dockès. The aim of this research is to pay special attention to Walras’ idea of the worker-entrepreneur, which has not been previously examined. In his pure economics, workers are considered the counterpart of entrepreneurs in the markets. Walras emphasised the theoretical distinction of workers from entrepreneurs. Yet, he allowed for the possibility of real entrepreneurs that make a living as workers. Thus, Walras’ entrepreneurs, in his pure economics, can be considered not as a class, but as a function. Therefore, Walras considered the Marx ‘capitalist’ the ‘capitalist-entrepreneur’, by his own definition. With this research, I will show how Walras’ idea of the worker-entrepreneur originates from his thinking about the association movements, in which he engaged during his pre-Lausanne days. I will also show that the idea is theoretically connected to his zero-profit entrepreneur theory in pure economics and how he used it during his life to criticise other economists’ concept of profits or of capital–labour relationships. Walras criticised the idea of profit as the outcome of the exploitation of workers by leveraging his own idea of the worker-entrepreneur. Although Walras’ analysis of profit produced by workers’ skilfulness is fragmented, it will shed new light on history of entrepreneurship.

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Keywords: Walras, general equiribrium theory, entrepreneur, Marx, Charles Gide, social economics, applied economics

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