Cf., H. Mayer, ‘Der Erkenntniswert der funktionellen Preistheorien’, Die Wirtschaftsheorie der Gegenwart, 2 (1931); P. N. Rosenstein-Rodan, ‘Das Zeitmoment in der mathematischen Theorie des wirtschaftlichen Gleichgewichts’, Zeitschrift für Nationalökonomie, 1, No. in the annual subscription. Yet it is evident that most of the propositions of equilibrium analysis are not supposed to be applicable only in that stationary state which will probably never be reached. The data which now are supposed to be objective facts and the same for all people are evidently no longer the same thing as the data which formed the starting point for the tautological transformations of the pure logic of choice. York University Press, 1981). Economica is an international journal devoted to research in all It is round this approach that most of the theoretical discussions of the past ten or fifteen years have taken place. It should, however, be mentioned here that some of the most stimulating suggestions on problems closely related to those treated here have come from this circle. Questions essentially similar to those mentioned arise in fact as soon as we try to apply the system of tautologies – those series of propositions which are necessarily true because they are merely transformations of the assumptions from which we start, and which constitute the main content of equilibrium analysis3 – to the situation of a society consisting of several independent persons. There would of course be no reason why the subjective data of different people should ever correspond unless they were due to the experience of the same objective facts. [15]On all this cf. . The reason is rather that there seems to me to be another and more fruitful way of approach to the central problem. The question really is what use we make of it when we speak of equilibrium with reference to a competitive system. In a recently published article (‘Quantity of Capital and the Rate of Interest’. ©2000-2020 ITHAKA. Check out using a credit card or bank account with. And we may therefore very well have a position of equilibrium only because some people have no chance of learning about facts which, if they knew them, would induce them to alter their plans.Or,in other words,it is only relative to the knowledge which a person is bound to acquire in the course of the carrying out of his original plan and its successive alterations that an equilibrium is likely to be reached. There is only one more point in this connection which I should like to mention. [10]It is an interesting question, but one which I cannot discuss here, whether in order that we can speak of equilibrium, every single individual must be right, or whether it would not be sufficient if, in consequence of a compensation of errors in different directions, quantities of the different commodities coming on the market were the same as if every individual had been right. [16]I am not certain, but I hope, that the distinction between the Pure Logic of Choice and economics as a social science is essentially the same distinction as that which Professor A. Ammon has in mind when he stresses again and again that a ‘Theorie des Wirtschaftens’ is not yet a ‘Theorie der Volkswirtschaft’. Our problem of knowledge here is just the existence of this correspondence which in much of current equilibrium analysis is simply assumed to exist, but which we have to explain if we want to show why the propositions, which are necessarily true about the attitude of a person towards things which he believes to have certain properties, should come to be true of the actions of society with regard to things which either do posses these properties, or which, for some reason we shall have to explain, are commonly believed by the members of society to possess these properties.18. They are therefore universally applicable to the field in which we are interested – although of course where in concreto the limits of this field are is an empirical question. In general it seems that we have come to a point where we all realize that the concept of equilibrium itself can be made definite and clear only in terms of assumptions concerning foresight, although we may not yet all agree what exactly these essential assumptions are. But if the different plans were from the beginning incompatible, it is inevitable that somebody's plans will be upset and have to be altered, and that in consequence the whole complex of actions over the period will not show those characteristics which apply if all the actions of each individual can be understood as part of a single individual plan he has made at the beginning.10. What is relevant is not whether a person as such is or is not in equilibrium, but which of his actions stand in equilibrium relationships to each other. It is important to remember that the so-called ‘data’, from which we set out in this sort of analysis, are (apart from his tastes) all facts given to the person in question, the things as they are known to (or believed by) him to exist, and not in any sense objective facts. Economica [3]I should like to make it clear from the outset that I use the term ‘equilibrium analysis’ throughout this paper in the narrower sense in which it is equivalent to what Professor Hans Mayer has christened the ‘functional’ (as distinguished from the ‘causal-genetic’) approach, and to what used to be loosely described as the ‘mathematical school’. It is only because of this that the propositions we deduce are necessarily a priori valid, and that we preserve the consistency of the argument.4. In other words, the equilibrium relationship comprises only his actions during the period during which his anticipations prove correct. On the whole matter much historical information will be found in E. Schams, ‘Komparative Statistik’, Zsitschrift für Nationalökonomis, 2, No 1 (1930). But when we inquire further what exactly this implies, it appears that this answer raises more difficulties than it solves. And equilibrium will continue, once it exists, so long as the external data correspond to the common expectations of all the members of the society. Buchanan and G.F. Thirlby (New 22 ff., 160 ff. For complete equilibrium additional assumptions will be required about the knowledge which consumers possess about the serviceability of the commodities for the satisfaction of their wants. This item is part of JSTOR collection Brickmakers, plumbers and others will all be producing materials which in each case will correspond to a certain quantity of houses for which just this quantity of the particular material will be required. I have already had to use the undefined term ‘relevant knowledge’, that is, the knowledge which is relevant to a particular person.

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