Can the Auctioneer be Dispensed with ? A Reflection on the Organisation of Trade in Competitive General Equilibrium Theory

This article examines the question of which institutional assumptions underly competitive general equilibrium theory. Extending Walra’s terminology, the organization of trade hypothesis typical of this theory is called tâtonnement. Its components and its working principles are analysed comprehensively. The pervasive view, that tâtonnement is a stylised figure of market forces, is criticized on the grounds (1) that a tâtonnement economy is a hybrid between a decentralized and a command economy and (2) that a tâtonnement economy is the epitome of social constructivism, as its creation can be likened to a Hobbesian social contract. Finally, three possible arguments in favor of tâtonnement are considered, the "realistic", the "benign neglect" and the "lack of alternative" argument. Only the last one is considered as a worthy defence of it.