Hicks on Walrasian Equilibrium in the 1930s and Beyond

After many explorations in different directions during the early 1930s, in 1934 Hicks ends up by advocating an interpretation of Walrasian equilibrium and capital theory along stationary lines, but the suggested interpretation is at variance with the view endorsed by the last Walras and by Pareto at the turn of the century. In the second half of the 1930s, during the long gestation of Value and Capital (VC), Hicks’s ideas on equilibrium and capital progressively change and mature, to eventually culminate, with the publication of VC in 1939, in the rediscovery of a method of analysis and an equilibrium concept, Hicks’s temporary equilibrium, that are substantially similar to the method of analysis and equilibrium concept put forward by the last Walras and by Pareto about forty years before. Yet this direct link with the Walrasian tradition is not overtly recognised by Hicks in VC: in particular, the essentially Walrasian character of the equilibration process supporting Hicks’s temporary equilibrium concept is carefully disguised under Marshallian garments. This fact will not only delay Hicks’s own recognition of the limits of the VC approach, which will start to be questioned by him only in the mid-1950s, but will also concur to spreading unsubstantiated ideas about the origins and theoretical foundations of the neo-Walrasian research programme. The aim of this paper is to clarify the theoretical reasons behind the winding path followed by Hicks over the 1930s, especially as far as the Walrasian conception of equilibrium and equilibration is concerned, and to identify the roots of Hicks’s ambiguity about the theoretical ancestry of the VC model in his previous intellectual history.