As far as pure theory is concerned, Walras is in my opinion the greatest of all economists. His system of economic equilibrium [...] is the only work by an economist that will stand comparison with the achievements of theoretical physics. Compared with it, most of the theoretical writings of the period - and beyond - [...] look like boats beside a liner, like inadequate attempts to catch some particular aspect of Walrasian truth.Compare this with the view, I have noted before, of a later great of the history of economic thought, Mark Blaug,
We may conclude that GE theory as such is a cul-de-sac: it as has no empirical content and never will have empirical content. Moreover, even as research programme in social mathematics, it must be condemned as an almost total failure.The high watermark for Walrasian general equilibrium was arguably Debreu's 1959 book "Theory of Value" but is Till Duppe right when he says of Debreu’s influence today that,
[f]rom the point of view of today Debreu’s influence on the body of economics could be called zero, in that general equilibrium theory (GET) is the economics of yesterday.The question all this raises in my mind is, If Blaug and Duppe are right then does this explain why so much of post-1970 economics, e.g. contract theory, game theory, theory of the firm, industrial organisation etc, turned its back on general equilibrium theory and has worked within a partial equilibrium framework?
For the case of contract theory Bernard Salanie has argued,
The theory of contracts has evolved from the failures of general equilibrium theory. In the 1970s several economists settled on a new way to study economic relationships. The idea was to turn away temporarily from general equilibrium models, whose description of the economy is consistent but not realistic enough, and to focus on necessarily partial models that take into account the full complexity of strategic interactions between privately informed agents in well-defined institutional settings.What will the next great writer on the history of economic thought make of the 20th century giants of the field? As far as general equilibrium theory is concerned, Will he be a supporter of Schumpeter or Blaug?