Ever since I encountered Hicks’s Value and Capital while I was still a graduate student, I had the aim of completing and extending his vision of the … - Kenneth Arrow

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Ever since I encountered Hicks’s Value and Capital while I was still a graduate student, I had the aim of completing and extending his vision of the economic system in its purest form. This was not because I believed that the economic world was perfectly competitive or that it was clearly self-equilibrating; after all, Chamberlin, Robinson, and Keynes were dominant intellectual influences, and I had the even more powerful influence of the facts of massive unemployment and large corporations. But the idea that the economic world was a general system, with all parts interdependent, seemed (and seems) to me to be an essential of good analysis. I regret what appears to be a revival of single-market thinking both among monetarists and among some of the younger empirical analysts. Then as now, the only game in town that offered a general system of economic interdependence was general competitive equilibrium, an idea to which the name of Leon Walras is imperishably linked. At least, such a system would provide a starting point for analysis of the market’s imperfections.