II. THE POLITICAL AND INTELLECTUAL LINKS BETWEEN MILL AND WALRAS

A previous discussion of Walras’s socialist commitments by Renato Cirillo (Reference Cirillo1980) noted that while both Mill and Walras held similar views on the need for radical social reform, they had little to no intellectual contact with each other. In Mill’s case, this assessment is true. He died in 1873, and there is no evidence that he was aware of Walras’s works in pure or applied economics. By 1870, Walras had already produced critiques of Pierre-Joseph Proudhon and Louis Blanc and lectured passionately on the need for cooperatives, but he did not receive his appointment as professor of political economy at Lausanne University until 1870. It is fair to say that Léon Walras had not yet become a well-known economist.

Cirillo, however, was incorrect about Walras’s lack of engagement with Mill. In 1861, for example, Walras identified Mill as “the greatest contemporary economist of England” and praised him for his consistent commitment to individual liberty (Walras Reference Walras, Dockös, Goutte, Hébert, Monchot, Potier and Servet1987, p. 147). While Walras’s eventual assessment of Mill’s analytical framework became quite negative, he continued to hold many of Mill’s contributions in high regard. In one of his later writings on the teaching of the moral sciences, Walras despaired of the lack of social scientific talent in France and wondered why his country had not produced thinkers of the caliber of J. S. Mill, Alexander Bain, Herbert Spencer, and W. Stanley Jevons (Walras Reference Walras, Dockös, Goutte, Hébert, Monchot, Potier and Servet1987, p. 407).

Walras was not an uncritical admirer of Mill. Even in his early writings, Walras expressed some discomfort with Mill’s suggestion in Principles of Political Economy (1904) that the establishment of communism could represent an important milestone for human progress. Moreover, Walras’s break with Mill’s Ricardian theoretical framework became clearer over time. In later writings, Walras criticized both Ricardo and Mill for their tendency to explore complex economic dynamics in “ordinary language” rather than with mathematical symbols. He argued that this expository method made their arguments imprecise and ultimately imperfect. Walras also objected to Ricardo’s and Mill’s attempt to understand value formation by searching for causes outside the market system, i.e., in hours of effective laboring effort. According to Walras, this attachment to the labor theory of value led to a “complete ignorance of the market mechanism” (Walras Reference Walras, Dockös, Goutte, Hébert, Monchot, Potier and Servet1987, p. 435).

Given the harshness of this critique, why did Walras consider Mill a paragon of social scientific accomplishment? There are four reasons.

First, Walras agreed with Mill’s argument that property relations are malleable and that considerations of distributive issues require an analytical framework that emphasizes justice in Walras’s case and historically informed utilitarian assessments for Mill. Both thinkers also shared an antipathy towards non-productive landowners and aristocratic privilege, and argued that a better property rights system should lead everyone to work and create background conditions that would promote equality of opportunity, and thus empower workers and reduce working-class poverty.

Second, both held similar views on the relationship between the individual and society. For Walras and Mill, a good society promotes freedom and creativity. In addition, they argued that our norms and viewpoints are shaped by the society in which we live. We are inherently social creatures, and our preferences are shaped by our environment.

Third, as a result of this perspective, both thinkers believed that social reform was crucial to the creation of a better society. Mill was much more open to imagining a society in which individuals had maximum freedom while property was owned collectively. Mill, unlike Walras, also insisted on extending the rights of liberty to women as well as men. At the same time, Walras shared Mill’s enthusiasm for cooperative enterprises and, as we shall see, Walras also advocated a more radical shift in laws regulating the ownership of natural resources than Mill ever contemplated.

Fourth, both authors agreed on the importance of market competition. They viewed skeptically those socialists who advocated the elimination of price and wage competition. Thus, Mill challenged the antimarket views of Robert Owen and Louis Blanc, and Walras agreed. This shared viewpoint springs from their insistence that competition reduces rather than increases the potential for exploitation.

One important reason for this agreement on fundamental issues is that Walras and Mill developed similar attitudes towards the social theory of Henri de Saint-Simon and his followers (Jacoud and Potier Reference Jacoud and Potier2020). While neither thinker supported the statist arguments of this school of thought, for reasons we have just outlined, both endorsed Saint-Simon’s evolutionary perspectives. In Walras’s case, his interest in Saint-Simon stemmed from his father, Auguste, who participated actively in Saint-Simonian organizations during the early 1830s. Both Léon and Auguste were particularly attracted to Saint-Simon’s division of society into idlers and productive workers. While they disagreed with the more radical Saint-Simonian followers who argued that both capitalists and landowners were non-productive, they did endorse the view that landowners contributed little to nothing to our well-being. This view, of course, was shared by the older classical tradition of Adam Smith and Ricardo, which Mill adopted.

The Saint-Simonian views on equality also matched those of Walras and Mill. Mill, in particular, became publicly associated with Saint-Simonian thought during his early debates with the Owenites (Bellet Reference Bellet2021). He was skeptical of Owen’s advocacy for complete equality and worried that Owen’s perspective, while democratic in spirit, also contained a deep authoritarian core. Walras expressed similar views in his early critiques of Proudhon and Blanc (Walras Reference Walras and Goutte1993; Potier Reference Potier2019).

The connection with Saint-Simonian thought also speaks to a deeper connection of both authors to French political life. Walras considered himself a descendant of the great French Revolution and urged its continuation “by pursuing truth and social justice” (Walras Reference Walras2010, p. 63). Moreover, although Mill participated actively in British political and imperial life, it is fair to say that much of his radical political inspirations came from France. Mill toured France as a teenager, was inspired by aspects of the 1848 revolution in France, and chose to live near Aix-en Provence as an adult. Mill was also introduced to socialist ideas in France and was an avid reader of the works of Saint-Simon as well as Charles Fourier. From Saint-Simon, he developed the view that institutions of property and the market were not a product of natural law or human instincts but a result of historical evolution. From Fourier, he analyzed with approval Fourier’s attempt to model an egalitarian society that used material incentives to allocate laboring effort while promoting solidaristic norms. Mill’s interest in these thinkers was not purely academic. Throughout much of his adult life, he engaged in intense discussions with French socialist leaders such as Louis Blanc about their visions of a new political economic order.

Walras also took note of the rise of cooperatives that emerged after 1848 and praised their potential for remaking French economic life. Although he criticized French politicians and other theorists for their lack of understanding of the scientific breakthroughs represented by economic theory, he had deep interests in the radical critiques of the social order produced by socialist and anarchist thinkers in France (Walras Reference Walras and Goutte1993).

III. MILL’S AND WALRAS’S CRITIQUES OF CAPITALISM

John Stuart Mill’s and Léon Walras’s critiques of capitalism centered on four issues—the unjust distribution of property, the poverty of much of the working class, the oppressive nature of work relations, and the distortion of social norms towards excessive individualism. Walras emphasized the issue of property most sharply, while Mill’s critique stressed more the denial of liberty to workers within capitalist enterprises. Both argued that the property institutions of their time were one important cause of social poverty. Further, Walras and Mill recognized that individual preferences were generated within society and thus were malleable. Mill argued that the selfishness promoted by capitalist competition could be attenuated if market competition took place among cooperative enterprises rather than capitalist firms, and there are passages in Walras’s writings that suggest that he agreed with this perspective.

Walras’s critique of the property relations that he observed is straightforward. He believed that property rights should be determined by justice, not economic “advantageousness.” This non-utilitarian approach led him to invoke natural law as the principal reason to advocate the communal ownership of land. More specifically, Walras stated that workers have an inherent right to own their ability to work, and capitalists have a right to the profits they receive from leasing their capital, but landowners have no right to rental income from the use of nature because nature belongs to or is granted by God to the whole community. He explicitly rejected utilitarian calculations to legitimate a form of ownership that was inherently unjust. Thus, for example, he stated that even if the ownership of enslaved humans might lead to more material output than a system of free labor, slavery should still be rejected. He applied the same reasoning to the ownership of land: “Let us persist, then, in wishing to set up a theory of property on the foundation of law and justice and let us refuse to believe that individual appropriation of the land is sufficiently motivated by the needs of cultivation, which is a theory, whether true or false, to which we can always raise the objection that for is devoid” (Walras Reference Walras2010, p. 29).

Although one would think that Mill’s utilitarianism would have led him to reject a natural law framework for analyzing the injustice of specific property institutions, his arguments resemble those of Walras.

Unlike Walras, however, Mill did entertain a utilitarian justification for land ownership in the following passage: “No man made the land. It is the original inheritance of the whole species. Its appropriation is wholly a question of general expediency” (Mill Reference Mill1904a, p. 295). It is also important to note that Mill extended his argument against the unjust ownership of property by noting that landed property had often been acquired unjustly through dispossession: “The social arrangements of modern Europe commenced from a distribution of property which was the result, not of just partition, or acquisition by industry, but of conquest and violence” (Mill Reference Mill1904a, p. 268).

While both argued that receiving income from the ownership of land is illegitimate, receiving income by putting land to use with capital equipment is not. Profiting from the growing of food or the exploitation of natural resources through one’s own effort or through one’s ability to organize production was recognized as just by both authors. The inherent exploitation of labor or extraction of surplus value are not part of either argument, although sometimes Mill veered close to a more Marxist framework.

Granting the legitimacy of income from the ownership of the means of production, however, does not imply that the ownership of capital by a single class that is a minority of the population is desirable. Walras, for example, argued:

Mill’s own analysis of the state of the proletariat in Victorian England is equally vivid.

Note that Mill did suggest elsewhere that alternative institutions of private property might create a more humane form of capitalism. Nevertheless, it is clear in this and other passages that Mill connected oppressive work conditions and unjust remuneration to the working poor as a product of Victorian institutions of capitalist property.

Unlike the standard assumptions of fixed preferences that are considered to be attached to each individual, Mill and Walras both thought that what we value is very much a product of the society in which we live. Walras made a cogent and impassioned argument that humans are necessarily social creatures whose understandings and sources of pleasure come from our social organization.

In Mill’s Autobiography, which was published posthumously, he went further and described the problematic traits of selfishness that inhibit contributing to the social good as a peculiar characteristic of capitalism.

Both believed that alterations in property relations could enhance solidaristic norms. For example, Walras argued that the rise of worker-owned credit unions would lead these institutions to enhance solidarity amongst firms, even though they remained in competition with each other: “Undoubtedly, this enterprise is an enterprise of workers; but these workers all vouch for each other and consequently, the guarantees of morality, ability and success of each one of them are corroborated by the same personal guarantees of all the others” (Walras Reference Walras1865, p. 57). The implication is that cooperative credit institutions owned by workers impose norms that would ensure honesty and transparency among all worker-run enterprises.

Mill agreed that the rise of cooperatives could lead to a new type of competition. Helen McCabe argued in her book John Stuart Mill: Socialist that Mill envisaged a transformation of competition with the decline of capitalist work conditions (McCabe Reference McCabe2021). Like Walras, Mill described a new form of friendly economic contests that would strip competition of its cutthroat and exploitative characteristics.

Mill’s discussion of working-class conditions was far more detailed than Walras’s, but their viewpoints were similar. They both viewed property relations as social creations that can be modified by conscious human action. Social norms were seen as malleable and not simply a product of human nature that is implacably selfish. Thus, Walras and Mill argued that an alteration in property relations could play a major role in alleviating the poverty and misery facing the working class as well as creating solidaristic norms distinct from those of nineteenth-century capitalism.

IV. NEW REGIMES OF SOCIAL OWNERSHIP: FROM THE ENDORSEMENT OF COOPERATIVES TO THE STATE OWNERSHIP OF LAND

Mill and Walras both believed that cooperation would foster creativity amongst a much larger proportion of the working population than without cooperation. For them, socialism was associated with increasing the independence of workers. Mill differed from Walras only by stressing—as the last quotation of Mill indicates—that such a project should also free women from patriarchal restrictions in the household, a perspective that Walras thoroughly rejected.Footnote ¹

However, both stressed the importance of cooperative association. For Mill, all workers participating in an enterprise should be owners, and cooperatives violate their social ethos if they hire non-owner workers to labor within the enterprise. Thus, worker cooperatives like Mondragon fall well short of Mill’s proposals for social ownership. Association based on equal social status is paramount.

When Walras was younger, his enthusiasm for cooperatives was similar to Mill’s. In a series of lectures published in 1865, Walras focused less on self-actualizing activities stressed by Mill and more on the proposition that overcoming poverty requires the elimination of taxes that largely fall on workers and the establishment of cooperatives: “There are two ways in which you can obtain a fair and appropriate share of the treasure trove of social wealth. One is to lighten the tax burden on salaries, by reforming the tax system…. The other is to refine the way in which your savings are capitalized, by developing the principle of association” (Walras Reference Walras1865, p. 32).

Walras at the time clearly believed that cooperatives represent the ownership form of the future. He argued that such associations would combine the social benefits of democracy with the economic benefits of market competition: “But what, in my opinion, is an arduous and truly commendable undertaking is to pretend to be and always remain a radical democrat as well as an orthodox economist; it is to make and maintain with oneself the commitment never to sacrifice political economy to democracy, nor democracy to political economy” (Walras Reference Walras2010, p. xii).

Thus, he hailed the spread of cooperative enterprises in England, France, and Germany and expected their growth to continue: “It finally opens up a space where political economy and democracy can meet, join hands and unite their destinies. This is the fact that I wish to acknowledge. It will be the honor of the daring pioneers of Rochdale, of the intelligent Parisian cooperators, of the valiant selbsthulfers of Delitsch, to have paved the way for its striking appearance” (Walras Reference Walras1865, p. xii).

There is one important difference in emphasis between Mill and Walras on cooperatives. Mill stressed the growth of workers and consumer associations but wrote little about cooperative finance. However, for Walras, the rise of credit unions was the key development that would accelerate the spread of cooperatives. Credit unions could use the new savings of workers to fund more cooperatives and permit a type of financing that relied on a stream of contributions from workers rather than a one-off purchase of shares by the rich. By identifying a mechanism for the spread of cooperation, a thirty-year-old Walras in the mid-1860s thought that the future of democratic socialism was bright.

Indeed, Walras backed up his belief with action. Starting in 1865, he contributed money and his time to the management of a cooperative financial institution that was designed to provide support to other cooperative associations. He eventually became a director of the bank. However, it ceased operations in 1868, and Walras was appointed professor of political economy at the University of Lausanne in 1870 (Walras Reference Walras and Goutte1993). Perhaps political economy would have evolved differently if Walras had been a successful director of this bank.

By the 1890s, however, his emphasis had changed even if his favorable view of cooperatives had not. Instead of focusing on the creation of cooperatives as the fundamental process necessary to construct a more humane economy, he argued for a radical change in property relations through the nationalization of all land and, by extension, natural resources. The connection of this proposal to Henry George’s ideas is clear, but unlike George, who proposed the taxing of pure rent to fund government activities, Walras proposed that the state should own the land and then lease it to enterprises that would bid for its use. It is unlikely that Walras would have argued that the government should provide cooperatives with privileged access to the bidding process, for this would have contradicted his commitment to laissez-faire competition. However, Walras assumed that cooperatives would be able to contend effectively against competitive capitalist enterprises and that the state would use regulatory powers to eliminate the exercise of monopoly power.

According to Walras, cooperatives would be an important part of a new society, but they could not and should not serve as vehicles of social reform. The focus of worker-owned enterprises would necessarily be on competing successfully in the market and attempting to maximize value added. Land nationalization and the related elimination of all taxes on wages and salaries was key to the construction of his socialist ideal.

We are left with the paradoxical finding that the pre-eminent laissez-faire economist of the late nineteenth century argued for state ownership of all natural resources. For Walras, the revenue from leasing government-owned assets to the highest bidder would permit the elimination of all taxes on wages and salaries. The increase in income would allow workers to increase their personal savings, which would, in turn, allow worker-owned credit unions to finance the expansion of cooperatives.

Mill would have been skeptical of Walras’s advocacy for the state ownership of land without considering the specific historical preconditions that form any given property rights system and property (De Mattos Reference De Mattos2020; Manioudis Reference Manioudis2022). Mill was an advocate for land reform throughout his life, but he worried about the state ownership of property because he feared such an arrangement would lead to much greater inefficiency and increase the power of the state (Persky Reference Persky2016, p. 104; Salvat Reference Salvat2021). Cirillo notes that Walras had similar concerns since he insisted that the state as the owner of land should serve only as a leasing agent and never administer land directly (Cirillo Reference Cirillo1980, p. 300). Despite this proviso, Walras’s decreasing emphasis on the importance of cooperatives and his proposal for a radical extension of state ownership connect with the general movement of socialist ideology away from models of decentralized social ownership and towards more state involvement in the management of political economic life.

V. MILL VERSUS WALRAS ON ECONOMIC LIBERTY AND COMMUNAL OWNERSHIP

The statist orientation of Walras’s arguments for natural resource nationalization contrasts sharply with Mill’s interest in the decentralized communal experiments that flowered during the first half of the nineteenth century. Moreover, Mill’s willingness to consider the moral superiority of a communist future—if it could evolve non-violently and relatively spontaneously—contrasts sharply with Walras’s more rigid commitment to a market socialist order.

Walras had little to no interest in the village-level experiments of Owen, Fourier, and Étienne Cabet that received considerable attention during the first half of the nineteenth century. A just society required the more egalitarian and solidaristic ownership of productive assets either through cooperatives or through the state but nothing more. For Walras, the maintenance of market institutions was essential för the construction of a good life, and, contrary to those he consistently criticized such as Proudhon and Blanc, he saw no contradiction between increased cooperation among people and market competition.

Mill was much more interested in speculative experiments in alternative living arrangements. His commitment to individual liberty made him consistently critical of Owenite experiments, which seemed to Mill to possess an authoritarian core. However, Mill also understood the market economy denied liberty to masses of workers. Factory systems were tyrannical, and poverty limited workers’ ability to choose a life worth living. Given this Victorian reality, Mill argued that small-scale attempts to create communal property systems were desirable as long as individual liberty was not sacrificed to efforts to equalize living standards (Neuhauser Reference Neuhauser2018, p. 301). He was especially attracted to Fourier’s attempts to maintain relatively egalitarian property arrangements while encouraging individuals to find pleasure in competing to provide goods and services that the members of Fourier’s Phalanx desire (McCabe Reference McCabe2021, pp. 124–125). Mill realized that this promotion of friendly competition permitted modest amounts of economic inequality that could be unjust if the differential material rewards that participants received were not based on abstinence or effort. However, Mill believed that individualistic material incentives were necessary in the nineteenth century to create an economy that could successfully meet the needs of the people. Mill argued that norms might change in the future so that a more just system of distribution could emerge. Until then, Mill believed, small-scale experiments in communal living could point the way forward.

This speculative characteristic aspect of Mill’s evaluations of socialism and communism makes him difficult to interpret, since distinct passages on socialism, communism, and cooperation in Principles, Chapters on Socialism, and other texts often appear to be arguing against themselves. To make sense of these apparent contradictions, one must attend to the context in which he develops his arguments. Walras’s arguments are more transparent and less subtle.

These distinctions between Mill and Walras are especially apparent when Mill uses a Ricardian framework to consider the possibility of a unique type of stationary state. Unlike Ricardo, Mill suggests that the spread of mass prosperity will shrink profitability, reduce capitalist investments, and allow for the creation of cooperative property arrangements (Neuhauser Reference Neuhauser2018, p. 305). The constant grubbing for material advantage would recede and permit the creation of a more solidaristic ethos that would more effectively promote individual liberty. Walras used an implicit class analysis to argue for property rights reform, but he displayed little interest in theories of economic evolution. Moreover, he probably would have noted that if workers obtained an increasing share of the economic surplus, they would become owners of capital and use part of that surplus to strengthen the competitive position of their enterprise. Thus, there was little reason to assume that the reduction of profits to individual capitalists would reduce the profits or the dynamism of the economic system.

For Walras, the promotion of individual liberty and a more egalitarian economy required the significant reshaping of property relations within a market economy. Mill wholeheartedly endorsed this general framework, even if he would have disagreed with Walras’s key proposal on land ownership. However, Mill also believed that a truly just economy required something more than market socialism. He endorsed small-scale experiments in communal ownership because he looked forward to a time in which a shift in norms could establish a system of economic distribution disconnected from economic incentives. This openness to visions of nineteenth-century, pre-Marxist communism sharply distinguishes him from Walras.

VI. MILL’S AND WALRAS’S THOUGHTS ABOUT THE POSSIBLE EMERGENCE OF SOCIALISM

Neither Mill nor Walras was a revolutionary. They feared the chaos and disruption of revolutionary upheaval and pinned their hopes on gradual reform. In addition, both were skeptical of the ability of workers to direct social evolution through political action. They argued that members of the working class must become better educated so that they could be more responsible citizens. This disdain for the actual capabilities of the working poor was a constant theme in all their political writings, as was the fear of social upheaval.

For example, Mill wrote in his posthumously published Chapters on Socialism:

Given this hypothesized reality, Mill believed that capitalism would continue to survive.

Walras also believed that socialism could not establish itself quickly. However, he was more optimistic than Mill. Walras linked the coming of socialism to the development of more adequate social scientific expertise.

In comparison to Mill, Walras expressed more confidence that workers could respond to the appropriate legal framework to build a more solidaristic society. However, he provided no serious analysis of how capitalism might evolve so that the laws he desired would be passed. Unlike Marx, neither Mill nor Walras emphasized that working-class political parties might be the appropriate vehicle for introducing effective socialist policies.

Joseph Persky noted that Mill’s analysis of the stationary state provides an opening for significant socialist reform, since in Mill’s analysis the decline of profitability and the stagnation of private investment were associated with a rise in workers’ real earnings rather than declining productivity in agricultural production (Persky Reference Persky2016, p. 75). As Mill’s own discussion of business cycles suggested, however, this prediction ignores his argument that economic disruptions often restore dynamic capital accumulation and block the coming of the stationary state (Mill Reference Mill1904b, pp. 218–220). In any event, Mill himself threw cold water on the argument that cooperatives could grow organically through competition with capitalist enterprises. In his discussion of social ownership in Chapters on Socialism, his institutional analysis led him to conclude that worker-run enterprises would be less entrepreneurial and dynamic than their capitalist counterparts.

If Mill’s suppositions about how worker-run enterprises would operate are correct, then the gradualist evolutionary dynamic he proposed in Principles lies in ruins. Contrary to his caution about political upheaval, one would need a radical political intervention to establish mandatory profit sharing and the eventual creation of workers’ cooperatives. The same could be said for Walras’s land nationalization proposal. One does get the sense in some of their writings that neither Mill nor Walras really believed that socialism was a possibility. They viewed their visions of socialism as constituting a more acceptable moral alternative to capitalism, but the struggle to create a new system of property might not be worth the cost.