Subjectivism and Economic Analysis: Essays in memory of Ludwig ...

6ENDOGENOUS CHANGE,OPEN SYSTEMS ANDPROVISIONALEQUILIBRIUMMaurizio CasertaAlthough he dismissed it as an essentially inadequate construct for aproper understanding of the market process, equilibrium was arecurrent theme in the work of Ludwig Lachmann. He rejected theidea of equilibrium as an attainable position of rest in whichindividual plans become mutually compatible; he also rejected theidea of equilibrium as a position towards which the economy tendsbut may never actually reach. The only notion of equilibrium thatLachmann thought should be retained was the notion of individualequilibrium. 1 This is the axiom of the purposeful individual.For Lachmann, the market process was to be viewed as asequence of actions and interactions. It would be understood bymeans of a voluntaristic theory of action where the freedom ofindividuals’ will would represent a fundamental assumption. 2 Theinclusion of this chapter in a memorial volume for LudwigLachmann is justified by this emphasis on action, which it shareswith all Austrian thinking. Such an emphasis enlarges the scope ofeconomic analysis: in mainstream economic analysis only reactions,that is, responses to known stimuli, are permitted; equilibrium isprecisely a state of affairs where no further reaction is justified.When action is contemplated, equilibrium can be either dismissedaltogether, or reconceived as identifying a less definitive state ofaffairs. The latter route is followed here.104