Perroux, François (1903–1987)

Abstract

French economist, best known for his construction of a theoretical system of economic power. He was born in Lyon and his academic career led him to the Sorbonne and from 1955 to 1975 to the Collège de France. A critic of neoclassical economics, Perroux shared some of the concerns of the American institutionalists, but went beyond them by constructing a system of economic analysis – the only one at his time – that rivals conventional equilibrium economics. This system, comprehensive and consistent, is grounded in an all-pervasive ‘domination effect’ that reflects the inequality of economic agents with respect to their economic power. In equilibrium economics the actions of the economic agents are considered coordinated by an adequate amount of equality, leading to mutual concessions that in turn bring about adjustments and the removal of disturbances. Such an approach, according to Perroux, is contradicted by the facts of economic life and fails to reveal the role of economic power in the market. Where conventional economics stresses coordination among equals and their functional interdependence, Perroux sees a relationship of subordination among economic agents, with the latter either dominating or dominated. Just as Schumpeter, who influenced Perroux and about whom he wrote a book, had revealed the dynamics of innovation, so Perroux disclosed the dynamics of inequality. He acknowledged that there were other theories of monopolistic market situations that shared features of his own ideas, and himself introduced Chamberlin’s work to French readers, but pointed out that these theories covered only special cases that would be more adequately handled by a general theory such as that developed by him.