Double Competition and Market Stability in Sir James Steuart

WP ECON 09.06

19 Pages Posted: 29 May 2009

See all articles by José Manuel Menudo

José Manuel Menudo

Universidad Pablo de Olavide

Ramon Tortajada

affiliation not provided to SSRN

Date Written: May 21, 2009


In this work we deal with the theory of price determination in Steuart’s writings; in particular with the concept of Double competition. The background is the evolution of the concept of market during the 18th century. Steuart proposed a theoretical construction in order to tackle the problem of price stability. The first part of the paper presents the method proposed by the authors in order to analyse the price formation in Steuart. We are going to propose a static approach made of periods. The second part develops the explanation of Steuart’s theoretical schema. Price determination is a breakdown process inside a monetary circulation system that ensures the transaction between agents, i.e. the market. Exchange mechanism occurs on a two-fold basis: among merchants and producers and then among consumers and merchants. However, every period is connected so that price fluctuation becomes a new economic problem. The two final sections of the paper are dedicated to the required external regulation. If market is unstable, merchants do not know how to bring this stability about. Maintaining a stable price depends on an authority outside the market. Steuart propose the way towards a smooth price vibration where State and stability are inseparable.

Keywords: James Steuart, equilibrium and disequilibrium, price formation, information and knowledge

JEL Classification: B11, D50, L11, B41, D83

Suggested Citation

Menudo, José Manuel and Tortajada, Ramon, Double Competition and Market Stability in Sir James Steuart (May 21, 2009). WP ECON 09.06, Available at SSRN: or

José Manuel Menudo (Contact Author)

Universidad Pablo de Olavide ( email )

Carr. Utrera km 1
Seville 41013

Ramon Tortajada

affiliation not provided to SSRN ( email )

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics