There Are at Least 7 Different Approaches to “Equilibrium” with Additional Dimensions to Consider

A term which has so many meanings that we never know what its users are talking about should be either dropped from the vocabulary of the scholar or “purified” of confusing connotations. (Machlup 1958)

The continuing use of the word “equilibrium” by different people to mean different things justifies yet another brief examination. No pretense, however, is made at completeness.

I can think of at least seven different approaches to equilibrium. These are not mutually exclusive and are, indeed, related in important ways:

1. equilibrium as a balance of forces
2. equilibrium as a state of rest (a stationary state)
3. equilibrium as a state of uniform movement (a steady state — of which 2 is a special case)
4. equilibrium as a constrained maximum
5. equilibrium as an optimum
6. equilibrium as rational action
7. equilibrium as a situation of consistent plans.

In each case at least two dimensions can be identified. Equilibrium can relate to the entire economy (general equilibrium) or to a subset of the economy (partial equilibrium) or to the individual. Equilibrium can be considered for a single all-encompassing period (static equilibrium), or for a succession of self-contained periods (temporary equilibrium) or for a succession of related sub-periods (intertemporal equilibrium).

—Peter Lewin, Capital in Disequilibrium: The Role of Capital in a Changing World, 2nd ed. (Auburn, AL: Ludwig von Mises Institute, 2011), 15-16.