Dupuit’s political economy: between singularity and dogmatism

Dupuit’s decisive contributions to public economics attracted the greatest attention from historians of economic thought. Although more than half of his works are related to further themes in political economy, this other side of his thought has long been neglected but rediscovered recently.^[91] The variety of issues he tackled is so broad that it cannot be dealt with extensively in this chapter.

Public utility and property rights

We have shown above that Dupuit’s work on utility came from his reflections as an engineer working on public infrastructure. His developments on utility were involved in an important controversy among liberal economists, which culmi­nated around 1848, about the foundations of property rights. Politically, 1848 was marked by a revolution that led to the proclamation of the Second Republic on 27 February 1848. On the intellectual level, there was a certain effervescence of publications on property-related issues: socialists sought to criticise its merits, or called for its reform, while liberals wanted to consolidate the economic, philo­sophical and moral foundation on which private property was based. Numerous articles and contributions appeared around 1848 on the question of property, nota­bly about Adolphe Thiers’s work De lapropriete. In a nutshell, in the liberal camp the majority, proponents of natural law, opposed the supporters of utilitarianism. For Dupuit, this controversy was an opportunity to develop singular views on property rights.

His general ideas on property are set out in a two-part article published in the Journal des economistes in 1861,^[92] titled “Du principe de propriete.

The first farmers therefore worked on fertile land, on land that the tribe had conquered, lost and reconquered a hundred times at the cost of the blood of its warriors, on land where the herds had grazed from ancient times.

(1861a, 591-2)

Conversely, Dupuit continues:

the consent of society, a human convention, and by this very fact different according to time and place, is the true origin of the ownership of land and of all property Natural law has nothing to do with this question.

(1861a, 592)

Considering that property rights are neither natural nor sacred, he favours public utility as a criterion for the appropriation of wealth:

The principle of justice, with regard to property, is a vague, uncertain prin­ciple, variable according to the point of view which one adopts................................................................... The

principle of public utility is the only one that provides the solution to all the many problems of the ownership of wealth.

(1861a, 638)

Dupuit’s ideas were disapproved of by many liberal economists from the Societe d’economie politique.^[93] He concretised his general views on utility in debates on multiple subjects, applying to each of them his utilitarian principle: “there is no absolute property right in society; each time public interest is involved, the law intervenes to limit, to contain individual rights” (1861a, 627).

Inheritance laws. Inheritance laws were the object of an intense debate in France from the 1840s. Most French economists supported unlimited testamentary freedom, regarded as a consequence of natural rights applied to inheritance.^[94] Dupuit, influ­enced by Rossi’s ideas, put forward his principle of public utility instead: “society has to regulate property rights and inheritance so that the sum of everyone’s enjoy­ments is as high as possible” (1861a, 603). How to implement this theoretical princi­ple? He dealt specifically with this question in 1865 in the Journal des economistes, in response to Jean-Gustave Courcelle-Seneuil’s argument in favour of unlimited testamentary freedom (1865c). He considered that arguments about morality, as well as reflections based on natural law, lead to a dead end. Indeed, how can one decide between the natural right of some (parents) to choose what will become of their fortune, and the natural right of others (children) to appropriate a part of the family wealth? Thus, he rejects both the “omnipotence of the State” (1865c, 658), which would result in the capture of bequests, and the total freedom of wills. In order to maximise social utility, Dupuit tells us, the State is justified in limiting testamentary freedom, because the latter would provoke more harmful than desirable behaviour: it would not improve the discipline of children in families but would risk deteriorat­ing the State’s finances if the latter had to take charge of a number of disinherited children. It was therefore on the grounds of public utility that Dupuit defended the principle of the hereditary “reserve”,^[95] enshrined in the Civil Code of 1803. Thus,

[p]roperty rights and testamentary law are conceived pursuant to the princi­ple of public utility, and their limits also must be drawn in accordance with it.

(1865c, 660)

Immaterial property rights. Dupuit engaged in a second debate related to the overall issue of property rights: the controversy about immaterial property (which covers literary, industrial and artistic property rights). Once again, he elaborated a singular analysis based on the principle of public utility, rejecting most ongoing ideas on the topic. Judging that the most significant concern in this respect is the insufficient dissemination of intellectual works, Dupuit argued for “communism for literary property” (1861a, 624) in which private property rights on literary works would be reduced to a minimum. Such a legal arrangement, giving everyone printing rights over off-patent works, would allow their widest diffusion and maximise public utility, as it would protect their integrity, since the heirs of authors or artists would have no specific editing rights:

Today most [literary works], having fallen into the public domain, can be printed by everyone in all possible formats.... I say that this is a great ben­efit Today, everyone, however poor, can have a library, provided that

they only put masterpieces in it.

(1861a, 623-4)

Expropriation. With the same criterion of the maximisation of public utility, Dupuit reflected on the conditions under which it is desirable to proceed with an expropriation. In the entry “Eau” in the Dictionnaire de l^,economie politique, he questioned the conditions under which it is legitimate to run navigation or water transport routes over private land.

Any infringement of the free disposal of property is a damage which is not always repaired by the reimbursement of the material loss suffered, and recourse to this system should only be made when the public interest is strongly involved. If one could say to one’s neighbour, I need your house to enlarge my factory, and I will pay you the value of it as estimated by experts, there would no longer be any property.

(1852, 555-6)

Here again we find Dupuit’s utilitarianism, according to which, far from being fixed, property rights must evolve, in time and space, according to what the public interest requires, even if the property rights of one or more individuals may be challenged from time to time.

Dupuit on free trade: La liberte commerciale (1861)

1860 was an important year for trade policy in France as the Cobden-Chevalier free trade agreement^{[96] [97] was signed with England. It was in support of this change in the customs regime that Dupuit produced his essay titled La liberte commerciale,140 which put together three articles published in the Revue Europeenne. La liberte commerciale is Dupuit’s unique political economy book. It aims at “rigorously demonstrating that free trade is always good; that it benefits all nations, regardless of the gifts and skills of residents, the abundance of resources, the soil fertility or the mineral wealth” (1861b, 415).}

Dupuit’s demonstration is grounded on the advantages each country can enjoy by importing commodities for a lower price than its own production would cost; this benefit is even higher when the natural endowment is poor, and commercial or food crises would be softened because of international trade. The arguments employed by Dupuit are close to the ideas of Destutt de Tracy and Adam Smith on the gains from trade, while those of Ricardo on comparative advantage were ignored, as his French contemporaries also often did.^[98]

Reciprocally, protectionism is accused of encouraging the survival of “artifi­cial industries” (“industries factices”) whose disappearance would be advanta­geous for the whole of society: “it is for [all social classes] a painful, but salutary operation; an amputation has inescapably to be done; today, it only concerns one finger, in a while it will be the hand, later it will be the full arm.

The most distinctive feature of Dupuit’s free trade analysis has little to do with economic theory: his essay became famous due to his call for a total and instan­taneous free trade regime, without any specific transitional regime. Admittedly, some industries would incur temporary losses or even go bankrupt, which would be caused by previous domestic protection rather than the easing of trade restric­tions. Factory closures would necessarily lead to the migration of workers, but Dupuit adds:

[w]orkers do not move around like goods, they hold on to their work by a multiplicity of ties These considerations, which are likely to facilitate

a transition from one regime to another, cannot, however, be a reason for maintaining a system so contrary to public wealth, to material and intellec­tual well-being, as that of prohibition [protectionism].

(1861b, 469-70)

All these social, economic and territorial difficulties, Dupuit continued, are the price to pay for a more efficient system: there would be no reason to organise a progressive shift to free trade, in the same way as there is no reason to implement progressively an industrial innovation: “the great objection to commercial freedom is therefore the same as the one that could be made, and has been made, about machines. The answer is, therefore, the same” (1861b, 472).

Most French liberal economists recognised Dupuit’s efforts to clarify and popu­larise free trade opinions, but his inflexibility resulted in sharp criticism, including from authors who were not renowned for their social inclinations (Charles Dunoyer and Henri Baudrillart, for example).

Dupuit’s Malthusian ideas on population

In the first half of the nineteenth century, Malthusian ideas were extremely wide­spread among French liberal economists, while the Socialists and Catholics strongly rejected them (Faccarello 2020). The situation changed in the middle of the nine­teenth century when the French economy was characterised by a significant improve­ment in workers’ living conditions, despite the industrial, agricultural and monetary shocks that occurred during the 1850s.^[100] Dupuit took part in the intense debates about the theory of population, which arose inside the French liberal group from the end of the 1850s. From then on, most French economists, apart from notable exceptions,^[101] considered Malthus’ views as false or excessive, dogmatic and heartless. To them, the Malthusian doctrine was discredited by the recently observed improvements in workers’ economic and social standards of living, and strong population growth could even be considered as a requisite for economic progress (Breton and Klotz 2006).

Dupuit successively denounced the counterproductive effects of private charity and of public or collective assistance,^[102] which he accused of reducing individual responsibility and of encouraging improvidence and immoral practices. He con­cluded that:

after examining all the expedients devised by governments and individuals to remedy the inconveniences of food crises, we came to the conclusion that the only effective one was the great principle: Laissez faire! Laissezpasser!

(1859b, 320)

He refused public intervention, arguing that any remedy would be worse than the disease. In a paper that remained unpublished at that time, he stated, in line with Malthus, that:

When the population reaches this limit [given by the amount of food that the country can produce] the surplus that arises cannot remain there; it either expels itself or succumbs to misery. I say then that the country is overcrowded with population. When by any cause the country is not over­crowded with population and the inhabitants or only a part of the inhab­itants do not impose any restraint on themselves with regard to early marriages, the population increases rapidly and the country is promptly overcrowded.

(Dupuit s.d., 283)

Dupuit regarded poverty as the consequence of deficient individual behaviour. Lastly, if he condemned excessive population growth, he also considered that longer life expectancy would be a sign of economic and social progress. He examined the factors determining the average life duration of populations; since the main cause of deaths is the lack of subsistence, the average life duration would be “the true barometer of the population’s welfare” (1865b, 349). By correlating birth and fecundity rates with the average life duration of different French departments, he established a decreasing relation between life duration and birth rate.

Private assistance schemes, such as mutual societies (“societes de secours mutuel”) that expanded in accordance with the association principle, were equally criticised by Dupuit for encouraging irresponsibility of the poor. Through them, he targeted the very principle of insurance and risk pooling:

I am quite inclined to believe that mutual aid societies encourage improvi­dence, as does all insurance in general. The man whose house is insured, for example, takes far fewer precautions against fire than the one who runs the risk of losing everything in case of a disaster. Well, the same is true for a man who is insured for medical care and cash relief in case of sickness; he is less likely to avoid occasions for endangering his health.

(1862, 760)

Insurance has definite disincentive effects, revealing a situation that would later be described as moral hazard: the worker who is certain of receiving sick pay will necessarily become lazy and demotivated.

Finally, Dupuit’s stances regarding property rights, free trade and the issue of population reinforced his isolation inside the liberal group. His colleagues found it increasingly difficult to accept his extreme and categorical positions, which, depending on the subject, could be close to the most radical socialist ideas or, con­versely, linked to a brutal, uncompromising liberalism.