Jean-Charles Leonard Sismondi was born in Geneva (1773) into an upper-class Calvinist family.
Like many Swiss intellectuals, Sismondi was forced to emigrate, first to England during the Swiss revolutionary episode (1792-94), and then to Italy (Tuscany) in the last years of the eighteenth century, before eventually returning to his native Geneva in 1800.
He continued to visit Italy regularly where he collected material relevant for the composition of his History of Italian Republics (1808-17). He also claimed to find in Italy the so-called origin of his family, the Sismondi of Pisa, and, subsequent to this discovery, changed his name from “Simonde” to “Simonde de Sismondi”. His own personal experience of an era saddled between revolution and reaction and his familiarity with different political traditions (both republican and liberal) encouraged him to elaborate an idiosyncratic interpretation of the economic and social context in which he lived. His different positions on various issues were shaped by his lifelong preoccupation with finding the moral and cultural means necessary to ensure political liberty and economic development while qualitatively improving social well-being (measured not as an abstraction but concretely in terms of the genuine bonheur of all members of society). Within the much larger framework of his collected works, Sismondi’s economic writings represent quantitatively only a minor share (albeit one which is undeniably central) of a much larger intellectual project. Actually, Sismondi’s contemporaries were more familiar with his work as an historian than as an economist. For example, the Edinburgh Review called him the ‘first living historian’ (Edinburgh Review, 1815, vol. XXV: 437).Sismondi actively participated in the Coppet circle with Benjamin Constant and Germaine de Stael. These intellectual associations influenced his attempts to reconceptualize at once the relationship between the individual and society and ways of creating shared values grouped around the idea of the public good.
The English tradition of historical and constitutional thought as propagated by jurists such as Jean-Louis Delolme, William Blackstone and Richard Wooddeson had an important formative influence on Sismondi’s conviction that it was necessary to establish institutional guarantees ensuring political and civil liberty within the framework of a well-functioning economic system. In Italy he discovered the tradition of civic humanism, which, with its central focus on the importance of civic virtues, became a pivotal reference for him.Sismondi also kept in touch with the anglophone world through friends and family. Sismondi’s familiarity with British concerns had a great impact on his understanding of the precise working conditions of the then most advanced capitalist economy, and his writings were read and discussed in Britain as well - for example, Thomas Carlyle translated his ‘Political Economy’ for the Edinburgh Encyclopedia.
Sismondi’s economic writings can be characterized by their distinctly historical approach, which led him to analyse political and economic phenomena in their respective contexts and eclectically to enlarge his research interests to various fields of knowledge and experience. In contrast with “pure political economists” such as Ricardo and his followers who, in Sismondi’s eyes, were guilty of abstracting economic laws from their social and historical context, Sismondi tried to establish links between economics and other disciplines, first politics, in order to give a more subtle account of economic causality. In this regard, he always claimed to be faithful to the prior approach of Adam Smith.
In Tuscany, Sismondi led the life of a gentleman farmer, taking part in various agrarian activities and regularly examining and experimenting with new technological instruments and processes for improving agricultural production. The outcome of Sismondi’s time in Tuscany was his Tableau de l,agriculture toscane (1801), which constitutes the first sketch of an institutional analysis that would become the distinguishing feature of his economic writings.
This study would be followed by a two-volume work designed to clarify how wealth was created and distributed: De la richesse commerciale (1803). In this work, Sismondi criticized the centralizing, monopolistic and protectionist economic policies of Bonaparte and their effects on his native Geneva, which was a small, open market economy based on free trade and a highly decentralized network of producers of high quality goods.In 1819, after the post-Napoleonic war depression, Sismondi published his magnum opus, the Nouveaux principes d’economie politique (second edition, 1827), essentially a development of his earlier article ‘Political Economy’ (written in 1817, translated by Carlyle and published in 1825 in Brewster’s Edinburgh Encyclopedia). Underscoring the importance of historical time and transition phases, Sismondi notably defended the idea that overproduction is not fortuitous, but inherent to an economy based on wage labour. The advent of modern capitalist economies represented in his eyes the emergence of ‘an entirely new state of society, [a] universal competition which degenerates into hostility between the wealthy class and the working class’ (Sismondi 1827, 2: 434): thus, modern capitalist economies, endemically generate pauperism and unemployment, and, as a consequence, are at their root politically unstable.
Sismondi’s most striking thesis (famously expressed in the Nouveaux principes among other places) is about the balance between consumption and production. In modern capitalist economies in which property is concentrated in a few hands, workers have no choice but to accept the lowest possible wages. This downward pressure on wages leads necessarily to under-consumption. On the other hand, capitalists produce for an invisible, potentially boundless market, and are forced, by competition, to produce the most possible goods at the lowest possible price, leading necessarily to overproduction. This mechanism constitutes a vicious circle, in so far as mass-production and machinery further exacerbate inequalities and market instability and certainly do nothing to attenuate poverty.
Criticisms of this argument - as made by R. Torrens, J.R. McCulloch, T.R. Malthus, J.-B. Say, D. Ricardo - as well as Sismondi’s diverse responses to them, constitute an important chapter in the controversy over Say’s law of supply and demand and, therefore, are an integral part of the history of economic thought. Sismondi’s approach to political economy has also been recognized as the first attempt to articulate a genuine dynamic analysis of economic processes as well as one of the most adequate contemporary accounts of transitional phenomena. As Schumpeter put it: ‘his great merit is that he used, systematically and explicitly, a schema of periods,... that he was the first to practice the particular method of dynamics that is called period analysis’ (Schumpeter 1954: 496).
Sismondi’s last economic work, Etudes sur l’economie politique (1837), itself part of a much larger work - Etudes sur les sciences sociales - contains no major theoretical novelty, but summarizes all of Sismondi’s main concerns (regarding slavery, the machinery question, landed property, and so on) and constitutes a strong plea against industrialism and the concomitant glorification of production, a matter which at the time was widely debated among advocates of economic liberalism.
Sismondi’s plea in favour of erecting a ‘social power’ to moderate the ‘wealth power’, and Marx’s influential characterization of Sismondi in the Communist Manifesto (the ‘head of the school of petty-bourgeois socialism’) have led him to be criticized by both liberals and socialists alike and have contributed to his unwarranted reputation for having been an indecisive, middle-of-the-road economist. Nevertheless, Sismondi had a crucial critical influence on economists concerned with the question of industrialization, running from French liberals such as J.A. Blanqui to the Russian Populists; and Sismondi is regularly ‘rediscovered’ on the occasion of each new economic crisis.
Francesca Dal Degan and Nicolas Eyguesier
See also:
French classical political economy (II); French Enlightenment (II); Institutional economics (III); Thomas Robert Malthus (I); Non-Marxian socialist ideas in France (II); Political philosophy and economics: freedom and labour (III); Population (III); Poverty (III); David Ricardo (I); Jean-Baptiste Say (I); Technical change and innovation (III).