Joseph Schumpeter (1954: 1123) described Clement Juglar as being “among the greatest economists of all times” and proposed the so-called Juglar-cycle, which lasts between eight and ten years.

However, Juglar’s contribution was not confined to the analysis of business cycles: he wrote papers on demography and on monetary and credit theories (see Allisson et al. 2009). These works are of interest not only because they are original and reflect the debates of the nineteenth century, but also because they provide a more comprehensive view of Juglar’s vision.

Juglar was born in Paris in 1819 and initially trained as a physician (see Frobert and Hamouda 2008). He defended his thesis in medicine, ‘De l’influence des maladies du coeur sur les poumons’, in 1846, but in 1848, shocked by the revolution, and the three years of the Republican regime and the 1847 recession, he decided to become an economist. There was a transition period (1851-52) when, after travelling to Algeria, Juglar published several papers on the French colonies (Frobert 2009) before turning his attention to the French population movements. His statistical investi­gations led him to identify a regular cycle of weddings, births, and so on, a retour periodique, which he progressively linked to the economic context. Then began his focus on economics: in 1856 he was introduced to the Societe d’economie politique by Louis Wolowski, and in 1860 he became one of the founding members of the Societe de statistique de Paris.

His first paper on the commercial crises was published in 1856 in the Annuaire de l^,economie politique et de la statistique. However, his most famous piece was published in 1863 and was a reduced version of the 1862 essay for which he was awarded the prize of the Academie des Sciences Morales et Politiques. At that time, Juglar was not yet a member of this Academie: after several attempts to become a member, in 1892 he was successfully nominated to Jean-Gustave Courcelle-Seneuil’s seat (Longchamp 2009).

Juglar’s business cycle approach was explicit: there are external causes that can be considered impulses for cycles, but economists need to propose a general theory that explains the recurrence (with a periodicity of seven to ten years) of this phenomenon and also its international synchronization.

Although Juglar is unequivocal that in the absence of credit there will only be mone­tary crises, provoked by decreasing metal reserves, he nevertheless considers the develop­ment of credit as a necessary element for industry’s activities. Commercial crises, defined as brutal disturbances of commercial activities characterized by bankruptcies, are the most fundamental types. But Juglar never directly blames the banks (although he some­times regrets their lack of prudence); he considers their data - especially evolution of the discount rate - as adequate barometers of the cycle. Juglar blames speculative behaviour and all kinds of excesses generated during periods of prosperity. The crises, and more specifically the liquidation phases, are seen as corrections of those excesses.

A second edition of his 1862 book was published in 1889, augmented by new data but also revealing a (slight) theoretical evolution. Juglar strengthens his explanation of the three business cycle phases, namely, prosperity, crisis, and liquidation, and better explains why they are so strongly intertwined. In the interval between the two editions, Juglar had concentrated much of his attention on monetary economics: in 1865, he edited eight volumes analysing the English banking system, and monetary and credit circulation, and in 1868 he published a collection of his articles on these topics. These investigations of monetary economics contributed to clarifying price dynamics (which initially relied mainly on speculative behaviour) as well as the role of credit in his busi­ness cycle theory.

Juglar published many papers that provide accurate and detailed historical data, and interpretations of various crises, and identify ten or so that occurred in France between 1802 and 1882. The (unavoidably) repetitive character of his work, as well as his strong desire to forecast the course of a cycle, and perhaps also his deep religious commitment - his contribution was heavily influenced by his Jansenist beliefs (Dal Pont Legrand and Frobert 2010) - led some French economists to describe him, not without some degree of irony, as ‘le prophete des crises’ (see, for example, Beauregard 1908). It should be noted also that the unexpectedly long stagnation (1873-97) did not provide a favourable context for Juglar’s predictions.

It is true that Schumpeter (1954) admired Juglar’s approach to political economy which was characterized by a systematic use of theory, history, and statistics. Schumpeter identified two fundamental points of business cycle analysis specifically highlighted by Juglar. First, a crisis is not a purely monetary phenomenon although monetary data are excellent barometers of the course of a cycle; second, the only cause of recession is prosperity, so crises are interpreted as the turning point between phases of prosperity and liquidation. Schumpeter also identified theoretical limits of Juglar’s business cycle theory, such as the absence of an analysis of prosperity factors, an element which accord­ing to Schumpeter prevented Juglar from proposing a complete business cycle theory (Dal Pont Legrand and Hagemann 2007).

It was not only Schumpeter who referred to Juglar as a pioneer of modern business cycle theory; economists such as Wesley Clair Mitchell and Alvin Hansen also consid­ered his work to be ground-breaking. However, it is less obvious that these latter had read Juglar carefully, and the translation of the second edition of his book into English in 1893 may have been the main source of his fame and reputation at the international level (Besomi 2011). Schumpeter (1954: 1124) concludes his assessment of Juglar’s contribution as follows:

[T]oday Juglar’s work reads like an old story very primitively told. And at the end of the period stands a work that, on the one hand, was entirely conceived in his spirit, and on the other hand, ushered in a most important part of the cycle analysis of our own time: Wesley C. Mitchell’s Business Cycles.

Muriel Dal Pont Legrand

See also:

Banking and currency schools (II); Wesley Clair Mitchell (I); Money and banking (III); Jean-Baptiste Say (I); Joseph Alois Schumpeter (I); Arthur Spiethoff (I).