Juan Polo y Catalina: Smith against the Neophysiocrats

His “Informe sobre las fabricas e industria de Espana” contains—although not always in an explicit manner—one of the clearest and most intelligent versions of the Smithian doc­trines in early nineteenth-century Spain.

Nevertheless, two clarifications should be made: Polo y Catalina made a partially industrialist interpretation of Smith that aligned him more with Jean-Baptiste Say’s Traite d'economie politique—he was familiar with Say’s French version of the book as early as 1804—and furthermore, his main goal was to use Smith’s doctrines as a weapon against the ideas of neophysiocrat authors, such as Garnier, who had had a great impact in Spain.

Garnier’s work was known first through the translation of his Abrege, which was used for teaching economics in the so-called Sociedades Economicas de Amigos del Pais (the predecessors of the university chairs in which economics was taught) and later on with the French translation in 1802 of Wealth of Nations. Its volume 5 of bibliographical notes, according to Polo y Catalina, tried to reconcile, although it really only confused, the par­tially modified ideas of the physiocratic economists with those of the Scottish economist.⁷

Polo y Catalina had read and was highly familiar with Garnier’s translation of Wealth of Nations, and he recognized some merit in it, such as that of correcting Smith’s doctrine through new consideration of the consumption of craftsmen as “productive.” Up until then, nonagricultural activities had been considered as unproductive activities, some­thing that proved unsustainable at this point (Polo y Catalina, 1804, 23-26).

Aside from this partial acceptance of Garnier’s ideas, Polo y Catalina strongly attacked the same author for one of his arguments in which he still defended physio- cratic ideas, and he did so by referring directly to chapter 9 of book 4 of Smith’s work, which he quoted literally in the Spanish translation of 1794: “If the people who are engaged in activities other than the merely agricultural ones, do not deserve to be classi­fied as sterile, nor should they be called unproductive” (1804, 24). If, in his arguments, he directly quoted Smith’s text, it was because he felt that Garnier in the French translation of Wealth of Nations did not sufficiently clarify the idea of productivity of the theoretically idle classes for the physiocrats.

One of the most critical points directed at Garnier was his reinterpretation of Smith according to an agrarian view when he refers to one of his more sophisticated arguments, according to Polo y Catalina, taken from Swiss economist and partial physiocrat Jean Herrenschwand in defense of physiocracy: “Only by deprivation does one’s own subsis­tence cease to enjoy part of the funds assigned to it and also by depriving oneself each year of a portion of the income and wealth which society has assigned to it, is it possible to increase it to some extent” (ibid., 13).⁸

With this criticism, he wanted to say that craftsmen and merchants also obtained profits due to surplus, not because of a deprivation of their expenses, which was Herrenschwand’s thesis and shared in part by Garnier, but as a result of the productiv­ity of their activities. Therefore, consideration of the unproductivity of craft work had to disappear. The agrarian sectors would be relieved as they would not have to tend to the manufacture of craft work, and so the specializations derived from the principle of division of labor and the incorporation of machinery would lead to an increase in productivity.

In order to support his arguments, Polo y Catalina had to dismantle the analytical apparatus that supported the Tableau Economique, which justified in turn the exclusive pro­ductivity of agriculture.

Such an argument was completed with the idea that thanks to the principle of divi­sion of labor and its greater applicability to manufacturing and commercial activities “the marvelous advantages, which come from the division of labor, do not show their effects in any area more than in the arts and trade; and the agricultural tasks are deprived of these benefits as they are not naturally analogous to receiving so many subdivisions” (ibid.^060, 30). This reinforced his industrialist position.

The already mentioned criticism of Garnier’s attempt to combine Smith’s ideas with those of the physiocrats once again reflects Polo y Catalina’s extensive familiarity with Smith’s main work, from which he drew a relevant concept, that of production for change, as a prerequisite for the specialization of labor in developed societies. He thought that modern societies should not establish their guidelines for the development of personal criteria for abstract systems based on an exclusive consideration of isolated social groups, for these groups are influenced by ideas of voluntary and utopian frugality, which do not correspond to the precapitalist model of development, whose commercial and industrial nature was considered as the correct road to follow (Sanchez, 2005, cvi).

Basically, behind such severe criticism were the rejection of strategies for agrarian development and of formulas of a mixed nature in which farmers planned to also carry out manufacturing activities, a position that was supported by such traditional authors as the influential Conde de Campomanes.

He was especially concerned with deauthorizing proposals that defended agrarian specialization in Spain, based on the primary products to be exchanged for manufac­tured goods coming from abroad (as the Marquis of Mirabeau had proposed for Spain), for in such a situation, the value added in the productive processes would be inclined in favor of foreigners:

If we accept that foreigners bring us manufactured goods in exchange for the surplus fruits and even though this merely represents what is consumed, and thus maintains the Nation’s capital intact, the result will be that these funds leave the country, and the potential increase in our assets would be lost, while a greater capital is created for others, which even though they do not represent their fruits, they do represent those of the Nation which furnishes these excesses and assumes direct control over them. The failure to control what comes in from abroad will damage the country's own interests. (Polo y Catalina, 1804, 36).

The enemies to be defeated were not only the neophysiocrat authors but also the Spanish economists and politicians who used these ideas to prevent the application of industri­alist strategies, which Polo y Catalina, from his privileged vantage point in the Office of Public Works and the Treasury Secretariat of the Spanish Government, saw as the cor­rect road to follow.

From this point of view, what Polo y Catalina was doing was supporting the real econ­omy, while being fully aware of the comparative economic backwardness of his country, and as a result, he abandoned the neomercantilist ideas that he himself had studied as a student of civil economy and trade in the Economics Chair of the Real Sociedad Economica Aragonesa de Amigos del Pais. There he was taught the ideas of Antonio Genovesi, Cantillon, Condillac, Herrenschwand and Garnier above all, and partially those of Smith, through Condorcet's Compendia (Esquisse). It was not until the beginning of the nineteenth century that the writings of Smith, Say and Nicolas-Franςois Canard began to come into play.

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