“Il mondo va da se”... ma non troppo

In line with the liberal thought, Say questioned the existence and the legitimacy of government. He criticised government interventions in private affairs in general. However, he also discussed a number of exceptions to that rule, particularly for public works.

Say embraced the motto attributed to Vittorio Fossembroni: “Il mondo va da se” (“The world turns by itself”; see Faccarello 2010, 734). People “need not been governed.... The State exists without receiving an impulse, without the need of a system of administration, a thought of government”, he wrote in Politique pratique, an undated manuscript (Say 2003, 324). Several times, during the Revolution, “all the springs of authority were broken... there was no government.... All was functioning as usual” (Say 1819, 101). When a public institution fails, people know how to replace it for the best. Governments wrongly try to influence production, to stimulate the production of goods, the consumption of which they judge preferable, or to dictate the way in which they have to be produced. Worse, they sometimes want to create manufactures. Far from being a source of wealth, these establish­ments are instead a cause of loss. The state is a bad producer because “it only acts through... the intermediary of persons, who have a particular interest different from its own - a particular interest which they prefer” (Say 1803, 382).

While Say did not view government as a central part of social organisation, he did not think it was useless, however. Two areas of critical importance that required public intervention are public goods and public works.

Besides the needs of individuals and families, whose satisfaction leads to private consumption, the sum of individuals, as a society, has its own needs as well, which leads to public consumption: it buys and consumes the service of the administrator who takes care of its interests, of the soldier who defends it against foreign attacks, of the civil or criminal judge who protects each individual against the actions of others.

(Say 1814, 921)

Public consumptions are characterised by the following elements: they concern needs that an individual could only satisfy in society, they require the intervention of an institution with a coercive power, and they promote the production and diffusion of knowledge, whose advantages for society are much higher than the individual benefits of scientists. It was thus necessary, for example, to support “a small num­ber of outstanding schools, where the stock of knowledge is not only preserved... but the field of science always extended” (Say 1803, 955). It is also necessary to give all the citizens the knowledge they need to determine their enlightened interests and the interest of society: “A nation is not civilised... when some do not know how to read, write and count” (Say 1803, 957). Thus, Say maintained that the government must build and maintain public works such as means of com­munication, which, while being in the public interest, could not be the outcome of private interest. He rejected the idea that they must be only funded by those who used them. Tolls restrict the use of utilities by many potential users who could not afford them. They deprive society from some of the potential benefits public works could provide. Denying the construction of a means of communication because its operation would not cover its costs is also ill-founded because it neglects the fact that such a means would stimulate production in the areas where it was built.

In modern economic textbooks, a public good is defined by two characteristics: non-excludability and non-rivalry. It should be noted that Say identified these two characteristics though they are not explicitly mentioned in his discussion of public consumptions. Discussing scientific knowledge that can be applied to industry, he notes that “it expands at will without being consumed, [and] it can be acquired with­out [the collaboration] of those who originally produced it” (Say 1803, 728). The State should therefore intervene to allow scientists who produced such knowledge to receive adequate monetary compensation commensurate with their contribution.

More generally, it is true, Say (1814, 278) insisted that, as a general rule, self­interest is the key to prosperity as long as private interests are in opposition to each other. In other words, competition aligns private interests with the general inter­est. However, when the interest of an individual is no longer counterbalanced by those of other individuals, self-interest becomes ineffective and socially undesir­able, and public control is required (Numa 2019). Say (1803, 330) thus recognised that “there are circumstances that can modify this generally true proposition that everyone is the best judge of how to use his industry and capital”. For example, he argued that the government could grant temporary protection for infant industries facing international competition (1803, 329-30). He also pushed for government intervention in the form of public works as a remedy for unemployment resulting from the introduction of machinery (Baumol 1997).

[A] clever administration can always find ways to alleviate this temporary and local evil. In the early stages, it can restrict the use of a new machine to certain areas where labour is scarce and demanded by other sectors of indus­try. It can provide in advance unemployed individuals with some employ­ment, by forming companies of public utility with its own funds, such as those in charge of a canal, a road, a major building.

(1803, 136)

Say (1814, 385) is very clear in his support of stimulating the private sector through public works, writing that “the government is a bad producer... yet it could pow­erfully stimulate private production with well-designed public establishments, properly executed and well-maintained, and especially with roads, bridges, canals and ports”.

Say explained that a tax could be levied in one of two ways: direct or indirect contributions. Direct contributions are based on the taxpayer’s ability to pay. Indirect contributions include taxes on the purchase of goods and services that they consume or that are the objects of their work. Indirect contributions are easier to collect, because it is difficult to assess the ability to pay. Thus, public authorities are faced with a trade-off. Nonetheless, Say was very clear: taxes should be commensurate with the taxpayer’s wealth. “It could be argued that consumption taxes are the most unequally distributed... and that, in all countries where they are the most common, the most destitute individuals are sacrificed” (Say 1828-29, 1110).

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Like Ricardo, Mill and Malthus, Say and Destutt de Tracy developed their analyses from their reading of the Wealth of Nations. They were all Smith’s heirs, and they could, for this reason, be described as classical. However, assuming the existence of a “Classical canon in economics” (Hollander 2005) can be a source of misin­terpretations. Despite long and friendly discussions, classical authors disagreed on many issues. On some central questions - the theories of prices and of income distribution in particular - Say developed his own views, different from Ricardo’s, because he did not conceive in the same way the role of demand in the determi­nation of the prices of goods and productive services. Drawing from Condillac’s analysis of trade, Destutt de Tracy developed his own views which differed both from Say’s and from Ricardo’s.