New developments and criticisms
Finally, in addition to what has been said in the previous chapters, some developments are worth noting: they bring theoretical refinements to the previous approaches, but they also level some new criticisms at (liberal) political economy.
Utility and productive labour
Towards the end of the century, the utility approach allowed certain authors to get rid of the physiocratic distinction between productive and unproductive sectors, and of the Smithian distinction between productive and unproductive labour. The movement had already started with critics of physiocracy before the publication of the Wealth of Nations. A potential criticism was already present in Turgot’s developments on capitalist competition and the definition of an equilibrium in terms of the uniformity of the rate of profit, all things being equal. With Turgot, however, and Rα'derer after him, the link was maintained with the theory of the exclusive productivity of agriculture. Graslin could not accept the physiocratic distinction. And Sieyes developed his own point of view in his 1775 unpublished Lettres aux Economistes sur leur systeme de politique et de morale. Premiere lettre. Sur les richesses. The ultimate aim of the production of goods and services, he wrote, is their enjoyment by the consumers. Leaving aside free goods, the sole productive factor is labour and its division in society. As for work which does not directly produce exchangeable goods and services, it is “co-productive” because its nature is to promote and facilitate productive activities:
I must stress the great division between productive and co-productive labour in order to avoid certain readers being at a loss as regards political and public work. It will be asked: How does it produce wealth? In securing the fruit of labour, and in diminishing the need of means. It is co-productive, just as the merchants, the carriers, the citizens dealing with useful sciences, and the teachers are.
(1775, in Sieyes 1985, 33)
Vandermonde, however, in his 1795 lessons at the Ecole normale, took a decisive step forward (Faccarello 1989a, 1993): any kind of labour is productive as long as it provides a service that is useful to others. Referring to the political transformations that happened during the Revolution and especially the fact that any legal and political distinction between citizens had been abolished, and transposing this political equality into the economic field, he claimed that all activities must be put on an equal footing. The only criterion is to be useful to society in providing a service, a utility, to citizens. All incomes “come from equivalents obtained by services that have been supplied” (Vandermonde [1795a] 1800-1801, II, 458).
I am a cultivator; a landowner rents me his land; I pay him the price of the lease; what is this? He lends me his right to cultivate; this is a service that he provides me, and I give him the equivalent thereof. I am a singer; you love music; I allow you to spend a pleasant hour; you pay me: this is an equivalent for the service I provided you.
([1795a] 1800-1801, II, 459)
This analogy between the cultivator and the singer, Vandermonde added, “must be noted by republicans who established equality”.[227] During the same period, Germain Garnier - who sometimes objected to Quesnay’s differentiation between the productive and sterile classes - unambiguously contested Smith’s distinction between productive and unproductive labour: any kind of labour which finds a reward produces utility and is thus productive (Garnier 1796, 39). Garnier developed his idea in “Note XX” to his translation of the Wealth of Nations (Garnier 1802, 169-201). It is incorrect, he claimed, to distinguish between those who produce material things and those who produce final services:
All work is productive... The work of either of these two classes is equally
productive of some enjoyment, commodity [commodite] or utility for the person who pays for it, or otherwise this work would not find any salary....
The enjoyment, the commodity, the utility of any consumer is the goal all work intends to achieve.(1802, 171)
Shortly afterwards, Say also interpreted production as the production of utility, utility generated not only by material objects - whether produced in the agricultural or industrial sectors - but also by “immaterial products”, that is, services. Some authors, like Charles Dunoyer (1786-1862) and Victor de Broglie (1785-1870), went beyond Say’s reluctance as regards the productivity of the State (the State remained for him an unproductive consumer). They argued that public services are a major production of utility and that the State participates in an important way in the creation of wealth.[228]
The instability of a market economy based on manufactures
Some other interesting developments refer to what has been called “commerce politique” and more generally the division of labour between agriculture and manufactures in a growing economy. One question was how to manage a smooth process of growth if the blind market forces are not to be totally trusted and the State must ensure the harmonious development of the country? Towards the end of our period, authors might differ on such or such an aspect of the measures to be taken, but overall, they agreed on four points, the first being the basic one from which the others follow: (i) for political or economic reasons, the main aim of policy is to have the greatest possible population; (ii) productivity in agriculture is fundamental in this respect; (iii) manufactures are also essential in this context because they can absorb the fraction of the population that is not needed in agriculture; (iv) foreign trade is no less essential, and forms the top of the economic pyramid: its structure must be such as to export domestic manufactured products (the more labour in their production, the better) and import agricultural products to maintain the growing population. This is the reason why the government cannot leave foreign trade totally free and must keep a close eye on it.
This approach is well stated by Ferdinando Galiani in his 1770 Dialogues sur le commerce des bleds. Foreign trade in manufactured products “increases with the number of hands” in a country, while that of agricultural products “decreases with that number” because the growing population must eat and land is limited. Because “the aim of all good government is to increase the population”, the task of economic policy is therefore “to increase the number of manufactures, which grows in proportion to the number of men and which tends, so to speak, to infinity” (Galiani 1770, 150). In this perspective, a reduction in the export of agricultural products, and even its end, must be considered positively: thanks to the trade in manufactured products, it is always possible to have a growing population, beyond the level allowed by the limited agricultural capacity of the country.One can even go beyond this limit, and force the population to such a considerable level as to be obliged to go to under-populated countries and, with manufactured products, buy the food necessary for the excess of people that should be fed. Then the art of government would have realised its masterpiece, since the masterpiece in art is to force Nature and oblige her to make a miracle such as that of having, on limited land, more human beings than her forces and her means can feed.
(Galiani 1770, 150-51)
Such a model of growth based on the development of manufactures and foreign trade was, however, liable not to work as smoothly as expected and, in the end, to suffer from serious shortcomings or instability compared to a more traditional economy solely based on agriculture. This is what Jean-Daniel Herrenschwand (1728-1812) stressed in his above-mentioned De l’economie politique moderne, published in 1786 and reprinted in 1795, and in his other texts published during the Revolution. In a nutshell, two serious problems were raised. The first problem, Herrenschwand stated, can arise when a country cannot trade enough with other countries and thus cannot maintain a growing population: the solution, in this case, is the emigration of citizens to establish a colony abroad.
If this is not possible - or if, in the long run, the entire world is in a state of full cultivation of land and cannot trade with another planet (1786, 496) - then nature will regulate the number of inhabitants through starvation and death, and “nothing could rescue it [the nation] from such a dreadful situation” (1786, 476).[229]The second problem is more serious, because it deals with harmful events which can happen at any time in the short run. In a market economy based on manufactures and foreign trade, a source of instability comes from the heart of the model: the economy is likely to behave in an unpredictable way and generate unemployment. Montesquieu, in De l’esprit des loix, had already alluded to this problem: “In commercial countries... many people have only their art.... Amidst the numerous branches of trade, it is impossible for some of them not to suffer and consequently for its labourers not to be in a momentary necessity” (Montesquieu 1748, II, 170). Herrenschwand, who lived for some time in England and saw the first important crises in the manufacturing sector, developed the theme systematically, particularly emphasising the role of foreign trade in the instability of the system - even if he also stressed the responsibility of a mistaken, interventionist, domestic economic policy. To put it shortly, unlike the ordinary demand for agriculture, the demand for manufactured products is erratic, especially if it comes from abroad, because it is highly subject to changing economic conditions in foreign countries and political events like wars. Demand for one or another kind of manufactured product can thus be ruined all of a sudden, and thousands of workers put out of work - Herrenschwand had been struck by the troubles caused by the fall in demand for English commodities due to the independence of the American colonies. And this is all the more damaging for these workers because, unlike what happens in agriculture, they cannot find food whenever they have no money left: a cultivator who cannot sell his corn can eat it, whereas a craftsman or a worker in a manufacture does not have this possibility with his products.
In the new economic system based on manufactures - “the most reckless system of political economy that humankind has imagined for its conservation” (Herrenschwand 1786, 72) - Herrenschwand claimed, “half of the nation is left, for its existence, in an entirely precarious situation, without any appropriate subsistence, without any certainty of getting it by means of its labour, eating one day and starving the next day” (1786: 72-3). As already noted, De l,economie politique moderne was used as a textbook in some Ecoles centrales - Berriat Saint-Prix (1799) approved of its developments. Its approach can be found again in certain writings of the nineteenth century where it is used to explain modern economic crises or to characterise the precarious situation of modern entrepreneurs - in the works, for example, of such different authors as Jean-Paul Alban de Villeneuve-Bargemont (1784-1850) and Alexis de Tocqueville (1805-1859).Negative aspects of the division of labour
The negative aspects of the division of labour between and within trades were also taken seriously by some authors. Smith already referred to these aspects in the Wealth of Nations ([1776] 1976, 781-8):
The man whose whole life is spent in performing a few simple operations, of which the effects too are, perhaps, always the same, or very nearly the same, has no occasion to exert his understanding, or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become.
([1776] 1976, 782)
But French authors went a step further in this criticism or advanced other aspects of it. The first author was Sieyes, who, despite having described the beneficial aspects of the division of labour, was aware of some of its shortcomings. Smith had written that “It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions... that universal opulence which extends itself to the lowest ranks of the people” ([1776] 1976, 22) and that, while compared with “the more extravagant luxury of the great”, the accommodation of “the very meanest person in a civilised country” seems extremely simple, “yet it may be true... that the accommodation of an European prince does not always so much exceed that of an industrious and frugal peasant, as the accommodation of the latter exceeds that of many an African king” ([1776] 1976, 23-4). In notes written during the late 1770s or early 1780s, Sieyes disagreed. In the modern commercial society, he claimed, the significant increase of productivity due to the division of labour does not mean an improvement in the condition of workers in terms of utility and welfare. It is not true that “our workers are in a better situation compared to an African king than a European king compared to a worker” (in Sieyes 1985, 64). The modern workers - “degenerated through excessive working hours” (1985, 73) or even “forced labour” (1985, 70) - are subject to many harmful circumstances which were unknown before and, though their consumption seems greater than before and is the result of a more complex division of labour, it does not give them more enjoyment, because they have more pressing needs: “you praise the quality of their subsistence but it is acquired with a life you would not want even for a throne” (1985, 73). For the immense increase in productivity to be synonymous with an improvement of the condition of the poorest labourers, society must evolve towards a “moral civilisation”, that is, a greater equality in the distribution of wealth.
Whatever form a worker’s consumption takes, it is always the simplest that nature provides. If he is wearing today a jacket worked, coloured, etc., by a million hands, this is not for him to be better dressed, it is not because it is more convenient, it is because this piece of work... is cheaper than the one that it replaces. The lower class of the people is neither better fed, nor better clothed, it does not live better, it makes use of advanced arts without benefiting from this perfection.... [T]he increase in needs does not add to its happiness. He [the worker] works more than in the past because the competition between workers is greater, nor does he benefit from a wage that is always reduced to a minimum.
(Sieyes 1985, 64)
The negative aspects of the division of labour, as developed by Smith, were stressed by Condorcet, especially in the five Memoires on public instruction he presented in 1791 to the Comite d’instruction publique of the Assemblee nationale and published the same year in Bibliotheque de l'homme public. As Smith noted, the fact that men subjected to the division of labour could become “as stupid and ignorant as it is possible for a human creature to become” raised important problems in the new political regime where the mass of the people could thus, through ignorance, follow any hypocritical and corrupt leader and destroy the foundations of democracy and justice. Hence the emphasis placed on the need for an efficient and ambitious system of public instruction.
A more developed criticism was expressed at the end of the period. It was made by Pierre-Edouart Lemontey (1762-1826), a lawyer and politician who, like Garnier, had to go into exile in Switzerland during the Terror. He too was worried by the danger that the negative consequences of the division of labour could have on the political regime, and, in 1801, he published an essay, “Influence morale de la division du travail, consideree sous le rapport de la conservation du gouvernement et de la stabilite des institutions sociales” which was supposed to be part of a forthcoming book on Des moyens conservateurs en politique. Three points are developed. In the first, Lemontey emphasised, like Condorcet, the potential negative political consequences of the “stupidity” of men resulting from the division of labour - their “ignorant, credulous and superstitious” sides (Lemontey 1801, 163). Government would be wrong to be satisfied with such “docile, patient and easy-to-rule” men, because they can easily be manipulated and pushed out into the streets.
The second point deals with the technological improvements linked to the division of labour and their consequences for employment. What should one do with the invention of machines, which increase productivity and reduce the demand for labour? Montesquieu had already mentioned the “pernicious” effects of technical inventions on employment and their possible negative externalities on economic activities. “The machines designed to abridge art, are not always useful”, he wrote in De l'esprit des loix. “[T]hose machines which... diminish the number of workmen, are pernicious. And if watermills were not everywhere established, I should not have believed them so useful as is pretended, because they have deprived an infinite multitude of their employment, a vast number of persons of the use of water, and a great part of the land of its fertility” (Montesquieu 1748, II, 142). Lemontey’s opinion is more balanced but in the end rather pessimistic: while, he stated, the labour liberated by the invention of machines can be employed elsewhere (some people must build the machines), the overall result would nevertheless be negative.
What is to become of the countless hands that the skill of a mechanic put out of work?... The greatest number will remain idle. In vain might one imagine that a greater mass of products, strong trade, low prices unobtainable by competitors, could create wealth, work and welfare in a nation; this theory, so plausible in theory, so full of promise, is painfully disproved by experience.
(Lemontey 1801, 166)
Finally, the third point considers the effects of the division of labour on competition. Technological progress allows the use by some manufacturers of ever cheaper production techniques, which gives them an advantage in markets in terms of price. Some competitors are eliminated, the size of the production units increases, capital concentrates and competition is reduced or fades away. The middle classes vanish and inequality in the distribution of income increases sharply.
The unavoidable consequence of the division of labour... is always to replace the great number of factories by the hugeness of some establishments. Ordinary manufacturers cannot compete with these giants that more cost-efficient processes really put beyond any competition; and the latter, requiring huge advances, can only be the property of the extremely wealthy.
(Lemontey 1801, 171)
These consequences, Lemontey admits, are only likely: “I have just depicted, not what exists, but what is possible.” However, one must be aware of the situation. “It cannot be overemphasised that, in politics, the most dangerous solvents are those which penetrate by imperceptible routes: there are deceptive prosperities and a stoutness might be a precursor to disease” (1801, 174).
The last point, stating that the unavoidable working of competition leads to monopolies, had also been critically stressed, a few years earlier, by Franςois-Noel Babeuf (1760-1797) - who changed his first name to Gracchus in 1794 as a tribute to the Gracchi, as he explained in his journal, Le tribun dupeuple. This approach, stated in particular in a letter to Charles Germain on 28 July 1795 (Babeuf [1786-97] 2020, 332-44), was part of his mature reflections on establishing an equalitarian society, the “societe des egaux”, the final stage of an evolution first based on his reading of Rousseau, Mably and Etienne Gabriel Morelly (ca1717-ca1778).[230] Competition is, for Babeuf, an aspect of “the barbaric law dictated by capital”. It degrades the knowhow of the worker, starves him and degrades his morality by obliging him to produce cheap and poor-quality products. Competition “gives victory only to the one who has the most money” and “after the struggle, only leads to a monopoly in the hands of the winner” and to the end of low prices. It produces at random, “at the risk of not finding buyers and destroying a large quantity of raw material which could have been usefully employed but which will no longer be of any use” ([1786-97] 2020, 337). Hence the project of an association based on the pooling of resources, the planning of the production and consumption of the community, and a productive environment in which technical innovation would not be synonymous with unemployment and destitution but would instead benefit all citizens.
As the leader of the Conjuration des Egaux (Conspiracy of Equals) aimed at overthrowing the Republic and replacing it with such an equalitarian and planned society, Babeuf was arrested, sentenced to death and guillotined on 27 May 1797. However, his intellectual legacy developed during the nineteenth century after the publication, by his friend Philippe Buonarroti (who escaped the death penalty), of Conspiration pour l’egalite, dite de Babeuf (Brussels: A la Librairie Roman- tique, 1828): the book was a source of inspiration and debates among socialists and communists, even if what was called “babouvisme” (Babeufism) is certainly a reductionist interpretation of his thought.