Property rights and economic freedom

Despite their different profiles, the French Liberals were united by a common legacy and by their adhesion to certain inalienable principles: private property, individual freedom and equality before the law.

Natural rights and utilitarianism

Not surprisingly, the attachment to private property, and the many virtues attributed to it, was a pillar of liberal economic thought. The expansion of the liberal group in the 1840s went hand in hand with a renewed interest in property issues, in a context of expanding socialist ideas. Before 1848, the liberal view on socialist theories was critical but quite benevolent: these theories were considered as unrealistic, based on false principles, but developed with a view to the welfare of the people. As Coquelin states:

it is to the credit of the principal leaders of the socialist doctrines that they really aspire to good.

(Coquelin 1848, 5-6)

Until 1848, liberal authors did not perceive an immediate political threat, espe­cially to private property. Charles Comte’s Traite de lapropriete (1834) aimed to “reveal the nature of the various kinds of property, but also to explain their con­stitution... [and to] recall a large number of truths which belong to the science of political economy” (Comte 1834, vol. 1, XXIV), but most liberals were not interested in the question of property as a priority. The year 1848^[29] marked a break: they realised that socialist ideas could become a political danger and lead to major social unrest; they feared the shift from utopia to revolution. Consequently, their publications multiplied, in both periodicals and books, in anticipation of a looming danger. Adolphe Thiers’^[30] De la propriete (1848) was a response to the writings of Louis Blanc (1811-1882), Etienne Cabet (1788-1856) and, to a lesser extent, Pierre-Joseph Proudhon (1809-1865). Faced with a serious political threat, it was therefore urgent to address this concern head on. So began Thiers’ foreword:

Since French society has come to this point of moral disturbance, such that the most natural, the most obvious, the most universally recognised ideas are being doubted, boldly denied, let us be allowed to demonstrate them as if they needed it. This is a tedious and difficult task, for there is nothing more tedious... than to try to demonstrate what is obvious.

(Thiers 1848, 1)

After 1848, a twofold theoretical necessity crystallised: that of giving private property solid foundations and justifications, first to counter the perception of a growing socialist threat during the Second Republic (February 1848 to Decem­ber 1852), and then to reinforce it in the presence of growing interventionism dur­ing the Second Empire (December 1852 to September 1870).

Justifications of property rights

Charles Comte, Gustave de Molinari, Charles Dunoyer, Frederic Bastiat, Adolphe Thiers, Louis Wolowski and the publicist Henri Dameth^[31] (1812-1884) were the front line in the defence of natural law against socialism and utilitarianism.^[32] They traced the source of property back to a specific relation between labour and nature. Only human labour can make the land productive; therefore, the first appropria­tion of land was naturally acquired, as was its transmission through generations: it could not be taken away by prescription, which guaranteed the harmonious and peaceful development of societies. Any other mode of appropriation would amount to what Bastiat called “spoliation legale” (legal plundering). These authors thus attacked the consequences of utilitarianism for the definition of property rights. If one accepts that property rights be assigned according to the principle of util­ity, they would in fact be cut off from the nature/labour connection.

Some prominent liberal economists, however, did not hesitate to take the path of utilitarianism, challenging the foundations of natural law: among them, the names of Jean-Baptiste Say, Pellegrino Rossi, Jean-Gustave Courcelle-Seneuil, Antoine- Elisee Cherbuliez, and, in a slightly different way, Jules Dupuit stand out. They strongly criticised the myth of Robinson Crusoe and the first cultivation of land. In addition, the theory based on natural law was said to suffer from a logical incon­sistency. From the perspective of this theory, we can only own what we produce entirely by ourselves. However, apart from very special cases, all production is in reality a joint production between an individual and his environment. In contrast to the advocates of natural law, this second group of authors considered that the definition of property rights according to the criterion of public utility is the most liable to ensure efficiency and equity: “the appropriation of land is no different from all manifestations of human freedom that affect the social order. The indi­vidual fact must be contained by government within the limits of law and reason” (Rossi 1840-41, vol. 2, 10). This view was later reaffirmed by Jules Dupuit, who made public utility the guiding principle of his political economy (see Chapter 5), as stated in his famous sentence: “Public utility is the principle, the basis, the foun­dation, not only of property, but of taxation, of all laws, because the society which makes them can only rule in the general interest” (Dupuit 1861a, 47).

These general debates on a philosophical level were transposed to a number of concrete issues, depending on topical discussions: how to define, for example, the property rights to a literary work? What limits should be placed on the duration of patents? Should it be possible to expropriate, and according to what criteria? Should forest ownership be regulated in a particular way? What rules should apply to inheritance? Lastly, thoughts on property rights also raised the question of the intervention of the State as legislator: property then became an object of political economy as well as law. To illustrate these points, let us briefly focus on two of the controversies, regarding intellectual property and inheritance, respectively.

Intellectual property and inheritance

The question of property rights was first of all discussed, particularly from the end of the 1850s, in the context of a topical issue: intellectual property. In 1858, a congress on literary property was organised in Brussels, bringing together authori­tative figures from various backgrounds (writers, publishers, booksellers and econ­omists). The discussions revealed a surprising fact: among the liberals, those who were otherwise fervent defenders of private property were rather hostile to the protection of immaterial property, particularly literary property - the question of whether immaterial property should be recognised according to the same principle as material property was heavily discussed (Vatin 2002, Sagot-Duvauroux 2002). Bastiat and Molinari adopted a strict extension of the theory of natural law in this matter: they defended what was called “monautopoly” (monautopole),^[33] defined as the absolute, exclusive and perpetual ownership by the inventor of his invention, generating a monopoly rent. In a way, this was the same rationale for them as the right of the first occupant a la Robinson Crusoe. Only such an absolute protec­tion of the inventor’s property rights would be likely to stimulate innovation and reward the creator at his true value.

The other significant debate was about inheritance (Silvant 2015). The French Civil Code of 1804 had introduced an egalitarian division among the heirs where other countries had retained primogeniture or liberty to bequest. The topic of inheritance emerged quite naturally in the debates in the 1840s, under the com­bined effect of socialist and Saint-Simonian attacks on inheritance and the above­mentioned renewed interest in property rights. This controversy shows again the tensions that arose when liberal principles, especially the principle of natural jus­tice, were put into practice: the liberals were torn between supporters of total free­dom to bequest and supporters of its regulation by government. A vast majority of liberal economists were on the side of testamentary freedom (Bastiat, Baudrillart, Courcelle-Seneuil, Dunoyer, Garnier, Molinari), which was seen as a necessary extension of the (natural) property right, a feature without which this right would not be complete. They attributed economic as well as social and moral virtues to it: guaranteeing that everyone can freely dispose of his or her wealth stimulates accu­mulation and saving, brings families closer together and makes individuals more responsible (Steiner 2008). In this respect, both the French equalitarian system and British primogeniture were to be criticised. Moreover, this would have ensured, through the supposed rationality of individuals, that wealth would be distributed according to the capacities of the heirs; it does not matter that the inheritance is shared unequally among the children if the best endowed are the most talented. A clear advantage of this system would have been the concentration of large indus­trial fortunes, on the model of the English dynasties that played their part in the economic and commercial power of that country.

Rossi, followed by Dupuit and Wolowski, made a quite different analysis of this question. In their view, it is necessary to restrict the absolute freedom to choose one’s heirs for several reasons. It is not ethically right, they argued, to deprive a child of his or her right to a share of the family fortune: after all, each generation adds only a marginal amount to the intergenerational formation of wealth. It would also be a mistake to trust the supposedly rational judgement of fathers: the distri­bution of the inheritance may be inefficient. Finally, another argument referred to a possible perverse effect of the freedom to bequest: if a father has the right to disinherit one or more of his children, he could make them a burden on society, and the freedom to bequest would then be costly at the collective level. Thus, society should “regulate property and inheritance in such a way that the sum of the benefits to everyone is as great as possible” (Dupuit 1861a, 339).

Economic freedom and its enemies

The second tenet of liberal thought is economic freedom: “freedom has many forms, it has many degrees, but considered at its core, it rests on that unique and wonderful fact, free will” (Baudrillart 1857, 14).^1s The commitment to economic

18 Political freedom was also concerned. For our economists, the defence of political and economic freedom called for many other freedoms: the free expression of opinions, individual freedom of conscience, the self-determination of peoples against colonialism. On the issue of colonialism as seen by liberals, see Charbit (1991); see also Etner and Silvant (2017). freedom was so strong that in the April 1862 discussion of the Societe d’economie politique, reported in the Journal des economistes, Garnier even used the word “dogma” to refer to its most important forms: freedom of work (liberte du travail) and freedom of trade (liberte des transactions).

Free trade

Free trade was the first intangible part of economic freedom. At least until the 1860s, the ideas of French liberal economists were quite homogeneous on this issue. They took up the doctrine of laissezfaire, laissezpasser: “they do not claim that everything should be left alone and that everything should be allowed to pass, but simply that work should be allowed to be done and the fruits of labour to be exchanged without hindrance and without preventive measures” (Garnier, in Coquelin and Guillaumin 1852-53, vol. 2, 19).

Their arguments in favour of free trade were inherited from Turgot, Smith, Destutt de Tracy and especially Say, but the name of Ricardo is missing; no refer­ence was made to the principle of comparative advantage. Their argument was structured in two stages. Firstly, modern societies are based on a natural division of labour, which produces specialisation. Secondly, the law of the market pre­vails at both the international and national levels. Thus, even at the international level, products are simply exchanged for other products according to the respec­tive endowments of national economies in natural wealth, labour or capital. As for domestic trade, the main benefit expected from trade opening was thought to be lower prices through the division of labour and access to more competitive mar­kets, which benefit consumers; conversely, prohibitions and customs duties tend to favour non-competitive industries and slow down both the enrichment of the nation and progress. International trade in this respect is no different from trade in general. As Molinari wrote, in the entry “Liberte du commerce” in the Dictionnaire de l’economiepolitique:

a statesman who establishes a protective or prohibitive duty acts precisely in the opposite way to an inventor who discovers a new process to make pro­duction more cost-effective and more perfect: he invents a process to make production more expensive and less valuable.... He is the opposite of an inventor, an agent of barbarism, as the inventor is an agent of civilisation.

(Molinari in Coquelin and Guillaumin 1852-53, vol. 2, 53)

Some economists, however, took particular positions on this issue. Dupuit, at one end of the spectrum, was roundly criticised for the brutality of his reasoning, when in his book La liberte commerciale (1861b) he defended a seamless transition to total free trade, even if it meant that whole sectors of the French economy might go bankrupt. Other liberals called instead for a smooth transition that would avoid any popular uprising. To Dupuit, the disruption of moving from a protectionist system to free trade should not be overestimated. He argued that “freedom of trade, for the hundreds of people whose wealth it momentarily diminishes, counts in the

thousands those whose welfare it permanently increases” (Dupuit 1861b, 121). Those who wish to protect manufacturers by granting them transitional measures forget that as they are

onerous to society as a whole, they constitute a kind of gratuitous indemnity granted to certain individuals at the expense of the rest of the population; that many inventions, new discoveries, improvements in the conditions of pro­duction, bring about similar disturbances, without the State feeling obliged to intervene to alleviate them.

(Dupuit 1861b, 122)

At the other end of the spectrum, criticism of absolute free trade had already had some support from Cournot, Du Mesnil-Marigny or Dupin, but the protectionist doctrine developed later, mainly from the 1880s onwards, under the influence of Paul Cauwes (1843-1917)^[34] in particular, in the context of the decay of a liberal economic thought more inclined to militancy than to argumentation (Ravix 1991).

Within the group, we can point to two figures whose role was particularly important for international trade: Frederic Bastiat and Michel Chevalier, who both switched from ideas to activism. Bastiat was a tireless promoter of free trade, espe­cially in his later years. He succeeded in federating all the great names of French liberalism (Rossi, Dunoyer, Garnier, Wolowski, Chevalier, inter alia) in his Asso­ciation for Free Trade, and even received a visit from Richard Cobden, in support of his programme. But an opposition to Bastiat’s movement was organised: claim­ing to defend the cause of French workers, the manufacturer Auguste Mimerel (1789-1871) created in 1846 a committee for the defence of national labour. But it was above all the 1848 Revolution that defeated the free trade movement. The climate changed again in the 1850s and, as an advisor to Napoleon III, Chevalier actively lobbied for a trade agreement with England. After several years of negotia­tions with Richard Cobden, the treaty was concluded in January 1860, for a period of ten years; it established a regime of moderate (and decreasing) customs duties, far from the absolute free trade that economists were calling for. It paved the way for other trade treaties to follow. But apart from a short period of free trade after 1860, the liberals failed to win the battle of ideas, and a protectionist turnaround started in the early 1880s.

Freedom of work

The second pillar of liberal thought was the freedom of work, which was empha­sised in opposition to the “right to work” (droit au travail - the right to a job) rheto­ric promoted by socialist authors.^[35] This issue was dramatically put on the agenda during the 1840s: Louis Blanc had just published Organisation du travail in 1839, in which he defended the idea of a right to work (“droit au travail”) and a right to assistance, rights that the socialists would seek to have adopted by the Constituent Assembly in 1848 (Bouchet 2006). In a context of urgency caused by the deterio­ration of material living conditions (Potier 2022), the right to work was intended to ensure that workers had the right to live through their work. Its implementation took place with the creation of the Ateliers nationaux, which were intended to pro­vide jobs (particularly in public works) for the unemployed. The workshops were overwhelmed and the experience was a failure (Coste 2018).

With the crisis of 1848 and the worsening of poverty, the socialists aspired to bring together the question of the right to work and the social question (Bouchet 2006). Two books are significant in this respect: the above-mentioned La liberte du travail (1845) by Charles Dunoyer, and Le droit au travail a l'Assemblee natio­nale, a booklet edited by Joseph Garnier in 1848.^[36] It was urgent for the liberals to reaffirm the superiority of the freedom of labour, which was seen as the opposite principle to the right to work: “the right to work, that fundamental principle of the socialist bible, is not the faculty which belongs to every man, in a free State, to make use of his own industry. The right to work has nothing in common with free­dom of work” (Faucher, in Coquelin and Guillaumin 1852-53, I, 605).

To the liberals, the right to work is the negation of property rights and has noth­ing to do with the right to engage in work (“droit de travailler”) either, as Faucher stressed: “the right to engage in work is nothing other than the freedom which belongs to each individual to make of his intelligence, of his arms, of his time, the use which he judges most advantageous; whereas the right to work... is an action which is given to the individual against society” (Faucher, in Coquelin and Guillaumin 1852-53, I, 612). The most dangerous aspect of the right to work is that it makes the State the caretaker of all lives, thereby diluting individual responsibil­ity and undermining the grounds for economic incentive.

The liberals advocated freedom of work, echoing the end of the administrative regulation of labour, provisionally achieved in 1776 with the abolition of corpo­rations and masterships (“jurandes et maitrises”) by Turgot. Freedom of work is inseparable from the notion of competition and was understood as the freedom to exercise the profession of one’s choice, to associate,^[37] and to appropriate the fruits of one’s labour. Even for the liberals who were the least hostile to public inter­vention, poverty and massive unemployment could not be solved by a generous social policy of giving employment and/or wages to everyone. To them, the social question has only two possible outcomes: either, at the individual scale, individual self-regulation or “self-government” (when the poor pay the consequences of their “immoral” behaviour, for Dunoyer (1845)), or, at a global scale, a reorganisation of the labour market through bourses de travail (labour exchanges) (Molinari, see Chapter 7) or an overall increase in production (for Wolowski or Chevalier) could improve the material conditions of the poorest.^[38]

3.