Sapere Aude!

Enlightenment was in no way uniform and presented a great diversity of opin­ions and writings, in which the different national contexts played a role: this led to the distinction between, for example, the Milanese, Scottish and French Enlight­enments.

Enlightenment is man s emergence from his self-incurred immaturity. Imma­turity is man’s inability to use one’s own understanding without the guidance of another. This immaturity is self-incurred if its cause is not lack of under­standing, but lack of resolution and courage to use it without the guidance of another. The motto of enlightenment is therefore: Sapere aude! “Have cour­age to use your own understanding!”

(Kant [1784] 1991, 54)

As regards politics and ethics, reforms were at the centre of the debates, with an ambitious aim: “happiness for humankind”. This explains why the economic

field was not left out and even gradually became a central topic in politics, with, for some authors, an unwavering fight in favour of laissez-faire - first at the end of the seventeenth century, with Pierre Le Pesant de Boisguilbert (1646-1714), and then in the second half of the eighteenth century with the main figures of Franςois Quesnay (1694-1774), Anne-Robert-Jacques Turgot (1727-1781) and Condorcet. It provoked many lively controversies over the grain trade - one of the major debates of the time - taxes, public expenditure, foreign trade, or over money and banking from the collapse of John Law’s (1671-1729) system to Richard Cantillon (c.1680-1734) and the circle of Jacques Claude Marie Vincent de Gournay (1712-1759).^[9] The number of books and pamphlets on economic matters increased dramatically during the second half of the eighteenth century (There 1998), and the Encyclopedie also included contributions in the field from Quesnay, Turgot, Franςois Veron de Forbonnais (1722-1800), Louis de Jaucourt (1704-1779) and many others - Rousseau included, who was asked to write the entry “Economie ou fficonomie (Morale et politique)”.

In economic thought as in the other fields of science and philosophy, develop­ments were of course not homogeneous. Among the wealth of literature of the time, it is, however, possible to distinguish two main currents of thought: “commerce politique” and “philosophie economique”. Both currents aimed at a deep change in French politics. They proposed new political philosophies centred on economic policies for a prosperous economy, mainly in the context of the great economic difficulties during the reign of Louis XIV and the Regence, and then at the time of increasing rivalry with Great Britain, the Seven Years’ War (1756-63) and the loss by France of some parts of its overseas empire - with, over and over, the fun­damental and nagging questions of the grain trade, the financing of the state and management of the huge public debt.

“Commerce politique”

The first current of thought, “commerce politique”, was illustrated by such dif­ferent authors as Cantillon, Jean-Franςois Melon (1675-1738), Nicolas Dutot (1684-1741),^[10] Montesquieu and the members of the so-called circle of Vincent de Gournay - Forbonnais, Georges-Marie Butel-Dumont (1725-1788), Simon Clic­quot de Blervache (1723-1796),^[11] Louis-Joseph Plumard de Dangeul (1722-1777), and even for a time, at the beginning of his career, Turgot.

In terms of content, this current of thought was a French adaptation of the Eng­lish “science of trade” of the late seventeenth and early eighteenth centuries, whose original model, read throughout Europe and translated into several languages, was Josiah Child’s A Discourse Upon Trade (1693) - supplemented by other more political writings such as Charles Davenant’s Essays upon Peace at Home and War Abroad (1704) or The British Merchant or Commerce Preserv'd (1721) edited by Charles King, which found their most accomplished expression in David Hume’s Political Discourses (1752). Many of these writings were translated into French in the 1750s when Gournay was Intendant du commerce (see Chapter 9, this volume).

When, during these same years, Forbonnais coined the phrase “commerce poli­tique” (“political trade”) and titled one of his works Reflexions sur la necessite de comprendre l'etude du commerce et des finances dans celle de la politique (1755), he was following a path already traced by Cantillon, Dutot and especially Melon. Several French philosophers and essayists also followed this path and dealt with trade - understood as a set of activities leading to a circulation of goods, services or money - in its relation to politics. In his Letters concerning the English Nation (1733, 69),^[12] Voltaire praised the English model of trade and clearly stated its rela­tionship to politics:

As Trade enriched the Citizens in England, so it contributed to their Free­dom, and this freedom on the other Side extended their Commerce, whence arose the Grandeur of the State. Trade rais’d by insensible Degrees the naval Power, which gives the English a Superiority over the Seas.

Among French philosophers, Montesquieu was perhaps the one who most thought about the interconnection between trade and politics, to the point of distinguishing forms of trade in relation to the constitutional nature of the States. In his Reflexions sur la monarchie universelle en Europe (1734, 8), he wrote, “But today, when all the civilised peoples are, so to speak, members of a great Republic, it is wealth that makes power.” The interconnection is also present in his great work, De l'esprit des loix (1748), in which he stated the following propositions: the world became mercantile; trade is an element of politics, it follows the interests of the State; the interest of the State is possibly not to intervene too much; competition is an ele­ment of freedom and possibly a nuisance but in no way a war; and the greater or lesser freedom of trade is a decision of the prince.

For most of the authors of this current, thinking about trade as an element of pol­itics meant, from the point of view of States, considering trade as a means of estab­lishing more peaceful international relations; it meant diverting the most powerful among them from their tendency to behave like a universal monarchy, to aim at conquest rather than conservation and to regulate world affairs by military means.

“Commerce politique” aimed to base the power of the prince on the happiness of the citizens or subjects by showing that the softening of mores is preferable to the authoritarianism of the prince, despotism and the deprivation of freedom. Here again, the experience of England prevailed - a trading nation where powers were shared and its wealth was derived from agriculture and foreign trade. According to Montesquieu, the English people were the ones who best knew how to take advantage of religion, trade and freedom (1748, II, 8). But what kind of freedom was Montesquieu talking about? He glorified the English monarchy for its mixed constitution promoting civil and political liberty and a relative freedom of trade (1748, II, 12-13). Melon outlined a history of mankind whose final and modern stage is marked by the advent of trade governed by the principle of “freedom and protection” (Melon [1734] 1735, 30). Forbonnais and Gournay recommended that the French monarchy follow the English model and transform itself into a trading nation, as it was a natural process for it to become one.

Thus, it was widely stated that the general maxim of trade between nations was “freedom and protection”. The demand for freedom was nothing other than the affirmation of the principle of free competition, understood as free access to markets and the exclusion of all privileges and monopolies whenever possible. The extent of this free trade depended on circumstances: it could only have a real effect if all trading nations applied it unanimously. If this were not the case, more or less permanent restrictions would be necessary. A policy of freedom and protec­tion would thus aim to ensure a dominant position on the international market, but certainly not a monopoly position.

“Philosophie economique”

During our period of interest, the second influential current of thought was “philos­ophie economique”.^[13] It included those authors who fought in favour of the “liberte du commerce” (free trade), from Boisguilbert and the foundation of “laissez-faire” at the end of the seventeenth century to the developments of Quesnay, Turgot and Condorcet during the second half of the eighteenth century - to whom some inde­pendent authors such as Jean-Joseph-Louis Graslin (1727-1790) can be added. Why “philosophie economique”? As the physiocrats and their friends were known either as the “economistes”, the “ecrivains economistes” or the “philosophes economistes”, the current of thought they represented naturally came to be called “philosophie economique”. The phrase “philosophes economistes” was used, for example, by Diderot, and then by Mably in his 1768 Doutesproposes auxphilos- ophes economistes sur l'ordre naturel et essentiel des societes politiques - a book criticising the 1767 political opus magnum of the physiocratic school, Pierre-Paul Le Mercier de la Riviere’s (1719-1801) L'ordre naturel et essentiel des societes politiques. It was accepted by his adversaries: one of the foremost members of the school, Nicolas Baudeau (1730-1792), used “philosophie economique” in the title of his 1771 theoretical synthesis, Premiere introduction a la philosophie econom­ique, ou analyse des Etats polices. However, the appellation fits all the authors of the laissez-faire approach, from Boisguilbert to Jean-Bastiste Say (1767-1832): they all proposed a new political philosophy centred on the working of markets in competitive conditions. This approach was developed along three main lines.

The first line was a theory of knowledge based on sensationist philosophy, which originated in John Locke’s Essay Concerning Human Understanding (1690) - translated into French by Pierre Coste (1668-1747) and developed by Condillac. Boisguilbert had no contact with sensationism, but his theological point of departure led to the same conclusions as regards individuals’ behaviour and political economy. Sensationism represented an important development for the traditional discourse on the passions, and especially on interest and self-love. It allowed passions to be harmonised: as they create good or evil, pleasure or pain, they can be dealt with in terms of their positive (good) or negative (evil) outcomes at the individual and collective levels. Moreover, sensationism addressed the ques­tion of knowledge. The power of human reason, while praised, was also recognised to be imperfect and, consequently, knowledge became problematic. But while it was impossible to know the “essential” nature of things (if any), it was fortunately possible to resort to experience and experimentation and limit oneself to the knowl­edge of more or less regular phenomena and the relationships they have with each other, both in sciences such as physics and astronomy, and in the new “moral and political sciences”. In this perspective, the development of probability theory and a probabilistic vision of science marked the eighteenth century, and so did sensation- ism: this approach - stating that our sensations are at the origin of our knowledge and actions - generated the different sensationist approaches of Quesnay, Turgot, Condorcet, Graslin and many political economists of the time.

The second line of “philosophie economique” was a theory of self-interested action in society. For our authors, the natural and optimal political order rests upon the harmony that economic activities, based on the actions of selfish agents, spon­taneously create in a regime of domestic and international free trade. Boisguilbert was the first to state this position at the end of the seventeenth century. His ideas were of particular importance for the development of this approach during the eighteenth century, especially by Quesnay and Turgot: the idea of a maximising behaviour of agents based on self-interest was adopted and considered as natural. But while in Boisguilbert this attitude referred to the theological scheme of the fall of man and was embedded in his Augustinian Jansenist approach, this religious point of departure was subsequently replaced by the sensationist explanation of the behaviour of individuals, the consequences in favour of free trade remaining the same. These developments led to the progressive emergence of a new kind of rationality and cost-benefit calculations. And, contrary to the traditional moral views, the selfish attitude of agents was not considered as disruptive, provided that free competition prevails and allows a system of equilibrium relative prices to be realised. Moreover, the social link between individuals and the equilibrium struc­ture of the economy was grasped in real terms, leading, at the end of the period, to Turgot and Graslin’s respective theories of value. However, money was not unim­portant, although in this context it played a very different role to the one attributed to it in “commerce politique” - for example, the quantity of circulating money was not considered to be the cause of economic depression: the impression that an economy “lacks money” was said to be fallacious, the effect of a crisis rather than the cause.

Finally, the third line was a singular conception of the efficient action of the legislator. How can the new policy be implemented? How can the legislator be influenced if, unlike Turgot in 1774-76, the “philosophes economistes” are not themselves in power? At the time of Boisguilbert, the “philosophe” could only act by gaining access to the king or his ministers, informing them and proposing solu­tions. By the middle of the eighteenth century, this had changed with the idea of reforming the monarchy. There was a clear movement towards the public sphere and an appeal to “the court of public opinion”. Instead of papers and memoranda addressed to the royal authority, authors turned to printed works and even articles in journals intended for the public and for debate. This was a new way of thinking about politics and the legitimising of political action, seeking to convince the “read­ing and thinking public”. This pedagogical dimension was associated with various institutional structures, for example, projects for public political assemblies. In this context, what is the specific mission of the legislator as regards markets and the economy? The first task concerns the functioning of markets in a regime of free competition: in this case, the harmonisation of the self-interested behaviours of individuals was supposed to occur without any specific regulation - whether politi­cal, like the regulation of the grain trade, or religious, like the prohibition of usury. In some cases, however, authors admitted, the legislator and the political authori­ties would have to intervene whenever the conditions for the smooth working of competition were not fulfilled. In some cases also, the mechanism of competition was considered never to work and the legislator would have to intervene accord­ingly: this is the theme of market failures and the so-called artificial harmonisation of interests, the main problems dealing with the financing of public goods and taxa­tion. In addition, the legislator also had to decide on merit goods, such as instruc­tion and education, and questions related to externalities.

The two main currents of thought just depicted, “commerce politique” and “philosophie economique”, almost monopolised attention in the second half of the eighteenth century. They did not, however, obliterate some other important con­tributions to the development of political economy, such as those of the Scotsman John Law, the Neapolitan Ferdinando Galiani (1728-1787) and the Swiss banker Jacques Necker (1732-1804), who all played a prominent role in French intellec­tual and political life. Of course, all these currents and authors, while belonging to the reform movement which characterised the French Enlightenment, did not coexist peacefully, and even inside each group authors were far from agreeing on all the issues in question. Lively polemics took place between them, for exam­ple, between Forbonnais and the physiocrats. One of the most famous debates was launched by Galiani’s attack against “philosophie economique” with his Dialogues sur le commerce des bleds, which provoked a reaction from Turgot and his friends. Furthermore, many onslaughts on the laissez-faire approach came from other cor­ners, for example, from Mably or Simon-Nicolas-Henri Linguet (1736-1794), who had in mind different models of society. Finally, individual positions sometimes evolved. Diderot, for example, praised the physiocrats before supporting Galiani, and Turgot, one of the most important theoreticians of laissez-faire, was a former member of the circle of Vincent de Gournay - his 1759 “In praise of Vincent de Gournay” contributed powerfully to the erroneous image of Gournay as an adept of laissez-faire.^[14]

The evolution of the vocabulary

In this context, the evolution of the vocabulary used to designate the new field of political economy is worth noting. In a nutshell,^[15] and as is well known, “econ­omy” comes from the Greek words “oikos” (house, estate) and the radical “nem” which is found in “nomos” (rule, law). Associated in “oikonomia”, in Ancient Greece these terms meant the management sensu lato of the estate of a citizen, including his family and household, where good management complies with eth­ics and morals. While it has sometimes been translated as “economic science”, “oikonomia” is in fact best translated by “domestic administration”. The term came also to mean (good) organisation, or harmony, for example, when speaking of the economy of a poem or of a building. In Antiquity, the writings devoted to “oikono- mia” are seemingly very rare: two are well known, by Xenophon and the pseudo­Aristotle. In France, their respective titles were - and still are - usually translated by L’economique and Les economiques. But a celebrated exception is meaning­ful. When, during the sixteenth century, the lawyer and philosopher Etienne de la Boetie (1530-1563) - the author of the Discours sur la servitude volontaire - translated into French this work by the pseudo-Aristotle, he gave it the title of La mesnagerie (La Boetie 1571),^[16] a word derived from the verb “mesnager” (to manage). Significantly, his translation also included two other writings: Plutarch’s essays Les regles du mariage (Conjugal precepts) and Lettre de consolation de Plutarque a sa femme (Consolatory letter to his wife).

But the case of Les economiques is interesting for another reason: it gave rise to a first evolution in French economic vocabulary. Ancient Greek authors disagreed on whether the discourse on “oikonomia”, originally applied at the individual level, could also be applied at the collective level of the city/state. Plato answered in the affirmative, while Aristotle stressed that there was an essential difference of nature between the two levels: the head of the family has absolute authority over the members of his estate, while politics concerns free and equal citizens.^[17] Now, while this distinction is accepted by the peudo-Aristotle (who was not necessarily one single author), his book has three parts, the first and third only concerning domestic administration, while the second deals instead with public finance. To solve this discrepancy, Jacques Lefevre d’Etaples (ca 1450-1536),^[18] when publishing Latin translations of Greek writings in Paris (Lefevre d’Etaples 1506), separated Part II from the rest of the book. He gave the title of “Economicorum Duo” to Parts I and III, and “Economiarum publicarum Aristotelis liber unus” to Part II: the term “economie publique” (public economics) was born.

Later in the century, another evolution took place with the emergence of the phrase “reconomie politique” (political economy). This happened during the Wars of Religion, in a book written during the early 1590s by Louis Turquet de Mayerne (ca 1550-1618),^[19] a Huguenot proposing an alternative model for the French mon­archy: La monarchie aristodemocratique, ou le gouvernement compose et mesle des trois formes de legitimes republiques. Although it was only published in 1611, the manuscript had circulated long before in learned circles. In this work (161 1, 558), however, the phrase “reconomie politique” does not yet have the modern meaning it was to acquire later, but rather designates the political organisation of the realm: an “aristo-democratic monarchy”, that is, a form of state harmoni­ously mixing the three traditional forms usually considered as exclusive of each other - a minority view originating in Polybius’s writings. A few years after this publication, another Huguenot used “reconomie politique” in the title of a book: this was Antoine de Montchrestien (ca 1575-1621), a poet and playwright, who dedicated his Traicte de l’wconomiepolitique (1615) to the young Louis XIII and the Queen Mother Regent after the assassination of Henri IV in 1610. The meaning of “organisation” is still present but the book deals more with economic matters and problems of policy - on these topics, it was also inspired by Jean Bodin’s Les six livres de la Republique, which it plagiarises in many places.

As publications on economic questions developed, the vocabulary also evolved, although it was mainly specific to the subjects considered: grain trade, taxation and so on. In dictionaries, the word “economie” still referred to good domestic adminis­tration or to the principle of good organisation in general. To speak of the whole set of questions dealt with in economic matters, authors and commentators for a long time used “commerce” or “commerce en general”, as the titles of three celebrated books show: Cantillon’s Essai sur la nature du commerce en general, written in the late 1720s or early 1730s and only published in 1755, Forbonnais’s Elements du commerce, 1754, and Condillac’s Le commerce et le gouvernement consideres relativement l’un a l’autre, 1775. But by the time Condillac published his book, the terms “economie publique”, “economie politique”, “science de l’economie politique” or “science economique” were more appropriate to name the new disci­pline: the 1760s were decisive in this respect. In a nutshell, while in the Encyclo- pedie, the phrases “economie publique” and “economie politique” were still mainly used to deal with political questions related to the nature of the state and forms of government^[20] - although Quesnay’s entries “Fermiers” (1756) and “Grains” (1757) were labelled “Economie politique” - the physiocrats gradually introduced the new meaning of “political economy”. They spoke of “the new science of politi­cal economy” and, in Philosophie rurale (1763), Quesnay and Victor Riqueti de Mirabeau (1715-1789) used the term “science economique” (probably an abbrevia­tion of “science du gouvernement economique”, which had appeared before in their correspondence) in public for the first time in its modern sense. But this evolution was not limited to physiocratic circles. In his Essai analytique sur la richesse et sur l’impot (1767), Graslin, a fierce critic of the physiocrats, used the same words: “science de l’economie politique” and even more frequently “science economique”.

In 1755, in his discourse in praise of Montesquieu (who had just passed away), Maupertuis stressed Montesquieu’s interest in “the system of wealth” and remarked that a more appropriate name was necessary for this system, adding: “this science is so novel to us... that it does not yet have a name” (Maupertuis [1755] 1768, 416). A decade later, most political economists had the impression that they had definitely founded a new discipline - in 1767, Graslin declared that the science of political economy had just been born and, in 1768, Pierre-Samuel Dupont (1739­1817),^[21] a disciple of Quesnay, published De l’origine et desprogres d’une science nouvelle. They also felt that they had found some more appropriate names for it, most of the time used as equivalents. But because the physiocrats were known as the “economistes”, Graslin felt it necessary to warn that the new “science econom- ique” should not be reduced to physiocracy: it referred to a new field of inquiry and not to a specific doctrine. Use of the term “anti-economiste” to speak of authors who opposed Quesnay and his disciples was thus to be banned. “I tell you that anti-Economiste is not the correct word, and one should say anti-Queneiste, anti- Miraboliste, for one can oppose particular opinions on economic science without becoming an enemy of this science” (Graslin [1767-68] 1777: 29-30).

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