Setting the stage
From a global economic viewpoint, the nineteenth century was undoubtedly a period of great transformations, which provided fertile ground for the development of political economy.
The industrial revolution, characterised by a profound change in production structures and the organisation of labour, started in the 1830s in France, gradually transforming pre-industrial activities into modern industries, with steady economic growth (Verley 1985). Industrial production, mainly of consumer goods, grew significantly, fuelled by the development of railways from the end of the 1820s, by the modernisation and extension of the banking system from the middle of the century, and by the support of public financing. Economists naturally witnessed these phenomena, which they sought to understand and explain. They believed that progressive liberalisation of the economy would allow the industrial and financial apparatus to gain in efficiency and tear France away from a state of backwardness. Like the Saint-Simonians and the socialists, liberal economists shared a hope for economic and moral progress, but they analysed the consequences of the industrial revolution differently. They were aware of the sad phenomenon of pauperism, and they had read the results of the inquiries of Louis Rene Villerme (1782-1863) in his Tableau de l’etatphysique et moral des ouvri- ers employes dans les manufactures de coton, de laine et de soie (1840). However, they still believed that economic freedom would end in increased welfare for all - pauperism being ascribed by most of them to a problem of individual moral behaviour of the lower classes and of some greedy entrepreneurs.Two turning points marked the history of economic thought of the nineteenth century: the first occurred in 1848, and the second in the early 1870s. The pre- 1848 situation can be analysed as a period of progressive consolidation of liberal political economy.
Before 1848, the relations of liberal economists to political power had fluctuated. During the First Empire and the Restoration, they clearly belonged to the opposition and censorship was a constant threat - as it was for Jean-Baptiste Say (1767-1832) in his time.1 Political economy was viewed as subversive and had no place either at the Institut de France (until Guizot re-established the Classe des Sciences Morales et Politiques in 1832) or in French universities (until 1864). However, these relations slowly improved after the July Revolution: the new regime facilitated the expansion of liberal ideas and the institutionalisation of political economy. Say’s heirs increasingly entered the political arena, by acquiring positions as ministers, prefects, ambassadors, or by being elected to parliament. This entry into the political realm went hand in hand with the beginnings of the institutionalisation of political economy, initiated by Say’s followers; in the 1840s, the liberals, grouped within the Societe d’economie politique (see below), formed an opposition to the protectionist temptations of Adolphe Thiers (1797-1877) for example, and to the colonialist arguments of Alexis de Tocqueville (1805-1859) (Leter 2006). Apart from Pellegrino Rossi (1787-1848) and a few others, they also denounced the conservatism of Franςois Guizot (1787-1874). The intellectual activities of the socialists and the Saint-Simonians were very intense in the pre- 1848 period (see Part II of this volume); the liberals denied any relevance to their ideas but still did not measure the threat they would cause a few years later, either intellectually or politically. They even showed a certain openness to Pierre-Joseph Proudhon (1809-1865), with whom some had friendly relations, and several of whose works were published by Gilbert-Urbain Guillaumin (1801-1864), the liberals’ favourite publisher. [3]In this period, classical ideas spread in France, mainly coming from Great Britain, thanks to the numerous translations of classical works published since the end of the eighteenth century.
Adam Smith’s ideas had circulated easily in French-speaking areas since some early translations during the last decades of the eighteenth century (see Vol. I, Chapter 9; Faccarello and Steiner 2002). Henry Thornton’s 1802 Enquiry into the Nature and Effects of the Paper Credit of Great Britain had been translated in 1803. Malthus’ ideas on population also began to be disseminated in France from 1805 onwards and his 1820 Principles of political economy, considered with a view to their practical application was published in French the same year of its publication in Great Britain (Faccarello 2020). Last but not least, David Ricardo’s works also were available in French from the 1810s onwards: The High Price of Bullion was translated in 1810 and the Principles of Political Economy and Taxation in 1819 (Beraud and Faccarello 2014). In a nutshell, although the translations were sometimes questionable, classical British economic thought circulated with some ease in France, and Smith’s ideas, especially, influenced French readers.[4] The liberal political economy that developed in France at that time was thus in dialogue with the English school, without, however, being subjugated by it.The 1848 Revolution brought a break in this period of affirmation of liberal thought, with two consequences. First, the outburst of violence during the revolution and the radicalisation of the movement left lasting marks (Demier 2001): the socialist threat was now taken seriously, and there was no longer any question of treating with benevolence or patronising the writings of the socialists that had flourished in the preceding years.[5] After 1848, a radicalisation of liberal thinking could be observed: private property had to be defended, and it had to be proved just and efficient. Liberal economists protested against the authoritarian organisation of labour and Louis Blanc’s “droit au travail” (right to have a job): they vehemently opposed the implementation of National Workshops and responded with a plea for the freedom of labour.
Along with this theoretical fight against interventionist ideas, a political softening of their relations to political power occurred. After an initial period of mistrust and surveillance in the early years of the Second Empire, the regime took a liberal turn in 1860, which obviously benefited the economists of the liberal group. The movement was twofold: the Empire took a step towards liberalism, and in return, some eminent liberals supported the regime (Le Van- Lemesle 2004; Schwartz 2022). They thus accompanied the free-trade turn of the French economy and one of them, the former Saint-Simonian Michel Chevalier (1806-1879), was an architect of the effective trade opening by participating with Richard Cobden in the preparation of the Anglo-French free trade agreement (23 January 1860). After 1848, French liberal economists also significantly increased their presence in Parliament (Breton 2005), as was also occurring elsewhere in Europe during the same period.After the fall of the Empire in 1870, the first years of the 1870s marked another turn at several levels, for reasons that are both general and specifically French. France’s defeat by Prussia in 1871 came as an unprecedented shock. It was interpreted as France’s failure to develop skilled political and administrative elites, calling for a deep change in education, in particular regarding political economy. The reforms that followed were mainly detrimental to the liberals: many of them did not find a place in the new organisation of university teaching of political economy (see Chapter 7 of this volume).[6] The “long stagnation” (Breton et al. 1997) that occurred between 1873 and 1893 also called for a theoretical renewal, as both the analyses and the remedies considered by the liberals - especially Charles Coquelin’s (1802-1852) and Clement Juglar’s (1819-1905) “optimistic” analysis of cycles based on self-regulation - seemed to have failed. Finally, French Liberals were also experiencing a more general trend, which was occurring all over Europe: from the 1870s onwards, classical ideas were challenged by the new theories of historicism and marginalism. During the Third Republic, they lost ground under the growing influence of interventionists, nationalists and protectionists.
2.