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Book Review: J.B. Say

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J.B. Say: An Economist in Troubled Times
writings translated and selected by R.R. Palmer (Princeton, N.J.: Princeton University Press, 1997); 164 pages; $39.95.

Whatever economic freedom we enjoy in the world today is due, to a great extent, to the ideas and efforts of the classical liberals and economists of the first half of the 19th century. Inspired by the 18th-century writings of the French physiocrats and Scottish moral philosophers (David Hume and Adam Smith), they forcefully and insightfully demonstrated the errors and inefficiencies in mercantilism (the 18th-century system of government planning and regulation).

In place of mercantilism, they advocated Adam Smith’s “system of natural liberty,” under which government would be limited, mostly, to the protection of life, liberty, and property. Free men pursuing their individual self-interests would peacefully exchange and, as if guided by an “invisible hand,” the cumulative result of their transactions would generate a greater “wealth of nations” than when governments consciously attempted to plan the economic activities of their citizens and subjects.

One of the most original and influential of these early 19th-century classical liberals was the French economist Jean-Baptiste Say. Born in 1767, Say published the first edition of his famous Treatise on Political Economy in 1803. The book was disliked by Napoleon, who prevented it from staying in print. But soon after Napoleon’s fall from power, the treatise reappeared and went through several editions (including an American one) before Say’s death in 1832.

But most of Say’s political and economic writings have not been available in English. Noted historian R.R. Palmer has recently translated and edited selections from these works under the title J.-B. Say: An Economist in Troubled Times. The translations are interwoven by Palmer into a text of summaries of and commentaries about Say’s life, times, and contributions.

Say was not very politically active during the revolutionary and Napoleonic periods in France. But he did advocate a simple, unencumbered constitutional order for France, in which laws would be few in number and mostly limited to the protection, and not the violation, of individual rights. Unfortunately, like many of the classical liberals of his time, there were inconsistencies and contradictions in some of Say’s views about the role of government in society. For example, he didn’t want state domination and manipulation of education, but he supported limited state subsidies for schooling and for what today would be called “trade techs.” Also, while suspicious in general of imperialism and foreign military adventures, Say praised the French occupation of Egypt in the 1790s.

But the main focus of his writings was to emphasize the importance of sound economic principles for understanding why the market should be freed from government control. He strongly believed that freeing the market was the best avenue for reducing poverty, eliminating the artificial inequalities in income created by state regulation, and bringing about a much better world for all through increased productivity and competition. As Say expressed it in a lecture at the College of France in Paris in 1832:

“In general, it results from the study of political economy that it is best in most cases for men to be left to themselves because it is thus that they reach a development of their faculties. Only political economy makes known the true ties that bind men in society [the benefits from free exchange]. It sets property on its true foundations, and shows its relation to personal abilities new inventions…. Instead of founding public prosperity on brute force, political economy founds it on the well-understood [peaceful] interests of human beings.”

As an economic theorist, Say’s contributions included his emphasis on the role of “utility” as the foundation for explaining the value that goods have in the market. In this, he was anticipating some of the arguments of the later Austrian school of economics. He was also suspicious of an excessive use of mathematics in economics along lines similar to the Austrian economists. Say was the first economist to carefully analyze the role of the “entrepreneur” as the crucial decision-maker who directs the production activities of private enterprises in the service of satisfying consumer demand.

He also formalized the “law of markets,” now well known as “Say’s Law”: To consume, men must first produce. In the market arena of exchange, the way people can demand what others may have for sale is to offer in exchange goods that those others may be willing, in turn, to buy.

Say was extremely critical of proposals being offered for government make-work projects and government-imposed full-employment schemes for the private sector.

In the years just before his death, Say also criticized a new, emerging idea: socialism. Nations, he said, were not made prosperous by those who politically governed society; instead, society was made prosperous by leaving people free to pursue their own thoughts and actions.

Say greatly appreciated America as a beacon for freedom, and he even contemplated immigrating to the United States during the tyrannical reign of Napoleon. For example, he wrote to Thomas Jefferson in 1803:

“You will show us the true means to our liberation…. It is for you [the Americans] to show the friends of liberty in Europe how personal freedom is compatible with maintenance of the social body.”

Its unfortunate that if Say were alive today, he could not be as praising of America as an example for the world as he could be 195 years ago.

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    Richard M. Ebeling is a professor of economics at Northwood University. He was formerly president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).