Wednesday, April 20, 2016

On Economist Jean-Baptiste Say by George Gunton 1899

On Economist Jean-Baptiste Say by George Gunton 1899

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'Jean Baptiste Say (1767-1832) really stands on the threshold of modern political economy in Europe. He is the conspicuous landmark between the physiocrats and the commodity school represented by the English economists from Adam Smith to Jevons. He was really a convert and disciple of Adam Smith, and published his first great work, "Treatise on Political Economy" twenty-seven years (1803) after the appearance of "The Wealth of Nations."

Say, however, was quite a different type of man from Adam Smith. The great Scotchman was a monument of good sense. He was an extraordinary observer but he was not a systematic, orderly thinker. He was philosophical, equal to large generalizations, but capable of disorderly presentation. This was characteristic of his great work "The Wealth of Nations," by which he will forever be known to the human race.

Say's work shows much less of the observer, but more of the logician and scientist. He struggled to separate economics from political action, and make it an abstract science. He divided his work into three parts, — production, distribution and consumption. While he did much to give order and precision to the subject, he made it more of a physical than a social science. He treated production, distribution and consumption practically as three physical bodies operating upon each other, regarding production of one class of things as necessarily demand for another class.

This error to some extent flavored English literature. It was repeated with considerable elaboration by Professor Cairnes as late as 1874. All production is really induced, not by other production, but by the social wants and desires of the people; and hence the real vitalizing force behind production, exchange and distribution of wealth is what has now come to be designated as the standard of living.

In the absence of this, and with his absolute acceptance of the Malthusian theory of population and utter repugnance to the paternal methods of mercantilism, especially as applied in France before the Revolution, Say was a bloodless advocate of laissez faire; not merely as a free trader, but as believing that government was good in proportion as it was negative and weak. To him, laborers were so much force in production, and could be considered in no other way. When there were too many, economic law did its proper work by starving a number of them out of the way. His countryman and great admirer, Blanqui, says that he even favored slavery on the ground that it was more economical to use slaves than free men; but, in a later work, "Complete Course in Political Economy," he modifies this.

However, Say's contribution to economic science was really to systematize it, separate it from politics and paternalism, and reduce it to a study of economic phenomena. In his hands, however, the science was reduced to an emaciated skeleton without flesh and blood and human sympathy and social psychology, a degree of nakedness in which it never appeared in England. But, with Adam Smith in England in 1776, and Say in France in 1803, mercantilism and the narrow agricultural physiocratic theories were essentially overthrown, never again to rise into prominence. In many senses it may be said that Say systematized Adam Smith, and, through the extensive use of the French language, popularized English economics in Europe.

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From The Encyclopaedia Britannica 1890:

Of Jean Baptiste Say (1767–1832) Ricardo says—“He Say was the first, or among the first, of Continental writers who justly appreciated and applied the principles of Smith, and has done more than all other Continental writers taken together to recommend that enlightened and beneficial system to the nations of Europe.” The Wealth of Nations in the original language was placed in Say's hands by Clavière, afterwards minister, then director of the assurance society of which Say was a clerk; and the book made a powerful impression on him. Long after, when Dupont de Nemours complained of his injustice to the physiocrats, and claimed him as, through Smith, a spiritual grandson of Quesnay and nephew of Turgot, he replied that he had learned to read in the writings of the mercantile school, had learned to think in those of Quesnay and his followers, but that it was in Smith that he had learned to seek the causes and the effects of social phenomena in the nature of things, and to arrive at this last by a scrupulous analysis. His Traité d'Economie Politique (1803) was essentially founded on Smith's work, but he aimed at arranging the materials in a more logical and instructive order. He has the French art of easy and lucid exposition, though his facility sometimes degenerates into superficiality; and hence his book became popular, both directly and through translations obtained a wide circulation, and diffused rapidly through the civilized world the doctrines of the master. Say's knowledge of common life, says Roscher, was equal to Smith's; but he falls far below him in living insight into larger political phenomena, and he carefully eschews historical and philosophical explanations. He is sometimes strangely shallow, as when he says that “the best tax is that smallest in amount.” [Ed. "Shallow"...really??] He appears not to have much claim to the position of an original thinker in political economy. Ricardo, indeed, speaks of him as having “enriched the science by several discussions, original, accurate, and profound.” What he had specially in view in using these words was what is, perhaps rather pretentiously, called Say's théorie des débouchés, with his connected disproof of the possibility of a universal glut.

The theory amounts simply to this, that buying is also selling, and that it is by producing that we are enabled to purchase the products of others. Several distinguished economists, especially Malthus and Sismondi, in consequence chiefly of a misinterpretation of the phenomena of commercial crises, maintained that there might be general over-supply or excess of all commodities above the demand. This Say rightly denied. A particular branch of production may, it must indeed be admitted, exceed the existing capabilities of the market; but, if we remember that supply is demand, that commodities are purchasing power, we cannot accept the doctrine of the possibility of a universal glut without holding that we can have too much of everything—that “all men can be so fully provided with the precise articles they desire as to afford no market for each other's superfluities.” But, whatever services he may have rendered by original ideas on those or other subjects, his great merit is certainly that of a propagandist and popularizer.

The imperial police would not permit a second edition of his work to be issued without the introduction of changes which, with noble independence, he refused to make; and that edition did not therefore appear till 1814. Three other editions were published during the life of the author—in 1817, 1819, and 1826. In 1828 Say published a second treatise, Cours complet d’Economie Politique Pratique, which contained the substance of his lectures at the Conservatoire des Arts et Métiers and at the Collège de France. Whilst in his earlier treatise he had kept within the narrow limits of strict economics, in his later work he enlarged the sphere of discussion, introducing in particular many considerations respecting the economic influence of social institutions.

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