Foundations of 'Laissez-Faire': The Economics of Pierre de Boisguilbert (Routledge Studies in the History of Economics, 31)

The Foundations of Laissez-faire

At the end of the seventeenth century a new theoretical approach in economics emerged through the writings of Pierre de Boisguilbert (1646–1714). Boisguilbert’s work, a landmark in the establishment and development of liberal economics, not only develops the theoretical foundations of laissez-faire, it also constitutes a substantial analysis of the behaviour of economic agents in the generation of prosperity and depression. This is the first full-length study of Boisguilbert’s work to appear in English since 1935. It contains an extended discussion of the context in which Boisguilbert worked, as well as a detailed analysis of his life and work. Gilbert Faccarello is Professor at the École Normale Supérieure de Fontenay/Saint-Cloud (France). He has published extensively on the history of economic thought with special reference to classical and Marxian economics and to seventeenth- and eighteenth-century French Political Economy. He has published several books in French including Travail, Valeur et Prix: une critique de la théorie de la valeur and Aux origines de l’économie politique libérale: Pierre de Boisguilbert. He also edited Studies in the History of French Political Economy (Routledge, 1998). He is co-founder and co-managing editor of The European Journal of the History of Economic Thought.

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The Foundations of Laissez-faire The economics of Pierre de Boisguilbert Gilbert Faccarello

The Foundations of Laissez-faire The economics of Pierre de Boisguilbert Gilbert Faccarello

London and New York

First published 1999 by Routledge 11 New Fetter Lane, London EC4P 4EE Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2001. © 1999 Gilbert Faccarello © 1986 Éditions Anthropos Aux origines de l’économie politique libérale: Pierre de Boisguilbert Published by Éditions Anthropos, Paris Translated from the French by Carolyn Shread All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Faccarello, Gilbert. [Aux origines de l’économie politique libérale. English] The foundations of laissez-faire: the economics of Pierre de Boisguilbert/Gilbert Faccarello. p. cm. Includes bibliographical references and index. 1. Economics—France—History—17th century. 2. France—Economic conditions. 3. Boisguilbert, P. Le Pesant de (Pierre Le pesant), 1646–1714. I. Title. HB105.A2F3313 1999 330. 15' 3—dc21 ISBN 0-415-20799-1 (Print Edition) ISBN 0-203-00563-5 Master e-book ISBN ISBN 0-203-17230-2 (Glassbook Format)

Contents

Foreword Introduction: A fin de règne Alceste 1 The context (I). Social and political Augustinianism

viii 1 13

2 The context (II). On some problems in the governing of an ordered state

34

3 Equilibrium (I). The social classes approach: from the ‘state of innocence’ to the ‘polished and magnificent state’

58

4 Equilibrium (II). The market approach: the foundations of equilibrium and of free trade 5 Destabilising shocks (I). Court language and merchant truth

73 103

6 Destabilising shocks (II). Market strategies: the propagation of disequilibrium Conclusion

122 142

Appendix

143

Notes Bibliography Index

165 185 195

Foreword

The present book is a translation of a revised version of Aux origines de l’économie politique libérale: Pierre de Boisguilbert (Paris: Anthropos, 1986). I am grateful to Jérôme de Boyer, Antoin Murphy and Philippe Steiner: this new version benefited especially from their comments. I should also like to thank Carolyn Shread for her patience and commitment in translating this book. Throughout the book some social and institutional features specific to the French Ancien Régime may be puzzling: for obvious reasons, the explanations of these features have been omitted here. Some excellent references to the literature on these features are indicated in the Bibliography. The reader may care to refer to the writings of Duby and Wallon (1975), Goubert and Roche (1991), Mandrou (1974) and Marion (1923) for an overall picture, and to Dessert (1985) and Bayard (1988) for a discussion of the financial sector. However, a detailed knowledge of this period, while it is useful, is not required to understand the arguments presented in the following chapters. G.F.

Introduction A fin de règne Alceste

I

Eventually [Vauban] . . . began to work on a new system. He was well advanced in it when several small books were published by sieur de Boisguilbert, lieutenant general in the seat of Rouen, a man with a great penchant for details and for work . . . who, long beforehand, had touched on the same perspectives as Vauban, and had also been working on them for a long time. He had made progress in them before the Chancellor [Pontchartrain] left the ministry of finance. He came expressly to see him and, since his lively mind was also quite singular, he asked him to listen to him patiently, stating immediately that at first he would take him for a fool, then he would see that he deserved his attention, and that eventually, he would be satisfied with his system. Discouraged by the innumerable advice givers who had all come before him . . . Pontchartrain began to laugh, replied that he would go no further than the first, and turned his back on him. On his return to Rouen, Boisguilbert was in no way disheartened by the lack of success of his journey; he only worked all the more indefatigably on his project. . . . From this labour, a knowledgeable and profound book on this subject was born.

This page taken from the Mémoires of Saint-Simon (volume V, pp. 347–8) is interesting in that, despite the slight confusion between Vauban and Boisguilbert’s ideas, it presents an extremely lively and evocative portrait of Boisguilbert’s character. While he was a stubborn, blunt and irritating figure for some, others found him to be sincere and lucid; he was typical of the obstinate ‘advice givers’ which economic difficulties always encourage to throng around the throne. Pontchartrain’s offhand manner is understandable given such a awkwardly formulated request for an audience. No doubt the lieutenant general was yet another ‘visionary’ promising the earth, like all the others. One has only to consider the titles of two of his principal works to confirm this. The first book: Le Détail de la France: la cause de la diminution de ses biens, et la facilité du remède, en fournissant en un mois tout l’argent dont le Roi a besoin, et enrichissant tout le monde (The Detailing of France:

2

Introduction

the cause of the decrease of its wealth, and the ease of its remedy, providing in a single month all the money the King needs, and enriching everyone). And one of his last works: Factum de la France, ou Moyens très facile de faire recevoir au Roi quatre vingts millions par-dessus la capitation, praticables par deux heures de travail de Messieurs les ministres, et un mois d’exécution de la part des peuples, sans congédier aucun fermier général ni particulier . . . et l’on montre en même temps l’impossibilité de sortir autrement de la conjoncture présente (Factum of France, or a very easy means of obtaining for the King eighty million over and above the capitation, to be achieved in two hours work for Messieurs les ministres and one month’s application by the people, without dismissing any farmer general or individual . . . and the impossibility of escaping from the present conjuncture by any other means is demonstrated simultaneously). In spite of these titles it is ironic to see Boisguilbert protesting vehemently against the very idea of confusing him with the ‘system makers’ and other advice givers. ‘All these sorts of visionaries must not be allowed to come before you to importune you with their hollow reveries’, he advised Chamillart, the Controller General of Finances (27 October 1703, p. 294). To try to distinguish himself from these others (but is not his discourse the same as theirs?), Boisguilbert insisted particularly on two points which we shall have occasion to discuss: the first is that, far from being an intellectual perspective or pure speculation, on the contrary, his system arises from lengthy experience and constant contact with practical concerns; the second is that his proposals are not intended to ‘overturn the state’, rather, they refer to rules observed in the past during the supposedly golden ages of the French monarchy; consequently, they require no truly novel legislation. Obstinacy pays off in the end. Constantly bombarded with letters, memoirs and writings of all lengths, the different Controllers General1 eventually listened and began to take this permanently irksome individual seriously. No doubt the seriousness of the situation and the exhaustion of all known remedies had a part to play in this. The critical information provided by individuals such as the marquis de Beuvron2 (the ‘lieutenant general of this bailiwick . . . is considered by all those who know him as the most extravagant and incompatible man in the world, in addition to his many other faults which I shall not mention’) was eventually countered by that of Vaubourg3 or Vauban. ‘I am very aware,’ Vauban wrote to Chamillart,4 ‘that his mind is somewhat over-stimulated; but this does not mean that he is not capable of offering some good advice.’ However, the peripeties and succession of failed interviews with the officials of the kingdom (see J. Hecht, 1966a) led Boisguilbert to publish his works in secret, which was easy for him to do in as much as he was in charge of surveillance of the publishing industry in Rouen. However, this upset the regime several times, causing Boisguilbert to go into exile briefly, and thereby affording him a certain popularity.

Introduction 3 II Boisguilbert’s style certainly put off more than one reader. His raw and direct vocabulary, which had already caused some surprise when, many years before, he had tried his hand at literary writing and the translation of Latin texts, is perhaps better suited to economic material. But the author’s greatest weaknesses are his interminably long sentences in which one loses the subject or object, his syntax which is very often defective and the repetitions ad nauseam of certain points. But even if his style does not fit the aesthetic canon of the day, the very specific and idiosyncratic manner in which Boisguilbert presented his case to high officials and to the public gives equal cause for reflection. In his heroic battle for truth against error, the author settles himself in good company, readily comparing himself to Christopher Columbus, Copernicus and even the archangel Saint-Michael. I am suffering the fate common to all those who introduce surprising novelties; the quality of madmen or men who have lost their reason have always been preliminaries to the audiences they were granted, and the most recent, Copernicus, also had to face the threat of being burnt to death. (to Chamillart, 25 June 1705, p. 381) The battle waged is without precedent: the trial Boisguilbert brings against ignorance and deception ‘is the greatest trial ever brought by a pen since the beginning of the world’ (1705c, p. 742), for the adversaries are many and fearsome. For example, money, which has been denatured by the manoeuvres of the traitants and other partisans: ‘This is the monster which must be brought down today, striking it with so much force that never again will it be able to rise from its fall’ (1705b, p. 705). Or else the aides: In a word, the plague, war and famine or all the curses of God in the greatest wrath of heaven, or in their ravages the most barbarous conquerors never produced more than a twentieth of the ills which this tax has caused . . . in the kingdom. (1704a, pp. 346–7) While the violent tone, the forced nature of certain images and the undoubtedly ‘leaden’ style of his writing have a unique effect in Boisguilbert’s work, conferring on his prose an almost incantatory turn of phrase, they also reflect the current of thought of which he is a part, namely, Jansenism. For Boisguilbert was a student at the Petites Écoles of PortRoyal5 and its mode of expression evidently remained with him. The writer who inspired him above all was Pierre Nicole, whose treatise De l’éducation d’un prince and whose Essais de morale had a tremendous impact in the second half of the seventeenth century. Amongst other words of praise, Madame de Sévigné herself declared that Nicole’s writings seemed to be ‘of the same cloth as Pascal’.

4

Introduction

Although Nicole’s works, which were still in fashion at the beginning of the nineteenth century, have fallen into an unjust oblivion nowadays, one should nevertheless recognise that Mme de Sévigné’s praise is somewhat exaggerated. ‘And were we to concede this to her, it would be on condition that one immediately add this . . . retort by M. V. Fournel: “So be it, but the tailor is different” ’ (F. Cadet, 1887, pp. 45–6). Joseph de Maistre’s judgement is even less flattering; comparing Nicole to the other Port-Royal authors, he describes him as ‘the coldest, greyest, most leaden, most unbearable of the bores in this great house of boredom’. Nor is the ‘Port-Royal’ style spared by Henry de Montherlant: apart from Pascal, ‘the Jansenists are very poor writers. Yet, I resisted from making Arnauld speak in rhetoric and Saint-Cyran in gibberish on stage, as they ought to have spoken, to judge from their writings’ (1954, p. 151). Many of their contemporaries made no mistake as far as they were concerned. In Deuxième entretien d’Ariste et d’Eugène, Father Bouhours (who was admittedly a Jesuit) mocked the stylistic excesses which were common to these authors. True . . . these so very famous writers cannot be accused of being laconic; naturally, they favour vast discourses; long parentheses appeal to them very much; great periods, especially those which suffocate those who pronounce them through their excessive grandeur, are entirely to their taste . . . . Nothing is more common in their first books than exaggerated expressions such as: the greatest and most punishable of all impudence, the most stinging of all invectives, the most peculiar recklessness and the most gross ignorance which ever was’.6 Boisguilbert’s style is the direct inheritance of his masters, and often even surpasses them; examples of it are legion. Expressions such as ‘criminal money’, ‘the speculation which can never produce anything but monsters’, ‘a terrible corruption of the heart’, ‘a pernicious seed’, are common currency for him. ‘Some will reply unfailingly that consumption does not take place because money is lacking, but immediately we shall respond that this is the most gross and ridiculous imposture ever presented’, he wrote in Mémoire sur l’assiette de la taille (1705b, p. 673). If syntactical problems are left to one side, a striking comparison can still be made between Nicole and Boisguilbert in relation to their manner of constructing rather laborious metaphors which are intended to appeal to the reader’s imagination. In regard to Nicole, F. Cadet remarks correctly (1887, p. 38) that it is rare that Nicole succeeds in raising his voice to achieve the tone of eloquence which is so poignant in Pascal; he often lacks the authority and true passion needed to move us profoundly. He leaves us cold, and would cause us to smile rather than tremble when, for example, he presents us with the entire world under the empire of the devil, as “a place of torment . . . full of all men’s instruments of cruelty, and filled

Introduction 5 part with torturers and part with an infinite number of criminals abandoned to their rage . . . We spend our days in the midst of this spiritual carnage, and we might even say that we swim in the blood of sinners, that we all are covered with it, and that this world in which we live is a river of blood” (De la crainte de Dieu). He is no more successful in this portrayal of the conscience of the sinner at the moment when he appears before his judge, where he compares this conscience to “a vast, dark chamber, which a man works all his life to fill with vipers and serpents . . . . When he least expects it, the windows of this chamber open all of a sudden, letting in the broad daylight, and the serpents all awaken at once and throw themselves at the wretch, tearing him apart with their bites . . .” (Du jugement). He represents the original corruption of man thus: “One should imagine a universal wound or rather a mass of sores, pestilence and anthrax covering the body of a man, etc.; this is the image of the state in which we are born” (De la connaissance de soi-même). Always the same weakness and impotence with the same excess. Cadet’s judgement could very well apply to Boisguilbert himself. To cite one example amid so many others which we shall encounter during the course of this study: It happens in the same way as if a prince, abusing his authority, which is not at all unheard of in the persecutions of the new Church; [as] if, I say, in order to torment and cause to perish various subjects in a grotesque fashion, a sovereign had ten or twelve of them chained one hundred foot from one another, and one of them being entirely naked, though it was mightily cold, had an awful quantity of meat and bread next to him, ten times more than he could consume before perishing, which would soon occur since he would lack all the rest, particularly drinks, of which he would not have a single drop to hand; while another, chained up at the same distance, would have some twenty sets of clothes around him, three times more than ever he could use in several years, without any food to sustain him in life, and he would be prohibited from providing himself with any; while another, at a similar distance, would find himself surrounded with several hogshead of drink, but without any food or clothing. After their wasting away, which would be inevitable if the violence continued right to the end, it would be true to say that they would have all died of hunger, cold and thirst, for lack of drink, bread, meat and clothing. However, it would be absolutely certain that taking the situation in general, not only did they not lack neither food nor clothing, but that, without the greater strength, they could even have been clothed and well fed. (1707b, pp. 1010–11) . . . all this to illustrate by contrast, the benefits of free trade.

6

Introduction

III To complete the theme of the various aspects of the writings of this Alceste fin de règne which, apart from their actual content, could have acted as an obstacle to a sympathetic reception by his contemporaries, two other features must be considered: his constant critique of the administration of Colbert and his successors to the position of Controller General of Finances, and the paradoxical manner in which certain fundamental principles in his system are formulated. With admirable consistency Boisguilbert states that France’s decadence began in 1660. Already in the Détail de la France (1695) he wrote: ‘it is claimed that today the product is five or six million [less] a year in his revenue . . . than it was thirty years ago’ (p. 582). The decrease in revenue, calculated ‘by very long and meticulous research’ (p. 585), ‘began in about 1660, and continues to increase every day’ (p. 583). The guilty party is identified clearly: The fact must be constant, namely: the error lies in the past. As a basis then, and as a principle, it can be maintained, with just as much certainty as it is a constant that the river Seine flows through Paris, that the late M. Colbert joined the ministry in 1661, that at that time the King had 80 million in revenue, and even more . . . and that at present, in 1703, when the revenue is settled, the King has hardly 120 million, since the capitation is not a revenue at all; of which the King’s conquests form at least 10 million. Thus, in more than forty years, there has been but a rise of one third. Yet, if one goes back in retrograde from 1660 to forty years previously, namely to 1620, just 35 million in rentes are to be found. Thus, in those forty years, the King’s revenue more than doubled. Going back again from 1620, again we encounter just 16 million in 1570: such that we must be more certain than ever that the revenue of the Prince received so small an increase only under the ministry of M. Colbert and his successors. But the situation is far worse in regard to the people and their opulence . . . . And yet, Monseigneur, how can this manoeuvre be accorded the supposed heroism of the ministry, a heroism which is claimed by those in whose interest it is to close their eyes to the light of day? And to the contrary, along with the merchants and farmers, I myself maintain that the destruction of what this ministry has done is equal to gold ingots. (To Chamillart, 27 October 1703, pp. 293–4) Later, Boisguilbert said essentially the same to Desmaretz, even if on that occasion, simply by praising Sully, he covered over the name of Colbert, for good reason.7 Although

Introduction 7 this theme of the contrast between Sully and Colbert’s administrations was not really new, it was heightened and enjoyed its heyday during the polemics of the second half of the following century. This emphasis goes hand in hand with the constant reference to the foreign models offered by Holland and England, which must have sounded equally unpleasant to the ears of the French governments: ‘I call upon Holland, England and M. de Sully as my guarantors.’8 Finally, in regard to the somewhat paradoxical twist Boisguilbert gave some important propositions, no doubt to better impress the reader and to present them as maxims, the titles of several memoirs readily illustrate the point, such as this abstract for the Traité . . . des grains: ‘A memoir which in essence shows that the lower the price of grain, the greater the misery of the poor . . . and that the more grain leaves the kingdom, the more one is protected from an extraordinarily high price.’ Such premises were understandably disconcerting for readers. In regard to this issue, an important testimony exists from the Controller General himself, in the form of a note he wrote in the margin of a letter Boisguilbert sent him on the 21 September 1704. Offended by his correspondent’s remarks, Chamillart advised that he remove two elements from your system, both of which are equally false; after which I shall hear you as often as your like. But since my mind is not as subtle as yours, I must tell you that we shall never agree so long as your arguments do not become more like constant truths which all men are capable of understanding. The two elements which I take to be false are: one, that the rarer money is in France, the more there is of it . . . . And the second is the article regarding the financiers. (p. 329) Chamillart’s comment on the first point is significant as it articulates both his incomprehension and his correspondent’s manner of expressing himself. As for the ‘financiers’, the Controller General’s comment could only serve to confirm Boisguilbert’s position: They are protected only so long as they are necessary; one would easily do without them no sooner something better appeared; and this is what stands even more against you and your arguments, attacking me in such a weak spot, one which has never made any impression upon me. (p. 329) Chamillart made an analogous misinterpretation in regard to the meaning of another essential proposition, namely the recovery of the king’s finances through those of his

8

Introduction

subjects. Indeed, in the margin of a letter of Boisguilbert dated 25 June 1705, Chamillart noted: In the various audiences I granted him last year, it was not on my account that he failed to find the means of persuading me; I was very well disposed to do so, and perhaps I wished for it even more than he. I believe that his ideas have not changed, and, if he wishes to renew contact with me, he must prove to me that the 80 million by which he wishes to increase the revenue of the King will come in part from foreign countries, because, as I know France almost as well as he, he will find it hard to persuade me that we could draw another 80 million from the people, beyond what the King already collects. (p. 381) IV To conclude this introduction, it is now a matter of noting a few difficulties in understanding encountered by a modern reader, though we will of course encounter others later. Here we shall consider two: the dating of the texts and the author’s occasionally idiosyncratic use of the current vocabulary. Although some of the texts were published by Boisguilbert himself, their dating is difficult to establish. The Détail de la France appeared in 1695, but parts of it were written long before. The other texts were printed in 1707, though it seems that they were composed around 1704. Finally, all the manuscripts and important memoirs which remained unpublished were also dated to the same period, or even the same year, with the exception of the first Factum de la France (1705c), which was written long before, but was revised at that time. Hence, the dating of references is partially arbitrary, and the second Factum de la France and the Dissertation sur la nature des richesses are dated (1707a) and (1707b) respectively simply on account of a greater degree of achievement. Moreover, this problem is not purely formal; it has consequences for a study of Boisguilbert’s entire work. Faced with these texts dating from around the same period, commentators stress the unity of the work as a whole,9 and the lack of evolution in the principles presented. In this study, too, the texts are treated as a whole. However, the problems related to a possible evolution in the author’s thought (in regard to the ‘state of nature’, currency or expectations) also form a part of this analysis. They often denote a process of theoretical definition, but they may also occasionally suggest significant indecision, pointing to a more important problem. Finally readers of Boisguilbert must be very attentive to the vocabulary he employs. Besides the definitions specific to the era, in the following chapters I shall indicate a few particular usages relating to the words opulence, équilibre, harmonie and richesse (opulence, equilibrium, harmony, wealth) which are often used as synonyms and are likely to involve

Introduction 9 a dual definition as both a state and a process. The words bien, revenu and besoin (good or possession; revenue or income; need) are also ambiguous. For a modern reader, it is as if there were a constant confusion of cause and effect. Thus although the term besoin (need) has the modern connotation, it also has the sense of ‘satisfaction of a need’, that of an object fulfilling a need. In the second Factum (1707a, p. 888) we read that for a long time the ‘two children of Adam’ were ‘the constructors of their own needs’; and that since humans are not in a state of self-sufficiency they cannot ‘be the forgers of their own needs’ (1707b, p. 973). Or else: ‘At the beginning of the world, through the destiny of nature and the order of the creator, wealth was no other than an ample enjoyment of the needs of life’ (1707a, p. 888). A restricted sense of the word besoin also emerges here, designating all that is essential to the preservation of life. This meaning is confirmed occasionally elsewhere (the price of grain should ‘provide the owner with the means to satisfy a surplus of his needs’, 1704b, p. 858).10 Not only is the word besoin used in the place of the word bien (good); but the word bien also designates what we would call revenu (income). In one classification (1705b) Boisguilbert defines a first category of biens as ‘les revenus en fonds [funds income], such as terres, rentes, charges, and even billets courants [land, life annuities, charges, current notes]’ (p. 727). And these same biens, he also terms biens en revenu (ibid.). Paying attention to this fact enables one to understand curious statements such as: ‘there being nothing so pernicious as to take the capital of an individual’s bien for the needs of a prince’ (1695, p. 660), and helps avoid serious misunderstandings when dealing with taxation. While on the one hand we are told that the taille should be fixed ‘at a tenth of the revenus des fonds’ (1705b, p. 724); on the other hand Boisguilbert claims that the capitation should be a tax on all biens (‘For the interest of the rich then, the capitation should be paid at a tenth of all biens, as much in fonds as in industry’, 1707a, p. 944). But obviously this is not a tax on capital. To crown it all, revenu is sometimes the equivalent of consommation (consumption), thereby confusing income and its use; and the term consommation is understood in a wide sense of expenditure. It is usually a matter of the revenu of individuals, apprehended over a given period through the summation of the flow of money. But on the individual level as on a global level, an ambiguity remains, particularly for taxation. This is how Boisguilbert expresses it: all the income or rather all the wealth of the world, that of a prince as much as that of his subjects, consists only in consumption, since all the most exquisite fruits of the earth and the most precious produce are but manure until they are consumed.

(1707a, p. 893)

10

Introduction we establish the principle that consumption and income are one and the same, and that the ruin of consumption is the ruin of income. (1695, p. 602)

The reader must therefore attempt to clarify ambiguities according to the context, which it is possible to do in most cases.11 Boisguilbert’s theory as a whole then emerges without arbitrariness. The essential point is that the principal notions are always clearly established, if not in name, at least in fact. V The present study is situated at the borderline of two trends in thought in which fashion, political resonance and the occasionally superficial writings which they produce should not be allowed to mask their importance. This book was written, firstly, at the time of an emergent upsurge of interest for everything related to liberalism, both economic and political, for the practical conditions of its implementation, and for the theoretical evaluation of the proposition of efficiency which it forwards. At the heart of received ideas on this subject, several ‘conclusions’ are to be found, drawn from a frequently misinterpreted Walrasian model of general equilibrium: for example, the well-known proposition that optimal economic equilibrium will automatically establish itself as soon as each agent, in competition with all the others, is left free to pursue their own interests exclusively. Used without precaution in support of an intolerant and brutal economic liberalism, this assertion is one of the many examples of the misleading publicity favoured by political activities (of whatever sort they might be). And yet there is no lack of warnings by serious theoreticians who emphasise the fact that the Walrasian theory could in no circumstances present itself as being explanatory and that rather it serves only to draw up a rigorous list of conditions – which are extremely strict and very far removed from reality – whereby the principal proposition of liberal political economy would be achieved. In this proposition one of course recognises the theme of the invisible hand as it was popularised by Adam Smith. It is at this point that we encounter the second trend in thought referred to above: reference to (and reverence of) Adam Smith has become a ritual; but political economy did not start in 1776. Many authors have long since emphasised that many of the themes in this supposedly foundational work were not original. Once again interest has been shown in their origins and, gradually, the great wealth of the thought of an earlier period has become apparent. What follows is a part of this systematic re-examination, and my hope is that through the increase in numbers of partial, always perfectible studies, we shall gradually – as indeed is already partly the case – achieve an important renewal of our understanding of this period and, beyond it, of the history of economic thought. One of the themes of this essay is that, in terms of economics, the first

Introduction 11 rigorous appearance of the principal liberal proposition is to be found in Boisguilbert’s writing. I shall present its origin, statement and developments, for this idea is in fact inserted within an extremely innovative, skilfully constructed theory, which deserves to be brought to light. In the following chapters we shall first of all consider Boisguilbert’s intellectual environment. The inheritance of assumptions is complex; a triple influence emerges, which Boisguilbert accepts, adapts or transforms in depth according to the requirements of his construction. It involves Bodin’s ideas (and, to a certain degree, those of Richelieu) on political theory; the Cartesian tradition; and above all, in philosophical and social matters, the taking up again of Jansenist themes developed by Pierre Nicole and Jean Domat. From this analysis there emerges a Boisguilbert who is a Cartesian, an absolutist and an Augustinian. We shall demonstrate that this triple characterisation has profound implications in terms of an analysis of associated themes (those of taxation, the physical conception of equilibrium, etc.), avoids misinterpretations which would damage the analysis and prepares the ground for the presentation of economic theory proper. Fundamentally, Boisguilbert’s model consists in the articulation of two different approaches to economic reality, onto which are grafted the opposition of two types of functioning by the system: one in a ‘state of opulence’; the other in a state of depression and economic crisis. The first approach involves an analysis in terms of social classes and is based on a disaggregate of market structure. After the Fall (the theological starting point), a classless society survives very happily: this is the ‘natural state’, in the first sense of the term. But the violence of men one against another causes the appearance of an idle class (the rentiers), money and a multiplication of needs and professions: the ‘polished and magnificent state’, or ‘natural state’ in the second sense of the term, when it is in a situation of optimal equilibrium. The structure of society is characterised by general economic inter-dependence of activities, onto which the circuit of income of the idle class grafts itself. The analysis of economic equilibrium then takes place in two stages. First of all, there are three conditions for the existence of the equilibrium of opulence: the achievement of a system of ‘proportionate prices’, that of the ‘tacit condition of exchange’ and finally, free trade. If these three requirements are fulfilled, Boisguilbert claims that the selfish and maximising behaviour of the agents automatically leads to equilibrium and to the wellbeing of all through the simple play of market forces. The fundamental idea of the efficiency of ‘free trade’ therefore originates in one of the most austere versions of the Catholic religion . . . But the second point is that the conditions of equilibrium do not only concern the productive class. In order for this equilibrium to come into play effectively, the idle class must respect its implementation. Through an analysis of the phenomena of the opacity of information linked to the existence of money and the social structure, Boisguilbert demonstrates that in fact these conditions are constantly put into question by the rentiers, who thereby find themselves to be at the origin of destabilising shocks. If, therefore, in a

12

Introduction

system of free trade private vices are public benefits, to use a famous expression, then it is true only for the productive class. There is no coercive mechanism such as competition to regulate the behaviour of the idle class, and its selfish attitude (as also with any possible altruistic sentiments) must be enlightened, in the Jansenist sense of the term. A second approach completes the first. It involves an analysis aggregated into five markets which are those of agricultural products, manufactured products, labour, ‘investment goods’ and loanable funds. In order for it to be articulated with the analysis in terms of social classes, two behaviour types for agents must first be identified: speculative and precautionary behaviour in relation to both goods and money. Next, it is necessary to distinguish between the markets with flexible prices and those where prices are downwardly rigid. Finally, the connections between stocks and flows imply that the role of the agent’s expectations on the different markets be taken into account. Boisguilbert then describes the processes of economic disequilibrium and their consequences. Agents’ behaviour in terms of stocks and flows of goods and services explains the amplification of the fluctuations on a given market; the strategies in terms of money are linked to the analysis of the propagation of disequilibrium from one market to another; and the rigidity of some prices explains the deepening of the crisis and the movement of the economy into a state of depression. It should be emphasised that while the role played by expectations (and thus information) is essential in all these processes, they are not the real cause of economic crises. Expectations may be either stabilising or destabilising: it all depends on the context in which they are operating. Boisguilbert’s work is therefore both coherent and original. His construction allies the notions of general equilibrium and circuit, social class and market, a micro and a macroeconomic approach, information and expectations, fixed prices and flexible prices, in the analysis of prosperity and depression. In other words, it allies notions which, for the most part, often appear to be antithetical, but whose combination produces remarkable results.

1 The context (I) Social and political Augustinianism

I At first glance Boisguilbert’s texts present several difficulties which the reader must overcome in order to grasp the significance and coherence of his work. Some of these difficulties result from his ‘leaden’ style, or his occasional apparently contradictory remarks; but there are also other more serious difficulties. For example, the vocabulary employed may lead to errors, not so much on account of seventeenth-century language, but because of his particular usage of certain words such as bien or revenu, whose meanings we shall examine. Once this difficulty is surmounted, the purely technical and economic aspects of the various texts under consideration may be misleading by creating the impression of a facade of false simplicity. Boisguilbert’s texts are undeniably scientific in character, achieving a refinement rarely obtained previously. But to limit our understanding to this aspect, without pursuing the enquiry any further, would be to risk at least a partial misunderstanding of the theoretical construction, if not misinterpretations. The intellectual climate of the era, political and religious opinions and theoretical origins are all extremely important, if only to clarify this author’s particular contribution and the meaning of his project; and it must be admitted that as far as this aspect is concerned, Boisguilbert hardly facilitates our task. We might at least help ourselves by means of the authors who are cited; unfortunately, however, the use of explicit references is far too recent a practice, so that only a few names appear in the texts (e.g. Gerson, Amelot de la Houssaye, Jacques de Sainte-Beuve), and they are of little help. A veritable deciphering project must therefore be embarked upon as the necessary preliminary to a reconstruction of the author’s theoretical framework. Without claiming to be exhaustive, the goal of the first two chapters of this study is to draw out a few of the salient aspects of Boisguilbert’s intellectual context in France. Of course, there have been many attempts to compare the theoretical principles which emerge from the Détail de la France or the second Factum de la France to those of Anglo-Saxon authors of the same period in order to uncover possible influences: one of the conclusions drawn by the present study, however, offers a very different perspective. Perhaps Boisguilbert did read Petty, Child, Temple or Locke,1 but in this instance the connections with exclusively French concerns and intellectual traditions are too great not to merit exclusive attention.

14

The context (1) II

Let us start by examining Boisguilbert’s language, for a useful point of departure in this enquiry is an analysis of the metaphors he employs and the significance of their recurrence. From this perspective, the frequent use of religious vocabulary and images is immediately striking. Gold and money, for example, are described in terms of idols on whose altar the true wealth (commodities) is sacrificed: they are the tyrant or rather the idol of these same foodstuffs, forcing subjects devoured by avarice to offer them in sacrifice at every moment, and receiving almost no other incense than the smoke which is born of the burning of the most precious fruits and most beautiful gifts of nature. (1704a, pp. 347–8) In another recurrent example Boisguilbert claims that in public life no one who has failed to bring about true ‘miracles’ should be ‘canonised’, and that the all too common opposing attitude is only the product of the ‘corruption of the heart’ (1704b, p. 806). Obviously this use of religious vocabulary is not gratuitous. In fact it is one piece of evidence – other aspects will be studied later – of Boisguilbert’s belonging to a predominant intellectual current which traversed the French seventeenth century: Jansenism.2 This is suggested by his thematic choices, and is confirmed by several clear allusions to famous debates of the period: the quarrel of right and fact (la querelle du droit et du fait)3 concerning the five propositions drawn (or supposedly drawn) from the Augustinus by Jansenius and which were condemned by the pope;4 as well as the question of papal infallibility which was occasionally linked to this quarrel. Transposing the theme, Boisguilbert asserted that one must ‘purge an idea of claimed or supposed infallibility from all those in eminent positions, for it prevents one from conceiving that they could be responsible for such a fearful error’ (ibid., p. 790). An ‘unthinking applause . . . accompanies all those occupying the highest positions, who make use of all kinds of devices to persuade them that they are infallible’ (p. 792). This Jansenist perspective – adopting a style apparently inherited directly from P. Nicole – informs a large part of the theoretical construction and dictated the themes which were a part of Boisguilbert’s originality. Along with religion, another recurrent theme is the theatre. Economic agents are often described as ‘characters playing their roles in the Republic’ (1704d, p. 967), as ‘various characters or performers who contribute to . . . the perfection of all sorts of projects and trade’ (1704b, p. 874). Thus transactions must be made ‘with a perpetual utility for all those playing a character in this theatre, in other words, all human beings’ (1707a, p. 896). The second Factum is replete with expressions such as ‘here is the first act of the play’ (p. 887). All these ‘actors’ (p. 907) are playing in a tragedy in which self-love and concupiscence mingle with flattery and individual interests so as to mislead state leaders, deadening their goodwill or perceptiveness beneath eternal ‘applause’. There is nothing but ‘surprise’, for

The context (1) 15 there is ‘no ill will in the masters of the theatre in which such a scene may take place today’ (1707b, p. 1011). The term ‘applause’ recurs frequently in Boisguilbert’s writing, connoting the flattering deception of the courtesans or those with a direct interest in perpetuating a disastrous state of affairs. They are often the ‘heroes of the play’: ‘These clever financiers . . . go back to the theatre . . . wanting to make the most of their talent’ (1707c, p. 823). And since, furthermore, all good tragedies include a death, crimes exist, as is proven by the cadavers presented to the public. ‘The cadaver . . . is inevitable, through the devastation of farming and trade.’ (1707a, p. 934). Here, again, it can only be a matter of a baroque rhetorical figure which was very popular in the seventeenth century (Descartes himself uses it)5 and which fits perfectly with the spirit and the letter of court society6 where reality and fiction were irretrievably confused, and where the notions of spectators and actors were interwoven in the daily operations of the representation of power.7 However, some allusions do not deceive any more than does the constant association of the theatrical act with corruption, lying and decadence. This image which is constantly evoked denotes two other more important cultural facts: the Jansenist conception of society again, and the mechanistic view of the world. III First of all, the Jansenist conception of society. I shall return to this in detail later in the chapter. Suffice it to remark here that, in accord with its ethic, this current of thought adopted the whole anathema the Church had directed against plays and the acting profession for a great many years; it had even extended them, to some extent, to all artistic disciplines which mask reality, thus rendering sins, faults and the most reprehensible passions ‘amiable’.8 ‘Play acting was honoured amongst the pagans’, Antoine Singlin, Superior in charge at PortRoyal, wrote to the Duchesse de Longueville, ‘although the strictest amongst them ignored it’, . . . but it was in vogue at that time, and the false gods often ordered spectacles to be presented, which proves that it is the remains of idolatry. One can even say that it is the conclusion and end of idolatry, since in play acting the devil receives the greatest sacrifice to be offered to him, a sacrifice not of beasts, but of men, not of the bodies of men, but of souls immolated to him through vice and crime exclusively . . . It is therefore wrong to imagine that today play acting has become innocent, as if it had altered its nature. Actors are always infamous and play acting is always an evil.9

16

The context (1)

These ideas were also developed by Pierre Nicole in his Traité de la comédie,10 which echoed a famous polemic with another distinguished Jansenist who, for good reason, could not accept this point, namely Racine.11 The opinion is found in Boisguilbert’s work, expressed in two different, recurrent forms. There are innumerable passages, particularly amongst his letters, in which Boisguilbert denies being a ‘visionary’ (a term Nicole used to designate the playwright Desmarets de Saint-Sorlin during a famous controversy).12 I have the honour of sending you my first work, corrected and annotated throughout, which I believe will serve as a response to the objections you took the trouble to convey to me . . . I accept being considered as a visionary by you if, on every reading, you make no new discovery.13 Furthermore, as we shall see, Boisguilbert places the acting profession in the last position on the scale of utility and needs, presenting it as the very symbol of luxury and the corruption of mores. Of the two hundred professions existing in a ‘polished and magnificent’ state of society, the last is that of the actor, who is the final work of luxury and the highest mark of an excess of the superfluous, since his role consists merely in flattering ears and pleasing the intellect through the simple account of fictions which one knows full well have never been real; such that one is so far from the fear of lacking the bare necessities that one may purchase the presentation of a lie with pleasure. (1707b, p. 988) Finally, it should be noted that the image of the theatre agrees with that of a spectator God, the ‘hidden God’ so dear to Port-Royal. IV The theatrical image also implies another complementary idea which was the object of passionate discussions throughout the century: that of a mechanistic explanation in the sciences. This is the omnipresent mechanism which Descartes imagined applying even to physiology and which, consciously or not, many authors wished to extend to the description of the functioning of societies. It is common knowledge that Hobbes was amongst these authors; but so too was Nicole, and Boisguilbert followed him into this area. From this perspective, the theatrical metaphor is a good illustration of the project of searching for the wings and machinery which will provide a physical and rational explanation behind the stage of the movements made by the objects and actors on it. This is what Fontenelle explains to the Marquise in a famous passage in Entretiens sur la pluralité des mondes habités (1686).

The context (1) 17 True philosophers spend their lives not believing what they see, and trying to make out what they do not see . . . In relation to this I always imagine that nature is a grand spectacle similar to the opera. From where you sit in the opera, you do not see the theatre exactly as it is; the decorations and machines have been arranged so as to create a pleasing effect from a distance, and the wheels and counter-weights causing all the movements are hidden from sight . . . But what increases the difficulty for the philosophers, is that in the machines brought before us by nature, the ropes are hidden perfectly, so well hidden that it took us a very long time to work out what caused the movements of the universe. Try to imagine all the sages at the opera, for instance Pythagorus, Plato and Aristotle . . . let us suppose that they saw the flight of Phaëton lifted up by the winds, that they could not detect the ropes, and that they had no idea how the back of the theatre was arranged. One of them would say: ‘A certain secret virtue removes Phaëton’. Another: ‘Phaëton is not made to fly, but he prefers flying to leaving the top of the theatre empty’; and there would be a hundred other reveries . . . Eventually, Descartes and a few other modern sages would come along and say: ‘Phaëton goes up because he is pulled up by ropes, and because a weight heavier than him goes down’ . . . In that case, has philosophy become mechanical? asks the Marquise. So mechanical, I answer, that I fear we may soon be ashamed of it. They want the universe to be a larger version of a watch, and for everything to be directed by regulated movements, dependant on the arrangement of the parts. (1686, pp. 49–51) Boisguilbert’s search for a social physics, an economic mechanism founded on ‘those springs we have just spoken of [the interests of the agents], which cause this machine to work’ (1705b, p. 754), is proof that he shares this opinion. In a letter to the Controller General, the recipient is described as the ‘sovereign conductor of the watch’ (20 July 1704, p. 321), and the subjects are compared to ‘so many parts of the watch concurring in the common movement of the machine, such that the disturbance of a single one of them suffices to stop it entirely’ (p. 320). We also read in Dissertation de la nature des richesses (1707b, p. 997) There is . . . a concern which virtually no one has considered, which is that the opulence which consists in the maintenance of all the professions of a polished and magnificent kingdom, which support each other and ensure their reciprocal success, is just like the parts of a watch, and that nearly all of them differ in their reliability, and are liable to various failings.

18

The context (1) The problem is also illustrated by the image of a set of scales,14 in which the movement

of the pans conveys an amplification of the disruptions linked to the phenomenon of speculation and cumulative processes. ‘So to return to the image, here before us is a pair of scales which has lost its balance’ (1704b, p. 862; cf. also p. 860). The concept of economic equilibrium owes a great deal to this kind of approach. But, and this is the essential point, Boisguilbert draws more from mechanics than these few general ideas. To demonstrate this it is simply a matter of considering the other metaphors which are used, starting with those linked to hydraulics and its machinery. Beyond the analogies (‘tributes flow to the hands of the prince like rivers flow to the sea’, 1707a, p. 941), it is a matter of persuading the reader that only natural ‘machines’ are perfect. If need be, one can build entirely artificial machines, but they are always less complex (there is a world of difference between an automaton and a living being). Any mixing of the two, any intrusion of the artificial into the natural, can only engender the monstrous. This is true, for example, in relation to the grain policy. ‘Stocks are necessary, but it is for nature to create them, not authority and violence. And to return to the example of springs, the ponds and lakes they form naturally, without any foreign agent, create a very great utility’ (1704b, p. 870). There is no difference between the situation of the population today and the water drawn from the Seine above Saint-Germain with machines and aqueducts which carry it up the hill: we know the considerable time and effort required to do this violence to nature, and that it must be maintained with the same precision. And yet, to return the water to its course, requires only half an hour of a man’s labour to remove the joint of the canals, and then with nature acting freely we would see everything return to its original state. (1705c, p. 770) Other metaphors hardly seem to depart from the area of mechanics, in evoking, for example, medicine. The draining away of grain from the kingdom or from a province with a surplus is compared to the bleeding necessary to the good health of the body of the state.15 This inevitably leads to organic images in which the different ‘states’ or classes are likened to parts of the human body, in which all disturbance is illness: ‘just as France has gangrene at present, or a kidney stone, if you like, for its recovery it is necessary to lance living flesh and to operate violently on the most noble parts, since ordinary remedies are no longer appropriate, and are found to be weaker than the forces of evil.’ (1704a, p. 882); the body of the state is like the human body, in which all parts and members must contribute equally to the upkeep of the whole, given that the upsetting of one immediately upsets the whole, causing the subject to perish. This is what makes it so

The context (1) 19 that not all the parts have equal strength and vigour, with the most robust exposing themselves and even presenting themselves for the attacks made on the most weak and delicate parts . . . In the body of the state, the poor are the eyes and the skull, and consequently, the delicate and weak parts, while the rich are the arms and the rest of the body. The blows suffered on account of the needs of the state are almost imperceptible against the strong and robust parts, but they are deadly when they touch the weak points, which are the miserable poor, thereby producing upsetting repercussions for those who refused to help them. (ibid., p. 943) V These images are not opposed to one another: organicism does not contradict mechanics, especially for a Cartesian. But beneath the apparent diversity of the formulae, it is important to identify the common feature, namely the idea of movement (this even extends to the evocations of military metaphors). This movement is necessary, constant and the natural state of a body when it is not hindered by any other body or by an impact. As we know, this is one of the fundamental postulates of the mechanics in which everything is movement of matter and everything is directed by the incessant collisions of its elements (at least for Cartesians). This conception forms the basis of Boisguilbert’s concept of equilibrium. As will be shown, all causes (which are ‘violent’ by definition) preventing the natural movement of elements, or modifying (slowing down) this movement, can only disturb the initial natural equilibrium, causing a degeneration of equilibrium and a less optimal state. Viewed in this perspective, this conception is a-temporal. Once the element which is foreign to the mechanism has been identified, one can return to the initial state simply by removing it. The different states are perfectly and immediately reversible. To return to the hydraulic image, the disturbance of a watercourse, caused by an ‘unnatural’ element (a dike) may be removed immediately: ‘. . . a torrent halted on a slope by a strong dike would flow downhill as soon as that which held it back was removed; which only takes a moment’ (1707b, p. 1012); the mere knowledge of the cause of the evil provides the entire remedy by stopping it, since these two things are inseparable in an art such as the government of a people. In other words, the remedy of an evil is never anything other than the cessation of its cause, despite the pitiful allegations that the author of the first work [Détail de la France] found the principle of disorder for this subject, but did not find the remedy, which is utterly impertinent since one has never seen one without the other, any more than there can be a mountain without a valley. (1707a, p. 907)

20

The context (1)

Cartesian mechanics imply the erasing of all differences in nature between physical and human phenomena. The application of these principles to the economic and social world is therefore constantly made by Boisguilbert, and, as we shall see, this creates some difficulties. These difficulties concern the definition of the natural state (there are two: one based on the principle of reversibility, the other not), the definition of general economic equilibrium and the taking into account of expectations (in which a learning phenomenon may disrupt the reversibility of the underlying mechanisms). But this conception is fundamental. For one, it establishes a part of Boisguilbert’s free trade doctrine: it only takes a moment to change this unhappy situation immediately . . . into a very contented state. It is not a matter of acting, it is simply necessary to stop acting with the very great violence we impose on nature, which itself always tends towards liberty and perfection. (1707b, p. 1005) Furthermore, the models of hydraulic mechanics indicate the principal direction of movement, from ‘too full’ towards ‘not enough’ and from plenty to shortage. Thus trade and exchange are understood in the most general sense, one which is applicable to all beings and/or things: a ‘perpetual commerce’ (1695, p. 640) between men (artisans and trade), between men and nature (agriculture) or within nature itself (exchange, i.e. the compensation of infertile and plentiful years). Justice in trade, i.e. proportions (see below, Chapter 4), must be achieved not only between one man and another, but also between one country and another, one province and another, one kingdom and another, and even between one year and another, by reciprocally helping one another by supplying them with what they have in excess, and receiving what they lack in exchange. (1707a, p. 891) Wealth is therefore perpetual movement. It ‘consists in a continual exchange of what one has in excess with another, taking in return that which the person one is dealing with has in plenty’ (ibid., p. 919). It is a ‘constant mixing’ (1707b, p. 991). In this context ‘wealth’ is likened to ‘opulence’, ‘harmony’ and ‘equilibrium’.16 This contributes to a better understanding of the argument presented in terms of destabilising shocks (produced by artificial obstacles) and the velocity of circulation of money. It also clarifies the qualifying descriptions attached to money: ‘dead money’ and ‘live money’.17 Obstacles, rest and slowing down constitute death and economic crisis. Incessant movement is life, prosperity and equilibrium. ‘The first [dead money] is that which, being immobile and hidden, is no more useful to the state than if it were stones . . . and the other, which is alive, is the one which always works and which is never for a moment at rest’ (ibid.).18

The context (1) 21 VI To draw this theme to a close, it should be remarked that the Jansenist inspiration and the mechanical inspiration are not mutually exclusive, quite the opposite. As commentators note,19 despite a certain ambiguity surrounding the validity of the sciences and the vanity of their practice,20 the Port-Royal milieu was favourable to the scientific development of the century. At the time many authors emphasised the concordances between the writings of Descartes and those of Saint Augustine. P. Nicole in particular, whose Essais de morale were highly valued by educated people of the time, did not hesitate to use a Cartesian physics of man and to transpose the whirlpool theory (la théorie des tourbillons) to a study of society influenced by the passions and the divergent interests of its members. ‘Everything in the world naturally reduces to a kind of equilibrium’, he asserts (1670, p. 146); in society, ‘the good and evil of the different conditions balance each other out, so much so that almost all are found in equal proportion’. Taking up the Cartesian concept of the soul and the body again,21 he used whirlpools to emphasise, first, the uncertain character of life ‘exposed to a thousand accidents’ (cf. 1670, pp. 18–19) and then, the principle of social cohesion, the order produced by the incessant movement of a priori non-concordant elements. The poles of the social hierarchy are so many centres around which many individual interests circle, thereby forming whirlpools of matter, which are themselves influenced by other larger whirlpools. Nothing is so appropriate, to represent the spiritual world shaped by concupiscence, as the material world formed by nature, in other words, the assembly of bodies that make up the universe. For one sees that every particle of matter naturally tends to move, spread itself and leave its place, but being pressed in by other bodies, is reduced to a kind of prison from which it escapes as soon as it commands more power than the surrounding matter. This is the image of the constraint by which the self-love of each individual is reduced by that of the others, who do not allow it to move as freely as it desires. And in the consequences of this comparison all the other movements are represented. For, just as these small imprisoned bodies, joining together to unite their forces and movements, form great masses of matter called whirlpools, which are like states and kingdoms; and these whirlpools themselves being pressed and imprisoned by other whirlpools, like other neighbouring kingdoms, so that in each big whirlpool small whirlpools form, which follow the general movement of the large body directing them, but still with some individual movement of their own, and forcing other small bodies to turn around them; in the same way, the grand figures of a state follow the movement so much that their individual interests act as a centre for multitudes of people attached to their fortune. Finally, just as all these small bodies carried along by the whirlpools still turn around their own centre as much as they can, so the small ones, in all the duties and services they render others, following the fortune of the great people and the states, never cease to look after themselves and always have their own interest in sight. (1675, pp. 120–2)

22

The context (1)

Arnauld and Nicole’s Logique22 borrows from Descartes. In his attempt to classify and present civil laws (1689–94), Jean Domat wrote that one must return to first principles with the aid of reason, for ‘it is through these kinds of truths, so simple and obvious, that one arrives at the knowledge of those which are less so; and for the details of a science, they must all be collected to form the entire body composed of their assembly.’ Boisguilbert himself provides his own version of the first page of Discours de la méthode: one must . . . take a stand, there is no way of employing subterfuge, nor of using the excuse of ignorance in such matters. So long as he has common sense, every man is a competent judge, and cannot abstain from judging, on the pretext of a lack of illumination, without bad faith. (1707a, p. 883) However, the Jansenist authors’ contribution to the theory of society, and incidentally to political economy, cannot be reduced to superficial borrowings. The borrowings themselves were made possible by a problematic we must now examine. The consideration of this aspect is all the more important in that Boisguilbert was greatly inspired by it. VII The numerous allusions made to Jansenism so far, imply that the writings and positions adopted by the authors associated with it are not simply an essential element on which were based many theological discussions about grace in the post-Tridentine atmosphere of the Catholic Counter-Reformation. These discussions involved all aspects of social life and, at least in France, they were not limited to purely theological themes. The numerous schools of thought which accompanied this great renewal of spirituality in France were forced to articulate their attitude towards worldly life, power and society, at least to some extent. In all these debates, one name dominated the century more than ever before: Saint Augustine, the ‘doctor of grace’ whose important, protean work lent itself to many interpretations. Janssen, Saint-Cyran, Pascal, Arnauld and Nicole claim it, as do Bérulle, Bossuet and Fénelon. But it is especially the writings in which Saint Augustine paints a severe, pessimistic portrait of man without God and of the Terrestrial City which are of interest, for this was the view emphasised during the century and which pervaded the writings of many secular authors (La Bruyère, La Rochefoucault and Boileau, for example).23 The harshest and most pessimistic interpretation of Augustine’s works was accepted and accentuated by those Jansenists who, in the controversy with Molinism, lent on his writings against the Pelagians. Of course, Provinciales, which is in many ways a collective work by Pascal, Nicole and Domat, was a successful masterpiece. But the very success of

The context (1) 23 the positions adopted by the Jansenists, Saint-Cyran’s resistance to Richelieu, the sympathies of some Jansenist authors for the Fronde, the protection the movement later received from old members of the Fronde, or else – and perhaps above all – the general allure of the doctrine which is reminiscent of Calvinism,24 all aroused the constant distrust (or even open hostility) of the monarchy towards this mode of thought. Yet (and here I depart from the views of many commentators) there were perhaps no better theoreticians of absolutism and social conservatism. Even though on some points he modified the ideas of the intellectual trend of which he is a part, Boisguilbert is not an exception, and he certainly was not the revolutionary that posterity, in the nineteenth century, liked to imagine. Even in the seventeenth century Jansenism was not a monolithic entity. It entailed several different currents of thought which have now been studied in detail. Martin de Barcos and, after his ‘conversion’, Blaise Pascal represent the extremist position, preaching a total retreat from the world. Antoine Arnauld, Pierre Nicole and Jean Domat expressed a more moderate line of thought, an Augustinianism mixed with Thomism, without rejecting worldly life entirely. At the end of his life Nicole occasionally even collaborated with Bossuet, and his theory of ‘general grace’ was not always sympathetically received in the Port-Royal milieu.25 It was the moderate position, also illustrated by abbé Jacques-Joseph Duguet and Pasquier Quesnel, which developed themes concerned with society, political power and the organisation of the economy. Not that the views of these authors were homogenous or even concordant. But they do reflect a shared set of concerns, and they were distributed widely, as is shown by the numerous editions of Nicole’s Essais de morale (including De l’éducation d’un prince, 1670) and Duguet’s Institution d’un Prince (1739, written in 1699). For the present subject, however, Essais de morale will be the centre of attention, along with Domat’s Traité des lois (1689), Lois civiles dans leur ordre naturel (1689–94) and Droit public (1697). The other authors will only be called upon for complementary statements or as comparisons.26 VIII In order to characterise Nicole and Domat’s specific approaches to posing the problem of a study of social life, it may be helpful to return to the mechanical image of man and the fragility of this assembly constituted by a mass of ‘tubes’ and ‘springs’. ‘But what is this life on which he [man] is based, and what power has he to preserve it?’ Nicole asks. ‘It depends on a machine which is so delicate and composed of so many springs that instead of wondering at how it destroys itself, there is good reason to be amazed at how it survives even for a short time’ (1671, p. 14). The issue of social cohesion is posed in analogous terms: given the corrupted nature of men and their divergent interests, how can a society maintain

24

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itself and endure rather than immediately exploding into a thousand pieces in the most complete anarchy? The response to this question requires us to take into account the theological foundations of morals. At the base of all structures there is the dualistic Augustinian vision of man and religion: the Terrestrial City and the Heavenly City, Adam and Jesus Christ. ‘All Christian religion is based primarily on the state and person of two men . . . Adam, who is the principle of sin, and . . . Jesus Christ who is the principle of salvation’ (A. Singlin quoted by Taveneaux, 1973, p. 10). And this is the theme Pascal expanded upon in his Pensées. Before the Fall, man enjoyed perfect happiness. God was the object of his love; He provided the complete happiness of each person and was possessed by all. The original sin altered this situation; instead of loving God, man harboured an exclusive interest in himself (self-love, concupiscence) and his desire turned towards all earthly goods which could serve his voluptuous pleasure. Through this immoderate love of himself and his individual interests, he made material goods his divinity and, in his quest, he encountered the opposing desires of other men: having violated the first law, and having wandered from true happiness which he could find only in God, man sought it in sensible goods and discovered two failings contrary . . . to the two features of the sovereign good: one, that these goods could not be possessed by all; and the other, that they made no one happy. (J. Domat, 1689, p. 24) Domat claimed that this ‘derangement of love’ was the cause of the ‘derangement of society’. Thus, having placed other goods in the place of God, who should be his sole good, and who ought to cause his happiness, man made these material goods his sovereign good, in which he placed his love and established his beatitude, which is to make them his divinity; and it is thus by the estrangement from the only real good which ought to unite men that their lost wanderings in search of other goods divided them’. (ibid., p. 25) Self-love then rules as master: one sees ruling this other love, which is entirely contrary [to mutual love], whose character has justly given it the name of self-love, because he in whom this love dominates seeks only goods he can make his own, and he only loves in others what he can bring back to himself. (ibid.)

The context (1) 25 Words are never harsh enough to describe this situation, even if, compared to Nicole and Boisguilbert, Domat only makes very moderate use of them. ‘It is the venom of this love which numbs the heart of man . . . and . . . acts as a universal pest’ (ibid.).27 The result of the Fall therefore consists in a state of war of every man against the others.28 because the self-love of other men opposes itself to all our own desires. We want everyone to love us, admire us, bend before us and to be occupied solely by the care of satisfying us. Yet not only have they no desire to do so, they also find our claim ridiculous, and are ready to do everything, not only to prevent us from achieving our desires, but to subject us to theirs. This is how all men are at battle with one another. (P. Nicole, 1675, p. 116) There are many other important characteristics of the corrupt state. First, nature acts in such a way that man cannot live in self-sufficient isolation. Nicole, for example, emphasises the way men find it necessary to live together, whether they like it or not: they are linked to each other by an infinite number of needs, which necessarily force them to live in society, each one as an individual unable to live without the others; and this society conforms to God’s order, since it is to this end that He allows these needs. Thus everything necessary to maintaining it is found in this order, and in some senses God orders it through the natural law which obliges each part to conserve the whole. (1671, p. 321) Thus the problem of the existence and maintenance of social cohesion is fundamental. Second, the work which exists to satisfy needs is considered as a ‘general penitence’ which ‘God imposed on all men’ (1670, p. 412) and which no one ought to be able to avoid. Even if he recognised that man was nevertheless already commanded to work in the state of innocence before the Fall, Domat stresses that it then constituted ‘a pleasant, effortless occupation, without disgust or lassitude’, and specifies that ‘the work for which man now exerts himself is a penalty by which God punishes him’.29 Consequently, ‘the enormous vice of idleness and laziness’ is condemned severely since God desired that no man should have his bread without the sweat of his brow, and through the exercising of some occupation which justifies his nourishment, and He declares they who do not earn or merit their subsistence through some work are unworthy of eating. (1697, p. 236)

26

The context (1) These people were truly ‘worthy of death itself . . . if the justice due to them were not

reserved for another time with other punishments’ (ibid.). Domat declares that no one can avoid this rule without rebelling against ‘the natural law and the divine law’ (p. 237). ‘There is no condition, including the most elevated, whose essential character and whose principal and indispensable duty is not involvement in the work for which it was established’ (p. 236; my italics). Boisguilbert makes the same judgement, but omits the qualification emphasised in the above quotation; for would this not allow one to ‘sanctify’ all activities, including the mere managing of an inheritance, and to consider violations as being exceptional? The final characteristic of the corrupt state is, then, that not only is man pressed by needs, not only must he undertake arduous activity in order to satisfy them, but also that original sin multiplies his needs as if to ensnare fallen man even more, since it also ‘increased the need for work’ (1689, p. 25) and thus heightened the interdependence of men. In seeking to satisfy their indigence, they simply increase their needs and requirements, and consequently their weakness . . . He who needs many things . . . is a slave to many things, and is himself a servant to his servants for he depends more on them than they on him. Such that the increase in needs and honours of this world serves merely to augment servitude and dependency, thus reducing us to a more absolute poverty. (Nicole, 1671, pp. 56–7) Thus the terms of the question of the mere existence of society and social cohesion, are clearly stated: on the one hand, war of each against the other; on the other, a general interdependency. Society cannot be founded on perpetual violence and anarchy, and yet, while it is ‘absolutely necessary in order that the society of men survives, that they [men] love and respect each other’ (ibid., p. 231), in as much as concupiscence dictates precisely the opposite attitude this does not seem to be the case. Posed in this way, the problem seems to have no solution: At first one does not understand how societies, republics and kingdoms came to be formed from this crowd of people full of passions so contrary to union, and who tend only to destroy one another. (Nicole, 1675, p. 117) IX And yet there is a solution. It derives from the very source of the evils, for ‘self-love, which is the cause of this war, does know how to bring them [men] to live in peace’ (ibid.). Domat asserts that God allowed evil to occur only because He knew how to derive good from it:

The context (1) 27 from so evil a cause as our self-love, and from a poison so contrary to the mutual love which ought to be the foundation of society, God created one of the remedies which enable it to survive; for from the principle of division He constructed a link which unites all men in a thousand ways and which maintains most agreements. (Domat, 1689, p. 25) By what means? Through cunning. Seeing that he cannot make others concur by force without being damaged himself, man is compelled to respect certain rules of propriety and civility in order to achieve his ends: ‘in order to arrange everything, self-love adapts to everything; and it is so skilful in matching these different approaches to every perspective that it submits itself to every duty, to the point of counterfeiting all the virtues’ (ibid., p. 26). Here we recognise an application of the notion of ‘enlightened self-love’, so dear to Nicole. After the Fall, man nevertheless retains a spark of divinity in reason, ‘however blind and corrupted it is’ (Nicole, 1671, p. 42). Reason is his strength and can serve as a guide in life. ‘But how few are there who use it to this end?’ For the weakness of man is precisely this ‘inability of his will to conduct itself through reason’ (ibid.), and instead of strength weakness prevails. But seeing that he cannot satisfy the demands of his self-love with strength, man uses the remains of divine light to achieve his objective by means of a ruse of passion. We float on the sea of this world at the whim of our passions . . . like a vessel without a sail or a pilot: and it is not reason which uses the passions, but the passions which make use of reason to achieve their goals. (ibid., p. 43; my italics) Self-love therefore transforms itself into ‘enlightened self-love, which knows how to recognise its true interests’ (1675, p. 115). Men substitute force with artifice, and they find no other means than to attempt to appease the selflove of those they need, instead of tyrannising them. Some try to make themselves useful to its interests, others employ flattery to win it over. They give to receive. This is the source and foundation of all commerce between men, which is diversified in a thousand ways. (ibid., pp. 118–19) Enlightened self-love is no more than what is called ‘human honesty’, ‘an intelligent and more skilful self-love than what is common in the world, one which knows how to avoid that which impedes its plans, and which tends towards its goal, which is the esteem and love of men, through more skilled and reasonable means’ (ibid., pp. 126–7).

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As a result, the effects of charity and of enlightened self-love become indistinguishable (ibid., p. 114).30 In a famous passage, Nicole describes the resulting harmony for a state in the following terms: For example, when travelling in the country, we find men ready to serve those who pass by and who have lodgings ready to receive them almost everywhere. We dispose of their services as we wish. We command them; they obey. They believe that we are doing them the pleasure of accepting their services. They never excuse themselves from rendering us the assistance we ask of them. What could be more admirable than these people if they were acting from charity? It is cupidity which induces them to act, and which encourages them do so with such good grace that they willingly consider it a favour that we have employed them to render us these services. Think what charity would be required to build an entire house for another man, to furnish it, carpet it and hand him the key! Cupidity does this quite joyfully. What charity there is in going in search of medicines in the Indies, abasing oneself before the vilest ministries, and rendering others the lowliest and most arduous services! Cupidity accomplishes all this without complaint. (Nicole, 1670, pp. 204–5) This passage is taken up later by Boisguilbert and Smith:

all the commerce of the land, both wholesale and retail, and even agriculture, are governed by nothing other than the self-interest of the entrepreneurs, who have never considered rendering service nor obligating those with whom they contract through their commerce; and any innkeeper who sells wine to passers-by never intended to be useful to them, nor did the passers-by who stop with him ever travel for fear that his provisions would be wasted. It is this reciprocal utility which makes for the harmony of the world and maintains states; each man thinks of procuring the greatest degree of individual interest with the greatest ease possible, and when he travels to purchase a commodity four leagues from his home, it is because it is not sold three leagues away, or else that it is cheaper, which compensates for the longer journey.31 To return to Nicole, the impression received is ultimately that of a society which is perfectly self-regulated by the reason of its members,32 corrupted within, certainly, but with a generous, pacific and honest exterior appearance. Propelled by self-love which remains hidden from all; without charity, yet everything appears to come from charity. This is the work of Providence which Nicole never tires of admiring and whose effects he describes in detail.

The context (1) 29 X However, there are two important questions in relation to Boisguilbert’s reconsideration of this theme: first, the question of the originality of this conception at the time; second, the question of the adequacy of enlightened self-love in maintaining social cohesion, alone or otherwise. The first question may be answered fairly rapidly. The problem of a conflicting relation between reason33 and the passions certainly was not new. But for a long time the passions were considered as intrinsically bad, most often needing to be repressed by an external order. In the best instances, reason dominated the passions, but it was recognised that this situation was exceptional and beyond the ordinary man. To summarise, the novelty began with Machiavelli, in the domain of public actions, where an act was to be judged only by its effects. This involves a shift from the passions to interests.34 It was not, however, until the middle of the seventeenth century that this notion became generalised in the sphere of private interests. The idea according to which very different actions (derived from both the passions and reason) could be socially useful (and manipulable) was gradually established in a foreshadowing of utilitarianism.35 Theologians and authors such as Louis de la Forge, Cureau de la Chambre and Descartes all played a role in the development of the idea by which the passions became useful.36 But it was Senault’s book, De l’usage des passions (1641), which seemed to mark the most decisive stage. Yet, as N.O. Keohane (1980, p. 197) remarks, this was no more than a stage, in as much as in this author’s work there is still a need to tame the passions through reason and love of the public good. Consequently, this was only the final development of the theme of the use of the passions by reason. I therefore suggest that the originality of Nicole and the Jansenist authors was not to have taken this theme to its final stage of development, as N.O. Keohane argues, but rather, as Nicole37 himself stressed, to have inverted the terms to show the use of reason by the passions. Besides, the extreme form which Nicole attributed to the principle of enlightened self-love was far from being generally accepted at the time, even when the expression was used. This is the case for example with Malebranche, who defines enlightened self-love as self-love animated by charity, which is to return to Senault and Descartes. XI As far as the second question mentioned above is concerned, it is a matter of returning to the writings of Nicole and Domat. The stakes are high, for the typical example of enlightened self-love given by Nicole is market activity. And if enlightened self-love emerges spontaneously from the chaos and by itself suffices to maintain society, then would we not

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be dealing with the first appearance of an idea which is fundamental to political economy, underlying the liberal conception and the theory of general economic equilibrium? If this is not the case, in other words if ultimately this idea cannot be derived from Nicole and Domat’s writings, then the modifications later introduced by Boisguilbert could very well prove to be decisive. A reading of the texts tends to favour the second hypothesis. It is true that for a modern reader, and even more so for an economist, the somewhat emphatic passages examined above tend to focus attention on them alone. But one should not forget that in both Nicole and Domat’s work, they belong to a specifically defined context. How are societies formed? Through force rather than contract, despite a few ambiguous examples. Force implies domination, laws, repressive control. Here is the process as described by Nicole in the third volume of Essais de morale: he [man] enjoys domination, he enjoys subjugating everybody else, but better still he enjoys life, commodities and the comforts of life, more than domination; and he sees clearly that others are not at all disposed towards allowing him to dominate and are rather more ready to remove from him the possessions he most enjoys. Each individual therefore sees that he is powerless to succeed by force in the plans his ambition suggests to him, and he even comprehends correctly that by using violence he may lose the other essential goods he possesses. This is what forces him initially to limit himself to the care of his own preservation, and no other means of assuring this is to be found except that of uniting with other men to forcibly repel those who would steal our life or possessions from us. And to solidify this union, laws are made and punishments are ordered against those who violate them. Thus by the means of the wheel and the gibbet set up in common, the tyrannical thoughts and designs of each individual’s self-love are repressed. Thus the fear of death is the first link of civil society and the primary bridle upon self-love. (1675, pp. 117–18) It should be remarked here that for our present concern reference to Selden or Hobbes is not unavoidable. Jean Bodin himself opened up the way by declaring in Les Six Livres de la République: Reason and natural light lead us to believe that force and violence were the originating sources of republics. And even without reason, it will be shown hereafter by the indubitable testimonies of the most reputable historians . . . that the first men had no more honour or virtue than to kill, massacre, steal or enslave men. (Bodin, 1576, p. 69)

The context (1) 31 As a study of political literature shows, Bodin’s works dominated the thought of the period up until Montesquieu. And Jansenism did not escape this trend: Nicole defines the sovereignty of the prince by his power to make laws, and Domat founds his system of laws on the family, property, the state and the idea of justice.38 It is therefore firstly the political order which contains each and every individual within the confines of behaviour compatible with that of others. It is also the political order which obliges them to have recourse to the ruses of passion and which forces self-love to become enlightened. This is what is principally responsible for the present state of affairs; to it men owe their rest, security, protection and hence, all the advantages of commerce and industry. In a highly characteristic passage Nicole exclaims that it is an ‘admirable invention’. For even if there is nothing ‘from which one draws greater service than human cupidity itself’, nevertheless, this cupidity must be strongly forced to render these services, since, left to itself, this cupidity has neither limits nor measure. Instead of serving human society, it would destroy it. There is no excess it is not capable of when it is unbridled, since its inclination and tendency lead directly to theft, murder, injustice, and the greatest disturbances. It was therefore necessary to discover an art to regulate cupidity. This art is the political order which restrains it through fear of punishment, and applies it to objects useful to society. This order gives us merchants, doctors, artisans and generally everything which contributes to pleasures and provides for the necessities of life. Thus we have an obligation to those who conserve this order, that is, to those in whom resides the authority which regulates and maintains states. We would admire a man who had discovered the art of taming lions, bears, tigers and other wild animals, and brought them to serve the needs of life. Political order achieves this wonder; for men full of cupidity are worse than tigers, bears or lions. Each of them wishes to devour the others; and yet by means of laws and police, these ferocious beasts are so tamed that one draws from them all the human services one might draw from the greatest charity. Political order is an admirable invention discovered by men to procure to all individuals the commodities which not even the greatest kings could enjoy, no matter how many officers they have and however great their riches, if this order were to be destroyed. (1670, pp. 205–7) Thus political order is not everything, but it is the foundation of everything. In the following chapter, it remains to define its true nature in greater detail, for it was repressive and unequal. For the moment, the existence of other indispensable links for social cohesion should be emphasised, for the spiritual links of religion also play their part, as do the bonds

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of the proprieties and civility which avert collisions between individuals through the limits they impose on them in society. These many invisible but effective links serve to support, and soften, the repressive order. Beyond the constraints, or even bonds of friendship, society also needs this infinite number of ‘small, very human bonds’ which unify people, albeit unbeknown to them (cf. ibid., pp. 308–10; cf. also 1671, pp. 231–2).39 Jean Domat says no more than this; even more than Nicole, in the first pages of Traité des lois he gives the impression of basing everything upon enlightened self-love. However, he adds a few very clear remarks which show that this foundation is insufficient.40 According to him there are four other means which form the ‘natural foundations of order’: religion, ‘which is responsible for everything in the world which is regulated by the spirit of the first laws’; ‘God’s secret conducting of society throughout the entire universe’; ‘the authority God grants those in power’; and ‘the light which remained with man after the Fall, which enables him to know the natural rules of equity’ (1689, p. 26). The first and the third means concern the church and the state, destined to rule respectively over man’s ‘interior’ and ‘exterior’ (p. 29; cf. 1697, pp. 336–45). The fourth means, equity, emphasises true honesty and rectitude in uninterested conduct (1689, p. 27).41 XII On the other hand, the second means is more mysterious, though it is declared to be ‘a more essential and solid foundation’ (1689, p. 27). It is a matter of clarifying this point here. The analysis will not be modified fundamentally; however, it provides an occasion to define the meaning of the term ‘Providence’, which Boisguilbert uses in some decisive passages in his work. These passages run the risk of being sorely misinterpreted if one is unaware of the meaning implied by the vocabulary used at that time. What does Domat mean when he refers to ‘God’s secret conducting of society’? It is through His universal providence over mankind that He shares out land amongst men and differentiates the nations through the diversity of empires, kingdoms, republics and other states, that He regulates both their extent and duration through the events which endow them with their birth, progress and end, and that, amongst all these changes, He forms and supports civilised society in each state, through the distinctions He makes between people so as to fulfil all functions and positions, and through the other means by which He regulates everything. (ibid.) It is therefore a matter of the organising omnipresence of God and of the action of divine providence through the course of history and in the organisation of societies (this theme

The context (1) 33 intersects the other three means, particularly the third). Is this recourse to the hand of God in the history and organisation of society an evasion? Might it have been tempting for Domat to cover whatever he could not explain with a veil of mystery? But one should not be misled: although nowadays the words ‘providence’ and ‘providential’ are almost synonymous with ‘miracle’ and ‘miraculous’, this was not the case in seventeenth-century French. Of course these words contain this meaning, designating the direct and unforeseeable action of God, as the passage quoted above might suggest. But just as often (if not more often) they signify quite the opposite. In these cases, divine providence which regulates nature, society and history indicates the secondary causes by which the divinity acts. These secondary causes instituted at the beginning of the world are immutable laws which can be discovered by reason, through philosophic and scientific activity. This aspect emerges clearly in a text of Nicole’s, Des différentes manières dont on tente Dieu, included in volume 3 of the Essais de morale (1675, pp. 165–200). Whether He [God] chooses to make us live in this common manner, or whether He chooses to do so in an extraordinary and miraculous manner, it is always He who acts and supports us. And thus we are obliged to recognise His hand and His all-powerful actions equally, whether He hides it or unveils it. But there is nevertheless the following difference between these two manners in which He acts on bodies and souls: the first is the common path by which He directs His creatures, while the second is the extraordinary path He uses only occasionally, and which is without certain rules. The order of providence He enables men to know is the first, and the second contains only some effects we could never foresee by ourselves. (1675, p. 168) Consequently, when reference is made to providence in society or history, one must refer to the laws of history42 and to the laws governing the functioning of societies. It is important to emphasise that the Jansenist attitude of the authors cited, just like that of Boisguilbert, is in no sense fatalistic. Despite his ambiguous position in relation to science and scientific knowledge (Pascal is an almost caricatured example of a dualism of thought in this area), this attitude considers it impious to expect or to call for constant miracles; for this attitude, the only way to act is to discover secondary causes.43 ‘The holy doctrine teaches us that when we are able to employ human means, to neglect them is to tempt God.’ Passivity is unacceptable. Look at the work of Saint Augustine, says Nicole, arguing against the monks who refused to work because it was written that God feeds the birds. Likewise, the governor of a fortified town must put every effort into defending the town and not rest on the words of the Scriptures: ‘if God does not look after a town, in vain do we watch over it’ (ibid., pp. 170–1). This explains an engagement in the world.

2 The context (II) On some problems in the governing of an ordered state

I What features of political order are necessary to the maintenance of society? How does the conception proposed by the Jansenist authors examined here differ from contemporaneous or previous theories? These questions are essential. In answering them we shall develop new reference points which contribute to our understanding of Boisguilbert. The Jansenist view of the political body and the power of the grands is of a hierarchical and absolutist society: the organised nation. The members of a state each have a specific function, whose importance is dictated by their position in the political body. In this instance, it seems that the organic image is to be taken literally.1 The origin of political power is divine. Even if the people occasionally appear to participate in the choice of government or the form of the state, nevertheless authority derives from God. God did indeed give the people the power to choose a government. But just as the choice of those who elect the bishop is not what makes the bishop, and the pastoral authority of Jesus Christ must be communicated to the bishop through ordination; likewise it is not simply the consent of the people which makes kings: it is God’s communication of his royalty and power to them which establishes them as legitimate kings, and gives them a true right over their subjects. (Nicole, 1670, pp. 185–6) Consequently, legitimacy does not derive from the people, and we are not therefore dealing with the theory of a ‘double contract’ put forward by the monarchomaques a century earlier. ‘Grandeur is a participation of the power of God over men, which he communicates to some for the good of others’ (ibid., p. 184). Domat writes essentially the same as introduction to his entire rationalising system of laws and jurisprudence.2 In this context the political authority of the grands is just and cannot be contested. The choice taken by a people if God gives it the opportunity to do so is irreversible. Once the chosen order is instituted ‘it is not within the power of the people to change it. For the

The context (11) 35 authority to make laws no longer resides in the populace which has divested itself of it’ (Nicole, 1670, p. 186).3 All rebellion is therefore impious and contrary to natural law.4 Furthermore, it is wrong to believe that the form of the state is a matter of indifference for these authors. It is even surprising that they could have appeared to be dangerous republicans. Certainly, Domat seems to place kingdoms, republics5 and the ‘other states’ on a single level, and in Droit public he also declares that the government of republics does not harm the natural order; God is not opposed to it because not only has he never made a general law which commanded . . . monarchical governments exclusively for all states, but . . . he even approved those of republics, since he never brought any alteration to those he enlightened with the light of the Gospel. (1697, p. 14) But Nicole did not envisage the possibility of a hereditary monarchical state explicitly6 and Domat presents many good reasons proving the incontestable superiority of hereditary monarchy over all other forms of state (1697, pp. 5–14 in particular). It would therefore be wrong to read these authors as offering the seeds of contest to the French monarchy, or even of the form of government. Here again their considerations can only really be placed in a direct line descending from the absolutist theory of Bodin.7 It should also be remarked that Nicole and Domat distance themselves from Pascal’s pessimism and radical relativism, expressed in particular in his Trois discours de feu M. Pascal sur la condition des grands.8 Starting from his famous distinction between the grandeurs naturelles9 and the grandeurs d’établissement,10 Pascal maintained a marked indifference to all forms of power. ‘In one country one honours the nobles, in another the commoners; here the eldest, there the youngest. What was a matter of indifference before its establishment, afterwards becomes just because it is unjust to trouble it’ (Pascal, 1660, p. 367). Pascal continues by asserting that the grandeurs d’établissement were due only establishment respect, which is to say certain external ceremonies which reason dictates must nevertheless be accompanied by an inner recognition of the justice of this order; but these ceremonies should not make us believe in any real quality in those we honour thus. (ibid.) The grandeurs naturelles are due a natural respect which is the esteem due to the individual qualities of each man (or the scorn caused by their absence).11 Nicole and Domat12 do not only differ from Pascal on account of their preference for a particular form of state; they also harbour reservations about the previous remarks concerning the respect due to grandeurs d’établissement. Nicole, for example, fully admits the natural

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equality of men, and thus the fact that no intrinsic quality is honoured in the grands (1670, p. 362). But establishment respect cannot remain solely exterior, it must also derive from an inner movement, one which is more profound than a simple recognition by reason of a necessary state of affairs. In as much as the order created by God is honoured, submission has ‘as an object which is truly worthy of respect, which must not only be exterior, in other words, it must involve the recognition of a superiority and real grandeur in those who it honours in this matter.’ (ibid., p. 191). It is important to note all this for Boisguilbert’s attitude is dictated by similar considerations. Whether he was inspired by Pascal or Nicole, Boisguilbert remained strongly attached to the grandeurs d’établissement: his own behaviour in Rouen and the quarrels of precedence in which he was involved are an eloquent testimony to this (cf. J. Hecht, 1966a). He should be believed, and his sincerity should not be doubted, as it has been by commentators since Mirabeau, when he spoke favourably of men in power and showed them a deference which may indeed appear suspect in view of his denunciation of their policies. ‘I never forget the respect due to people of rank, either in my writings, or in my discourses, such that I have nothing to fear regarding this.’13 This was not a matter of political prudence. There are innumerable passages in which he excuses the king and ministers: they had been deceived, and were therefore unable to act any other way; ‘Messieurs les ministres’ always show ‘great integrity’, with nothing but ‘good intentions’, but they are constantly ‘surprised’.14 Incidentally, we return here to the theme of the governors’ information (see below, Chapter 5). However, it is important to underline the reasons for formulas which otherwise might appear as compromise or flattery, thus seeming to be in contradiction with the system. Thus the sense of the opening to the second Factum de la France is clarified: we shall begin by declaring that we have a very great respect for the people we are going to demonstrate have in point of fact always been mistaken – which in no way prejudices their integrity, of which we are entirely convinced – and we would even have employed more sympathetic expressions if we had been able to do so without betraying the cause of the King and the people, whose defence we have undertaken. Justice itself obliges us to say that, far from being reprehensible to have been so greatly mistaken, the ministers could not have done otherwise without a miracle, succeeding as they did subjects who gave them very poor examples, and who followed very defective paths; and far from being in a position to turn away from them, it can be said that everybody conspired to keep them on these tracks, having a greater interest in deceiving a minister in France, in ruining the King and the people, than in conquering an entire kingdom for the monarch, in whatever country it might be. (1707a, pp. 883–4)

The context (11) 37 II In the seventeenth century the political position of the Jansenist movement was thus essentially profoundly conservative and respectful of the established order. The turbulent areas of its thought were religious above all: the apparently anti-authoritarian economic or political writings merely revealed the inherent ambiguity of the very concept of ‘absolute monarchy’. Amongst the authors under consideration here, the issues may be summarised by the following fundamental equation: before the Fall, the state of innocence was a state of equality; after the Fall, corruption requires inequality. Nicole states this very clearly when he writes that grandeur is always at least an effect of the disorder of nature, and a necessary consequence of sin. For in the same way that the state of innocence could not accept inequality, the state of sin allows no equality . . . Not only does reason recognise that this subjugation of men to other men is inevitable, but also that it is necessary and useful. (1670, pp. 181–2) Domat’s ideal15 is also the ‘organised nation’: the Lois civiles dans leur ordre naturel, and the Droit public in particular, codify an existing state of affairs. In the midst of a few, rapidly neutralised, somewhat radical remarks in Droit public, status quo is assured through the affirmation of the hierarchy of conditions and professions and an ultimate justification of all privileges, precedence and other advantages of people or places. Initially, we have a functional image of the different ‘conditions and professions’ which form a state in which needs have been multiplied by the Fall. Each of them is supposed to be classed according to a decreasing order of social utility: just as in the body each member has its place proportional to its function, each person has their situation and order in society, according to their functions and duties which their public role demands. Thus, the different conditions and professions are termed the order of people [ordre de personnes], and it is this which, placing each in their own, and giving a rank to all, composes the general order. (1697, p. 169) Rank is determined by society’s need to be conserved as a whole (p. 181). Thus the ecclesiastics are in the first place, with the spiritual order preceding the temporal order. Within the temporal order, the classification begins with those in charge of maintaining peace (arms) and finishes with the farmers, passing successively through people participating in the acts of government in the kingdom, those who administer justice, those who watch over public goods such as roads, canals and ports, those who handle public finances, then those who are concerned with the liberal sciences (law, theology, medicine etc.), those who are responsible for the circulation of goods (trade) and finally the artisans (ibid., pp. 181–4 in particular).

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But the social utility of the conditions and professions coincides strangely with their traditional precedence in terms of dignity and honour (pp. 184–97), even if each of them includes many classes, thereby complicating the ordering.16 And ‘agriculture and other work on the land’ might very well be qualified as the ‘foundations of the most necessary help for all our needs’ (p. 184), of ‘prime necessity to the life of man’ (p. 194), as ‘the most natural professionals who, for this reason, in the first stages were the occupations of people even of the first rank, among those who God elevated to his knowledge and worship’; and it might very well be remarked that ‘agriculture was the work of man, even before the Fall’ and that after the ‘sin of Adam’, nobody accomplished the divine commandment of arduous work more correctly ‘than the shepherds and labourers’; nevertheless, this profession comes last in line in the order of dignities, as well as in social utility: ‘since this work is very difficult, and occupies the greatest number of men, distancing them from the use of ranks and precedence more than any other, those who exercise it are placed in the last rank’ (ibid.). The justification for this is slight. Thus the holistic point of view still dominates and it is ironic to note how much the authors of the first Jansenism, although they were in profound discord with their adversaries in the theological and occasionally political domain, prove to be very close to them through some significant aspects of their doctrine. Might one not think one was reading a passage from Fénelon’s recently written Télémaque ? III We encounter the same conservatism in relation to other economic questions frequently discussed in Droit public. This is the case for the grain trade, for example (pp. 145–9): the establishment of public granaries is justified by the current arguments. However, the analyses devoted to two important questions are symptomatic of Domat’s approach: those relating to the legitimacy of an interest rate (usury) and to the nature and modes of taxation. Starting with the question of usury, Domat immediately proceeds with the greatest rigourism. For him, a rate of interest is entirely illegitimate. The juridical, political and religious tradition had made many adjustments to this controversial dogma. In République Bodin condemned usury and rentes constituée, but he left aside all the traditional motives (the sterility of the money, etc.) to judge usury and rentes constituée solely according to their economic and social consequences, which were open to general observation: rapid fortunes, the lure of gain leading to an inevitable neglect of the prudent managing of a heritage or a ‘mechanical’ activity and causing financial ruin. Finally, while in Domat’s era the French Jansenists generally sided with the rigorous theologians, many of them adopted an original point of view: they recognise that no natural law argument, founded on reason, justifies the prohibition of interest loans. Only the religious duty of charity dictates this attitude, and in

The context (11) 39 general this is what must be observed.17 Domat therefore marks a retreat in relation to the position of his friends at Port-Royal since in the traditional manner he founds his reasoning on religious and natural law arguments.18 Domat’s treatment of the nature of tax and fiscal justice is equally revealing. Several passages in Droit public emphasise the need for a just tax system, one based on a tax levied on each head of family ‘in relation to his wealth and that of other families in the same place’19 (1697, p. 84). But in vain would one search for an echo of the discussions continuing for more than a century about the nature of tax, the basis of its assessment and the mode of its levying.20 As an absolutist jurist, Domat simply asserts that the right to levy tax is one of the attributes of the monarch’s sovereignty (pp. 35, 44, 78, for example). It is the subject’s duty to contribute to public expenses, while the sovereign must demonstrate ‘wise moderation’. All the exemptions linked to social hierarchy and the privileges of the different conditions and professions (and of towns and provinces) are observed and integrated within the system of law, thus justified de facto. He is in favour of fiscal justice, certainly, but only within the group of the taillables et corvéables, i.e. those due to pay the taille or contribute through the corvée. It is always the same leitmotiv: everyone must keep his place and rank which are marked by a range of external signs,21 ‘. . . it is for the public order of society, that nothing should be in disorder’. In this instance, Domat is therefore close to Pascal’s radicalism. He even justifies in the same way as Pascal, the idea of the loss of ranks and titles of nobility, both the robe and the sword, by involvement in trade. Boisguilbert’s attitude to the problem of usury as well as to that of taxation, is a total contrast. To my knowledge, he makes no judgement concerning the legitimacy or illegitimacy of the rate of interest: he observes its existence and, as an economist, he analyses its effects. On the other hand, the question of tax is one of his principal concerns and we shall examine the theoretical principles underlying his opinion on this subject; but the examination of the problem of the nature of the tax is included here and it is important to emphasise how markedly Boisguilbert departs from an extreme absolutist position like that of Nicole and Domat so as to introduce a return to the more moderate concept of J. Bodin. IV In a word,22 in Les Six Livres de la République the tax question suffers from a theoretical, if not a practical, contradiction.23 On the one hand, the right to levy taxes figures amongst the attributes of the sovereignty of the monarch. On the other, since a ‘royal monarchy’ (absolute monarchy) differs from ‘seigniorial monarchy’ (tyranny), the sovereignty of the monarch is

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limited by a few very general principles: respect for the law of God, for the fundamental laws of the kingdom (the inalienability of the domain, the Salic law, etc.); and for the private property of the subjects. And yet, to levy a tax is to attack private property, unless the subjects, or their representatives meeting together in the Estates General of the kingdom, agree to it. Hence the contradiction between the right to levy a tax, which is a simple aspect of ‘giving the law’ (a fundamental attribute of sovereignty, since sovereignty itself defines the state) and the principle of respect for private property upon which the just state rests (under threat of falling into anarchy or becoming a tyranny). From which derives the recurrent theme: the king must live from his domain. Nevertheless, the absolutist jurists (Loyseau, Le Bret) later emphasised exclusively the right to levy a tax, thereby avoiding the difficulty. Many times Boisguilbert stresses the fact that for the subjects, taxes are an obligation imposed by God himself,24 and with this in mind he confines himself to establishing a rule of justice which the prince must respect: A monarch must act towards his people as God declared that he will act towards Christians, which is to say, he will ask much of them who have much, and little from those who have little. (1707a, p. 941)25 On the other hand, Boisguilbert emphasises two important points. First, as we shall see later, Boisguilbert attributes the French monarchy with the image of a golden age, one which existed in the past, but which it is also possible to achieve again, with the king living from his domain and only exceptional taxes: but to return to the management and government of France during eleven hundred years, it can be confirmed that it was ruled, from its establishment until the death of François 1er, in 1547, like England and Holland, or rather like all the states in the world. The kings lived from and were magnificently supported by their domains alone, except on extraordinary occasions which arose, such as wars, for which their subjects gave all the necessary help. (1707a, p. 901) It was only in the unusual case of absolute necessity that the subjects ‘gave’ the king the help he needed. This helps define the meaning of the passages in which it is said that the tributs were a legitimate tax: they were legitimate, but perhaps only in these very specific situations. Consent goes without saying, but there must nevertheless be a consent; this was the attitude often adopted by deputies to the Estates General in the sixteenth century.

The context (11) 41 Second, it is precisely the beneficial role of the Estates General in the history of the French monarchy which was emphasised. When these met, ‘no monarchy, since the creation of the world, has endured so long nor flourished so greatly, having furnished the monarch’s needs three times more than . . . the partisans ever did even in the most urgent occasions, such as today’ (1707a, p. 917). In these few remarks there is something of an echo of Bodin, through the prism of later more rigid principles; there is no peremptory assertion, but there are suggestions of one. For the reference to the Estates General does not fit with the hard absolutist tradition derived from Loyseau and Le Bret; but it is also important not to overestimate this reference in as much as the remarks cited are from a context which deals with the theme of the information of governors. Only the function of communication of the Estates General, and after their ‘suppression’, of the parliaments, is emphasised. To our knowledge, no allusion is ever made to any power of decision. Boisguilbert therefore seems to be in the tradition of the Six Livres de la République. However, it is certain that he in no way participated in the parliamentarist political ideology which later flowered in the eighteenth century and to which a transformed Jansenism allied itself. This analysis is confirmed by what is said elsewhere concerning Church possessions. Evidently, Boisguilbert positions himself amongst those who, since the sixteenth century,26 considered that the large ecclesiastical possessions were indecent and against nature, and who thought that the Church could contribute more to the expenses of the state than it did presently. For Boisguilbert, Church possessions were usurped; it was only through blackmail and deception that it extorted the land and goods of individuals, and worse, of the Crown. The process is described in Détail de la France and in the second Factum de la France. For individuals, first, it is their vanity and pride still more than their piety which are caught in the trap. Ostentation is the basic motivation, and donations are made equivalent to celebrations and spectacles.27 Consequently individuals are impoverished, the rights of the king are neglected and state revenue suffers. Second, the donations extorted from the kings themselves had reduced the size of their domain, and thus, once again, their revenue: ‘Through surprises which are fairly wellknown, religion had given to it the greater part of these domains . . . because at that time ignorance was so great that almost no other form of piety was known except that of giving one’s land . . . to the Church’; and the Church even went so far as to give people the ‘dying absolution for having robbed the lands and forcefully removed them from the legitimate possessors only when a part of it was given to the ministers of religion’ (1707a, pp. 901–2). The result of these manoeuvres is clear: whether by means of private ostentation or through the shrinking of the public domain, the public revenue diminished and this was

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accentuated by the tax exemptions of the clergy. So far as we are concerned here, the essential point is the despoilment of the Crown: the kings could no longer live from their domain. Consequently, tax ceases to be extraordinary: The taille . . . only began to be ordinary in France from the time that the Church (under the pretext of devotion and pious foundations) so surprised the Kings and Princes that generally it had all their domains given to it. (1695, p. 591) Whatever its historical foundation, Boisguilbert’s position is therefore clear. It simultaneously conveys his conception of the nature of taxation and confirms the preceding analysis. The ordinary character of the taille is simply the outcome of a usurpation, a violence to the natural order. Once things were back in place, tax could become extraordinary again and the king would be able to live from his domain in times of peace. V It is possible to show the way in which the ideas presented in the previous paragraphs are rooted in tradition. First, the role of the Estates General as considered by Boisguilbert. Bodin too stressed the necessary existence of the ‘estates of people, bodies and colleges’, and viewed their meeting as being indispensable. But since the sovereignty of the king consisted in giving laws without his subjects’ consent, the estates in fact had no power of decision at all. This is what identifies the grandeur and majesty of a true sovereign Prince: when the estates of all the people are assembled, presenting requests and supplications to their Prince in all humility, with no power to command or award anything and without a deliberating voice; but what it pleases the King to consent to or dissent from, command or prohibit, is held as law, edict or order. Such that those who have written about the duty of the Magistrates, and other books of a similar nature, are mistaken in claiming that the estates of the people are greater than the Prince . . . if the King is neither captive, nor mad nor a child, there is no reason or foundation whatsoever for this opinion; for if the sovereign Prince is subject to the estates, he is neither Prince nor sovereign. (1576, pp. 137–8) But the estates and communities are the cement of a republic, which in matter of fact they organise. Also ‘just royalty has no more firm foundation than the estates of the people, bodies and colleges’:

The context (11) 43 for if he needs to levy deniers, assemble forces or maintain the state against enemies, this can only be done through the estates of the people . . . which fortify themselves for the tuition and defence of their Princes by being united together: and in the same way, when the Prince is present in the Estates General of all the subjects, then the affairs affecting the universal body of the Republic, and its members, are communicated; the just complaints and grievances of the poor subjects are said and heard; the petty thefts, embezzlements and stealing that is done under the names of the Princes who know nothing of it are discovered there. (ibid., p. 500) Next, the theory of sovereignty taken up by Nicole, Domat and Boisguilbert. Sovereignty comes from God, not from the people, and this is yet another reason to contrast the Jansenist tradition to the theoreticians of contract and natural law, despite some common vocabulary. In regard to this subject, we have seen Nicole’s clear remarks, which in fact are simply a return to the traditional position of the Catholic Church. As I have emphasised, this position accommodates different forms of the state; it should therefore be distinguished from the far more recent theory of the monarchy ‘by divine right’ (in the religious tradition, just as in Bodin’s juridical tradition, the choice of the monarchical, hereditary system is based on an entirely different series of considerations). Consequently, prudence is once again called for in the examination of the texts, and recourse to the history of ideas proves to be indispensable. The absolute monarchy is not, however, a tyranny; the authors of the Ancien Régime made the distinction between the government of the Grand Turk (seigniorial monarchy) and that of the kings of France (royal monarchy). But throughout its three centuries of existence, the status of the absolute, royal monarchy had never been clearly defined once and for all, as is demonstrated by the preceding analyses relating to the nature of taxation. And without the monarchical system itself being contested, its mode of functioning and its justifications varied. The ambiguity of this position appears in the writings considered here. What limits will the king’s power run up against, apart from the very general ‘fundamental laws of the kingdom’? How does the monarch make his decisions? Evidently these questions are incongruous for an ‘absolute’ power. Yet they were ceaselessly asked, more or less explicitly. The Jansenist movement answers these questions in the most traditional manner.28 If God confers the power, he can very well withdraw it if the beneficiary proves to be unworthy; this brings us back to the role of Providence in history, and to the notion of the evolution of empires. But he can equally well wait to punish the guilty one in another world: his vengeance will only be more terrible. God, as we have seen, regulates ‘the extent and duration’ of states, ‘granting them their birth, progress, end’ (Domat, 1689, p. 27). And as for the disadvantages which may occur under a monarchy through the faults of a prince, this is an effect of the providence of God which must be suffered, as in the case of the poor successes of the most just wars, and other scourges which come from

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In this perspective, the role of counsellor to the prince presents itself fully, as does the emphasis placed on the numerous obstacles which prevent truth from coming to the foot of the throne. Amongst the principal obstacles there are the courtesans and, perhaps, implicitly, absolutism itself. This theme was widely debated during the Ancien Régime. While in general the Jansenists preached passive obedience,29 many emphasised the obligation to inform the prince, whatever the cost, on condition of retaining the necessary respectful attitude towards public order (Richelieu also recognised the absolute necessity for frankness from the counsellors to the prince, but nevertheless this frankness was reserved for private interviews, and was to be formulated ‘with silken words’): Whatever reason one might have for complaining, it would be criminal to do so without respect for the person of the Prince; and it would still be so if however respectful the complaints were, they were visibly ill-founded. But when respect and truth are allied together, not only is it to obey one’s duty to the King to humbly present to him how he has been deceived; but it is to render him a very great service by teaching him to mistrust those who mislead him, giving him the means of repairing the evil which their surprises would have made him do.30 Thus the right to ‘remonstrate’ is perfectly legitimate, without binding the prince in any way. Only those whose interests are betrayed by divulging the truth are supposed to speak otherwise and, as Boisguilbert says on numerous occasions, ‘they only stubbornly deny seeing clearly in full daylight because shadows are extremely advantageous to them’ (1705c, p. 743): it is only flatterers, who are the pests of all courts, who give the name of rebellion to the very humble remonstrances of a subject who presents his reasons for not being able to fulfil the orders he is given because he finds them contrary to justice and equality.31 This is certainly an ancient theme. All those who had approached the king with a minimum of rectitude denounced the obstacle to all good information constituted by the court and its individual interests. Bodin speaks of ‘court bloodsuckers’ (1568, p. 121) and criticises the ‘appetite of the flatterers’. Richelieu, well versed in the matter, describes them

The context (11) 45 as ‘poison’ for the hearts of princes (1632-8, p. 274), ‘court pests’ (p. 428) or ‘public pests’ (p. 367).32 Boisguilbert repeats these descriptions, adding to them. For many pages he inveighs against the misleading ‘applause’ of ‘self-interested, flattering, ignorant subjects’ and he admits proudly that his own language ‘is hardly a courtesan’s tongue’ (1707a, p. 948). And he must also ceaselessly defend himself against accusations of wishing to ‘overthrow the state’ with seditious remarks.33 Besides, the context of his remarks emphasising the role of the Estates General, or if not the parliaments is one in which their sole function, by means of remonstrances, is to illuminate the decisions of the sovereign, not to take part in them. The remonstrances do not harm the authority of the king, in fact they safeguard of his wealth and power. It is under his authority that the provinces will remonstrate against the surprises of Messieurs les ministres, when ruinous edicts for the monarch and his subjects appear. (1706, p. 815) But in the end, however strong the vocation of these Gentlemen [the traitants, financiers, etc.] for their affairs, at the expense of the King and his people, it was still a far shot from their real goal; for while the will was always entirely there, the power was often lacking. The parliaments and companies retained the authority to make remonstrances towards institutions which would have been too great a prejudice to the King and his people. Here is the palladium or protective god which conserved France from the time of the suppression of the Estates General. (1707a, p. 917) Decadence resulted from the fact that the parliaments, which took over from the Estates General, had their right to remonstrate removed. It was therefore necessary to annul ‘the two articles of the ordinances of 1667 and 1673 which say that all edicts will be received and executed without the people’s remonstrations being heard, as had been the practice for twelve hundred years, which had maintained, helped to flourish and considerably increased the monarchy.’34 VI It is easy to see how the previous theme is attached to Jansenist doctrine. Not only through the duty of the subject responsible for ensuring that Providence be enabled to accomplish its work in the terrestrial city, but also because of the ‘commerce in self-love’ which forms society.

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Since everything here below is founded on masks and dissimulation; since cupidity appears as charity; since, to be effective and make itself heard, charity itself must bend to the appearances and common usages and sacrifice on the altar of civility, does this not inevitably result in a general problem of communication? In the search for truth, everything becomes an obstacle, including, and above all, language, since everything passes through it as intermediary. ‘Our failings are usually caused by our false judgements: our false judgements derive from our false impressions, and these false impressions come from the commerce we have with one another through language’ (Nicole, 1670, p. 331). Consequently, the traps to avoid increase: It is therefore necessary to convey to the person one is teaching not only the interest he has in protecting himself against the artificial deception of those who will try to surprise him, whether this deception is malicious or self-interested, but also from this other deception which may be termed of good faith which is communicated through the discourses of almost all those with whom he is obliged to live, who themselves being full of falsities which they do not know, unwittingly pass them on to the minds of others in conversation. (1670, pp. 24–5) The discourses of men are full of illusions and deceit. They praise what should be scorned and scorn what should be praised . . . And what is strange is that the discourses of men of goodwill are not exempt from this seduction since on many occasions they borrow the language of the world, and they are often even obliged to borrow it: for they would not be heard if their language were so different to that of others. (ibid.; pp. 342-3) We shall examine later the use Boisguilbert makes of this theme in economics. For the time being, it is easy to imagine the difficult position of princes in this world: ‘. . . usually their life is no more than a dream in which they see nothing but false objects and misleading phantoms’ (Nicole, ibid., p. 23). Of course, Boisguilbert adopts this approach35 and he even makes a rare joke in which ‘princes could barely learn anything perfectly other than horse riding because only beasts could contradict men of this type when they were mistaken’ (1705c, p. 792). With this theme of communication, information and language, we are therefore touching on a true dilemma which the moderate Jansenist authors had to resolve. They had to remain in the world, since a contrary attitude is proof of arrogance and even threatens to extinguish charity, since it would no longer have any reason to exercise itself. But nor was it a matter of remaining passive, but rather of working for religion and towards the good of the state and society.

The context (11) 47 But to whom should they speak? And what could they say that was convincing? ‘It is to wrong to claim that discourses contrary to natural inclinations and common impressions can have much effect’, P. Nicole noted bitterly (1670, non-paginated preface). And he added a few lines later: ‘It is already a great deal if this inclination can be moderated in a small number of people through the light of truth. The torrent of cupidity will always carry off all the others whatever efforts are made.’ One cannot therefore preach to the crowd: the effort would be needless, as well as being an act of insubordination towards the affairs of the state. Once again, it depends on the great of this world, and the first amongst them, the king. Since they are a model which the other orders of society try to imitate, and since the true decision-making power resides in them, they are the only ones worth the effort. On this point Jansenism is profoundly ‘elitist’. Nicole cannot help criticising ‘this mass of people who barely think, and who are concerned solely by the necessities of present day life’; they are so numerous ‘that the number of people whose minds are slightly more agitated and active is almost nil in comparison’ (1670, p. 39).36 But it is true, he adds, that rich and educated people also have more ‘malice’ in them, such that ‘there is still more real good in simple stupidity than in [an] . . . activity saturated with disguise and artifice’. Boisguilbert presents fairly similar remarks, without ever losing hope of achieving his goals. When he speaks (favourably) of les peuples, it is to designate the elite gathered together in the Estates General, or else the leaders of the different professions. On the contrary, le peuple designates a crowd similar to a herd, especially in regard to food: the people, who do not differ at all from beasts in general reasoning, and whose views do not extend beyond the personal and single interest of the moment, would find it difficult to understand these principles. (1704b, p. 840) the people is no doubt like a flock of sheep which one wishes to make enter by a very small, tight gate; it is only a matter of taking one or two by the ear and dragging them through forcefully, and immediately all the others will push through with the same violence it was necessary to use to direct the first two. And if there was a very large door right in front of them, leading to the same place, giving them easier access, even with forceful kicks it would not be possible to get them to take this course; rather [they] would keep stifling one another to follow the first. This is a portrait of the people and its conduct in these tumultuous processes, particularly in relation to grain. (1707a, p. 934) VII One last point. Supposing that one were in a position to convince them; how ought one to arrive at the truth in order to transmit it? In religion, the problem is relatively simple: religion

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is revealed and the scriptures are also commentated by the Fathers of the Church. There is, therefore, a tradition on which to stand. But what about law, economics and the organisation of society? Can one be satisfied with the many references to the role of reason scattered throughout the various texts? Apparently not, and on this point, like on the one concerning the contract, the authors remain apart from the theoretical ‘natural law’ movement developed in that era by foreign philosophers and jurisconsults. Here again, the French context is decisive, even if, ironically, Hobbes, Grotius and Locke lived in Paris and even published certain works there. This point of view is illustrated perfectly by Domat, who is more Thomist than Augustinian in this matter. In a letter to Brossette, Boileau37 correctly described Domat as ‘restorer of Reason in Jurisprudence’; to which Brossette responded equally correctly that Domat ‘allied natural law and positive law with great intelligence and method’.38 In terms of rights, what therefore are the natural or ‘immutable’ laws? They are those which are known through the help of what is left of the divine reason remaining in each of us: the love of God and of one’s neighbour are rules which necessarily flow from these first principles. And what are the positive or ‘arbitrary’ laws? They are the ones which are necessary for regulating certain practical difficulties caused by the application of the natural laws,39 or else by certain habits invented by men for reasons of propriety.40 But there is a continuity between these two types of laws, with the positive laws serving to define natural laws in their daily, ultimately inessential, applications: what does it matter the number of witnesses for a will or the precise age of civil majority for young people? These are merely conventions which in no way influence the validity of immutable laws; this is also why they cannot be known by reason, but can only be brought to the awareness of subjects by the sovereign. This is what B. Baudelot saw clearly as essential (1938, pp. 111–12, 120–3 and 188–9). Under the cover of a language shared with the great jurists of the time a very different reality is hidden. But if in his attempt Domat reveals his conservatism and speculative empiricism (the search for the rationality of a system of positive laws which are neither good nor bad in themselves leads him to ‘sanctify’ them, thereby justifying all existing order), this result is not inevitable, as the examples of Bodin and Boisguilbert clearly demonstrate. A degree of innovation is always possible, and the extent of the method depends on its use. In any case, the result of interest to us is that recourse to history is not foreign to the exercising of reason. It complements it and even helps it to avoid getting lost: ‘. . . there is no better rule to explain obscure or ambiguous laws than the manner in which custom and usage have interpreted them’, Domat comments; ‘one must presume that what has been observed for a long time is useful and just’. Reason and history are crutches which allow us to advance in the order of knowledge in spite of everything. It is therefore wrong to assert that ‘there are no doubt natural laws, but fine corrupted reason has corrupted everything’ (Pascal, Pensées, undated, p. 507). On this point, Pascal was censured by his friends: this thought does not figure in the Port-Royal edition.

The context (11) 49 We have already seen this method at work. Domat uses it to justify the existence of republics (as a form of state), in spite of his preferences. Bodin did likewise; in introducing Les Six Livres de la République he defends himself against the accusation of wishing to write one more utopia, a ‘Republic in ideas with no effect’ like that of Plato and More. ‘Actions and events are new in their individuality, but their types have always been as they are today’, E. de la Croix wrote in Le Nouveau Cynée (1623, p. 183). The same causes which conserved the monarchies previously still maintain them, just as they ruin themselves through the same means as in past times. It is lack of courage or extreme malice to see disorder without wishing to apply a remedy to it, and when an expedient is proposed, to claim that any reason is merely an old fashioned policy. Le Nouveau Cynée also includes other passages which could just as well have appeared in Boisguilbert’s writing: here we propose something which is not only possible, but also of which the ancients had experience. Under the empire of Augustus all nations were pacified. And during the reign of François 1er peace flourished throughout Europe for a few years. Who prevents us from hoping for a good enjoyed by previous centuries? I believe that there is nothing simpler than this matter, if the Christian Princes are willing to undertake it. (ibid., pp. viii-ix) In Boisguilbert’s writings and correspondence there is a similar accompanying leitmotiv. The use made of a simplified and idealised history of France has been shown in the examination of the question of the possessions of the Church and the role of the parliaments and Estates General.41 This history of France is omnipresent: it illustrates, proves, provokes thought, brings out the truth. Of course, the examples of England and Holland are also recurrent. But those of Sully and Richelieu, of François 1er and Henri IV play the same role even more often, with the three regencies42 and the ministers Mazarin and Colbert acting as the foil: ‘why go looking for examples of this conduct amongst foreigners, since in the history of France has what is needed to show that it too is in a position to employ it with similar advantages when it pleases?’ (1705b, p. 667). Hence the constant references to ancient edicts whereby it is simply a matter of ensuring their application, or at worst, perfecting them. This theme is as recurrent as any: ‘It is not a matter of abandoning one’s mind to inventing novelties for unknown taxes, but of stopping at the perfecting of the ancient taxes’ (1703a, p. 296). ‘One should not conclude any reasoning . . . except through practice and on the basis of facts which are constant amongst all nations’ (ibid., p. 295). Furthermore, from this last quotation it is clear that this reasoning is closely linked to another of Boisguilbert’s favourite themes: ‘practice’ versus ‘speculation’ (in other words,

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pure intellectual constructions, detached from reality). Speculation, when it is ‘entirely gratuitous is far removed from realities’ (1 November 1704), it gives rise to reasoning which is nothing but ‘hollow visions’ (1704d, p. 970); it ‘can never produce anything but monsters in the arts, which are learnt solely by practice’ (1707a, p. 887). Had not Sully restored ‘the state ruined by library people’ (1706, p. 812)? On the other hand, however, blind ‘practice’ obviously does not suffice: the good and the bad must still be determined. In short: ‘the lack of union between practice and speculation . . . gives birth only to monstrous ideas, to very imperfect objects’ (1704b, p. 853). Thus we can understand the rationality of the position asserted so many times by Boisguilbert, which commentators took to be a tactic to deal with the Controllers General, although in fact it was essential to his approach. This is another profound difference distinguishing Boisguilbert from the authors who were inspired by him in the eighteenth century. Speculation . . . my Lord, consists in working on projects formed in one’s head, which have never existed, and although when one has never seen anything of the like; while practice only imitates and conforms to that which is already established and followed through with success and the applause of the majority. Speculation promises and creates miracles from what it invents, but without any guarantee, knowing the uncertainty of the sciences, and consequently of theory; practice, on the other hand, means that its subjects would stake their lives on success, once they have attained the use of their art, and it is a market without fear. No sooner does speculation write down its dreams, than an infinite number of contradictions appear, battling with the new doctrine on paper . . . When practice writes, none oppose it and all the books which have been written on the arts are still without retort. (1 November 1704, p. 331) The importance attributed to history in this system also partly explains the accusation which is often addressed to the author of the Factum: that it implies a kind of compromise with power. Is not Boisguilbert conceding too much when, after having violently denounced the financiers and the traitants as the source of all the ills of the kingdom, he accepts that correction could be achieved without ruffling them? Indeed, on the one hand, no epithet is hard enough to describe their intrigues; on the other, ‘one will say that in order to achieve so great a good, one does not wish to bring any trouble to the present arrangement; it is not necessary to dismiss any fermier or receveur; and we shall have a tremendous respect for the fact of His Majesty . . .’ (1695, p. 626). It takes only ‘an instant’ to cause all the origins of evil to cease, ‘without dismissing either traitants, or fermiers ordinaires . . . although everybody agrees that the miserable situation in which the kingdom finds itself is due to the partisans’ (1705b, p. 664).43

The context (11) 51 On the one hand, having recourse to history establishes those who are guilty. But on the other hand, it is also a kind of historical perspective which dictates their partial impunity, and thus history intervenes in the wheels of the mechanism. The reversibility of effects is certainly possible here, but it requires time and one cannot upset such major government practices from one day to the next. For the present, then, there should be a partial maintenance of the fermiers: ‘in order not to impose too strongly upon the actors, we repeat . . . that not a single ordinary contractor will be dismissed; we will negotiate with them for only a few gentle changes, with their consent’ (1707a, p. 907); ‘although it is not necessary to abolish . . . the fermiers of the King, though this would be the greatest service one could ever offer the state . . . their functions must be reduced to a less dismal role, which far from being damaging, would in fact be useful to them’ (1707a, p. 927). In the long term, however, progressive abolition is both conceivable and desirable. Boisguilbert’s attitude here is based on Richelieu, whose Testament politique, published in Holland in 1688,44 in all likelihood he had read. The cardinal too had a tenacious hatred of the financiers and the partisans (1632–8, p. 250). It would be easy, he declared, ‘in a time of secure peace, to remove many officers of this type, and by this means to deliver the state from those who, without rendering it any service, draw its substance from it in a short time’ (p. 252). The treaties passed with these veritable ‘bloodsuckers’ are ‘a remedy worse than the evil since, in truth, it gives them a right to steal once again’ (ibid.). However, on this point Richelieu adopts the same position of prudent pragmatism which he took in relation to the question of the abolition of venality and the inheritance of charges, the lowering of tailles, etc. The financiers harm the state, ‘but are nevertheless necessary’. They are an evil, but ‘one which one cannot do without . . . which must be reduced to reasonable terms’ (p. 250). Why is this? Some abuses must be suffered for fear of provoking more dangerous consequences. Time and opportunity will open the eyes of those in a future century to initiate usefully that which one would not dare undertake in this one without imprudently exposing the state to unsettling disturbances. (p. 239) At the beginning when a republic is established everything is possible, and it is possible then to dictate laws in conformity with reason. ‘But prudence does not allow us to act in the same way in an ancient monarchy, whose imperfections have become habit and whose disorder is a part of the order of the state, and not without its own utility’ (p. 234). Political prudence and the necessities of public order all encourage moderation: the disorders, which were established by public requirements, and which were fortified by reasons of state, can only be reformed over time. People must be corrected gently and one must not go suddenly from one extreme to another.

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The context (11) An architect who, through the excellence of his art, corrects the faults of an ancient building and who reduces it to a reasonable symmetry without knocking it down, deserves far more praise than one who destroys it entirely and constructs a new, perfectly accomplished edifice. (pp. 236–7) Richelieu’s reasoning concerned the more general question of the venality of offices, but

he nevertheless applied it to this case of the traitants. Boisguilbert may have been inspired by him;45 we have seen how sensitive the Jansenist tradition was to the maintenance of legal order. But he also had a specific reason for acting as he did: his theoretical framework brought to light some phenomena of absolute irreversibility linked to the corrupted nature of man. His attitude does not therefore reflect a compromise; rather, at worst, it expresses a tension between his mechanical conception of society and his Augustinian opinions which stressed the irremediable fact of ‘Adam’s sin’. VIII We are reaching a clearer definition of Boisguilbert’s philosophical and political thought. Its contours will remain rather blurred, however, until its theoretical developments in political economy have been examined. Nevertheless, the main themes should now be apparent. To complete this analysis, it remains to clarify certain aspects of the political philosophy developed by Boisguilbert and the Jansenist authors. For the moment we will allow a question to remain concerning the agreement of these authors’ opinions on all the points raised, since it is already evident that there is no complete concordance. As has been indicated, in many respects Boisguilbert’s theoretical roots dig much deeper into the past, escaping the layer produced by Nicole, Pascal and Domat. Despite this fact, for the moment it is helpful to return again to his conception of social order. Of course the principles are affirmed once again. But why does Boisguilbert state that the monarchy attained its highest degree of splendour under François 1er and Louis XIV? It is understandable that the reign of François 1er should act as a model for him, but the characteristics of this reign were inverted under Louis XIV. It is here that Boisguilbert somewhat forgets his hatred for Colbert and agrees with an aspect of his thought: the grandeur of a state is also the absence of anarchy or civil war. Now, before the king was ‘the absolute master that he is today’ (1705c, p. 759) anarchy and civil war reigned. The kingdom had to be unified and pacified, and the absolute monarch guarantees this union. Before all this, instead of working towards the common good, all these preeminences were involved one against the other, working towards their own destruction, either

The context (11) 53 through an anarchy which divided the kingdom into fifty badly joined pieces, or through civil wars or wars of religion which divided the people, or, lastly, through minorities which exhausted the strength of royal authority. (ibid., pp. 758–9) Boisguilbert adopted a position on two other points as well: the absolute monarchy is not a tyranny (‘neither authority nor favour dispense anybody whatsoever from obeying the laws of justice and reason’ 1707b, p. 1012), and if order is necessary, it is purely in the Pascalian sense (as said against Nicole): ‘It is certain and generally known that qualities and rank do not designate the faculties of a man any more than his height or the colour of his hair’ (1707a, p. 942). Furthermore, we have seen what he thought about the nature of tax, and the role of the Estates General. These two issues now require a precision: so far as the first is concerned, the passages claiming that the king must consider himself the sole proprietor of the land of the kingdom require explanation; and as for the second, a remark made twice in relation to a matter of an exemplary economic policy must be explained: ‘This doctrine is so well conceived in England and Holland, where the people decide their fate entirely’ (1705f, p. 395); ‘in all the countries in the world where the humble folk have a part in government’ (1705c, p. 708). Let us start with the last point. Is Boisguilbert proposing the English or Dutch system as a model for the form of the state? This approach would go against all his other declarations. But it should be remarked that Rome (ancient and modern) and Turkey are also included amongst ‘all the nations in the world’ cited with praise (ibid., p. 707). It seems, therefore, that the reference to the ‘people [who] decide their fate entirely’ is confined to observing a fact without necessarily proposing it as a model; and is probably linked to the function of information which the Estates General or the parliaments of France were invested with when a similar policy was applied in the past. The problem of the property of the land is more easily resolved. Boisguilbert asserts that one must stop opposing the interests of the king to those of his subjects: in the means, ordinary and extraordinary, which are employed to find money for the king, France is considered as an enemy country in regard to the prince, or one which will never be seen again, in which it is not extraordinary at all that a house of ten thousand écus is destroyed and taken apart to sell twenty or thirty pistoles of lead firewood . . . [The prince] must not consider his Estates any differently than if all the land belonged to him, as in Turkey, and his subjects were simply farmers. (1695, pp. 641–2)

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Or else: ‘it is necessary that the King consider France and all its riches as belonging to him alone, as if all the proprietors were just farmers; that thus everything which hinders them in their labouring, trade and exchanges is the same as if the damage were done to him personally’ (1707a, p. 951). Are we shifting over to the opposite excess here, to the annihilation of private property and thus to tyranny, just as in Turkey? It seems that this is not the case. Here, it is obviously a simple metaphor intended to strike the reader, to emphasise the agreement of interests and the suicidal nature of the policy Boisguilbert fought against. But even if this is not the case, private property would not, for all that, be under threat, since taxation alone is concerned here, and we have seen that Boisguilbert declared taxation to be just if circumstances demanded it for the maintenance of the sovereign and the state. The term ‘property’, like that of ‘private’, are not therefore related to the modern meanings which they did not yet have at the time, but rather to an ‘incomplete’ property which was always burdened with certain feudal rights which are emphasised by historians nowadays.46 This was the conception presented by Louis XIV himself in his Mémoires pour l’instruction du Dauphin:

kings are absolute lords and naturally have full and free disposition of all goods, both secular and ecclesiastical to use them . . . according to the needs of their state . . . These mysterious names of franchise and liberty of the Church, with which they may perhaps attempt to dazzle you, also relate to the faithful, be they lay or tonsured, who are equally all sons of a common mother, but which exempt neither the one nor the other from subjection to the sovereign.47

The image therefore relates to the absolutist conception of taxation, disguised by ancient practices. It already figured, for example, in Scipion de Gramont’s writings (which Boisguilbert was inspired by) and also reflects in his work a curious mixture of archaism (the kings really possessed all the lands, acquired by conquest, and entrusted them to the subjects to make use of them) and modernism (tax is simply the just counterpart, the price as one might say, of the public services rendered by the state).48 There is therefore nothing which ought to surprise us in the remarks of the Détail and of the Factum de la France.

The context (11) 55 IX However, one general question remains unanswered: just what is this grandeur which the Jansenists tell us is so necessary and whose invention is so admirable? Are we still within the traditional order of affairs inherited from the seigniorial system, or can we discern an evolution beneath this concept which would allow us to better situate the Jansenist authors on the sociopolitical scene? The fundamental fact seems to reside in a purely functional conception of grandeur. We have seen that Nicole defined it as ‘a participation of the power of God among men’. Domat proposed an equally functional definition (although it is ambiguous) of the different ‘conditions and professions’. Of course, Nicole speaks of ‘the education of a prince’, Duguet of ‘the institution of a prince’, and Pascal wrote for the son of the Duke of Luynes. But ‘to be born illustrious and of quality according to men, is to be born of important people in the order of the world’ (Nicole, 1670, p. 361) and we have been told what is to be thought of the grandeurs d’établissement, though there are nuances of opinion amongst the authors on this subject. The grands are thus all those who participate in power: the whole of the high aristocracy ‘by birth’, but also the nobility of the sword in general, and the robe. From this point of view, Jansenism might perhaps simply be a new type of expression of the gentry of the sixteenth and seventeenth centuries; this has been very well described in regard to the sixteenth century by G. Huppert (1977),49 as marking an ambition which was always blocked by the mentalities of the era, but which was no longer a stranger to the interests of the monarchy. B. Chedozeau (1978, p. 105) notes that Nicole never speaks directly of the nobility, but in the treatise Des dangers des entretiens des hommes, he destroys its two foundations: ‘quality’ and ‘valour’, the bases of the noble warrior order. Quality is withdrawn in the manner we know; as for military valour, it is treated like any other ‘worldly’ quality, and is totally devalued: it is a pure passion in the same way as the rest, a ridiculous vanity.50 A hierarchy of cogs and a mechanisms of functions replaces the hierarchy of orders, qualities and ‘natural places’. Domat remarked on this in passing and attempted to refute objections. Is the reader of Droit public surprised that the hierarchy of ‘conditions and professions’ (the new ‘orders’) and their subdivisions (the ‘classes’) is not based on the ‘ordinary distinction’ of three orders ‘which are commonly called the three estates of the clergy, the nobility and the third estate’? It is because this distinction is not useful for the purposes of this book. For, firstly, it is necessary to give a more specific idea of the different conditions than those offered by the very

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The context (11) general distinction of the three estates; and secondly, if this distinction were accepted, in the third estate it would imply a confusion of the highest magistrates of the kingdom, several officers of the counsel, and other people who ought to hold a distinguished rank. (1697, p. 170) This is certainly not equivocal. But, on the other hand, it does induce a certain ambiguity:

as we have seen, in spite of everything, participation in power requires certain abilities, while the notion of social order excludes merit a priori (‘he is the eldest son of the King: this is clear’). The thought of these authors does not go as far as La Bruyère’s radicalism.51 Nevertheless, a tension is to be found in it between ability and authority, between the grandeurs naturelles and the grandeurs d’établissement whose disjunction is ultimately not self-evident. The trend towards function and this tension in the heart of power are not, however, specific to Jansenist thought. It seems that they were the common lot of thought at the time and they appear to reflect only the ambiguity of the status of the absolute monarchy. In this regard, the apparent evolution from Richelieu to Louis XIV is symptomatic. Without returning to the issue of the information of governors, let us consider the question of the orders. Richelieu participated in the aristocratic reaction. His intention was to reserve the first places and honours for his ‘poor nobility’. He revolted against the rapid rise and pretensions of an enriched bourgeoisie, the social crossbreeds who formed the robe. There are ‘natural places’; and it is up to each individual to respect them (1632-8, pp. 256–7): I present this fact boldly because it is as important as it is just to stop the course of the enterprises of certain officers who, filled with pride, either on account of the great possessions they own, or the authority they are given by the employment of their charges, are presumptuous enough to wish to hold the first place where they only have right to the third, which is so greatly against reason and the good of your service that it is absolutely necessary to stop the course of such undertakings, since otherwise France will no longer be what it has been or what it should be, but only a monstrous Body which, as such, would have neither substance nor duration. On the other hand, however, the cardinal saw very clearly that all out-of-date social rigidity is damaging to the state. This is shown in his resistance to the idea of being deprived of ranks and titles by involvement in trade, and these few remarks in relation to merchants:

The context (11) 57 If . . . Your Majesty is in favour of according a few prerogatives to exchange, giving a rank to merchants, in the place which now your subjects hold solely from various offices, which are of no use except in supporting their idleness and flattering their wives, it will re-establish commerce to the point that the public and individual will receive great advantage from it. (ibid., p. 425) What are these prerogatives? Richelieu does not specify them. From Richelieu to Louis XIV however, the scenario evolved. ‘Those involved in the occupation of arms are neither more obliged nor more useful in service . . . than the rest of the subjects’, remarked Louis XIV. Each profession contributes to the support of the monarchy. The labourer provides . . . food for the whole of this large body; with his industry the artisan gives all the objects serving the uses of the public; and the merchant assembles . . . everything useful and pleasant produced in the entire world . . . by collecting the public deniers, the financiers serve the subsistence of the state; by applying the laws, the judges maintain security amongst men; and by instructing the people in religion, the clergy attract the blessings of heaven and ensure peace on earth. This is why, far from scorning any of these conditions, or favouring one at the expense of another, our duty is to a be the common father to them all. Here we are, then, at Domat’s ‘conditions and professions’ and back to the meaning of his juridical work (which, moreover, was ordered by Louis XIV), which confirms once again that it is necessary to examine very carefully any claim which is formulated too rapidly regarding a possible ‘subversive’ or ‘revolutionary’ note in the Augustinian political thought of the seventeenth century.

3 Equilibrium (I) The social classes approach: from the ‘state of innocence’ to the ‘polished and magnificent state’

I Boisguilbert’s thought develops within a specifically French framework, not so much on account of the themes considered as his particular treatment of them. For while the legacy is imposing, the heirs are numerous: Locke himself was interested enough in Nicole to translate several of his essays.1 Nicole’s thought and the Jansenist tradition it represents influenced Anglo-Saxon intellectual developments, through the works of Bernard de Mandeville.2 There is nothing extraordinary in the fact that Boisguilbert was inspired by them as well; what is far more exceptional is the transformation he introduced to their thought. On most of the points that we shall be considering, Mandeville, who is usually strongly emphasised, remains very much in the background. In the context of a rigorous Augustinian perspective, Boisguilbert’s silences are as eloquent as the untimely stands he took. He hardly mentions feudal rights and in vain one would search his work for a theory of the ‘organised nation’ or an apology of luxury, honours, precedence and ‘outward signs’. The state is no longer confused with the nation and the marked hierarchy with the king at the summit no longer acts as the social cement. The state, authority and the grands acquire a relative autonomy in relation to society, an autonomy which, moreover, is dangerous to the prosperity of this society. Although they are still necessary, the ‘political order’ and ‘entirely human little bonds’ which were so dear to Nicole are lost in the distance. From now on it is the economic order which dominates. There is no doubt that Boisguilbert was the executor of a heritage, but he was original, and was therefore unfaithful to it. Economic matters did not interest Jansenist authors very much. Nicole makes a few remarks; there are some developments in Domat’s work,3 but only within the context of his juridical analyses of the social order. Only Duguet appears to expand somewhat more on the economic organisation of society, albeit in a relatively traditional manner; his approach is a kind of Colbertism strongly tinged with Christian agrarianism4 (‘The maxim that trade must be free, is only half true’). As L. Rothkrug has shown (1965), agrarianism was in vogue in this era under the influence, particularly, of Claude Fleury and Fénelon. But, it must be said

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that it was an idealised, almost bucolic, agrarianism; a fantasy in which enemy brothers would finally be re-united. It is true that one theme appears to be important in Fénelon’s writing, namely the freedom of trade, which he emphasised many times over; but, as Boisguilbert might have said, this ‘freedom’ was only an illusory decor, and it would be wrong to see the archbishop of Cambrai as an advocate of free trade. One may therefore measure by comparison the full extent of achievement and rupture accomplished by Boisguilbert. Other authors at the time might perhaps have been able to bring about this theoretical break. Belesbat,5 for example, to whom attention was drawn by A. Schatz and R. Caillemer (1906) and confirmed by Rothkrug (1965, pp. 328–51). Many of his writings6 pre-date the publication of Détail de la France, and certain similarities between the works are troubling:7 the same admiration for Holland, the same image of the proprietor-king, the emphasis on interests and utility, and the attention paid to the issue of the clergy’s possessions. Above all, it also includes a critique of Colbert’s administration, and of interventionist policy in general, with the corruption of man’s heart and mind dooming all action to inefficiency and disorder: In [my reflections] over the last thirty years on the souls of most of the men that I have known . . . having examined them in detail, I have found nothing but weakness and mediocrity in all cases; and those in whom certain aspects were superior to the others had faults to counter-balance their excellent qualities; their passions and failings almost always triumph over their virtues because the qualities of men’s minds often depend on the arrangement of the organs in their bodies . . . The interests of ministers, their assistants and agents consist in being absolute masters in their departments, conducting them in accordance with their fantasies and employing only those who are entirely dependent upon them . . . in order that, being restrained by nothing, they are able to pursue their affairs with more certainty in the disorder and confusion.8 Finally there is the same emphasis on the necessity for laisser-faire: It should be posited as a principle that freedom is the soul of trade, and that without it good ports, large rivers and great fertility are useless. When freedom is lacking, everything is lacking. (ibid., p. 630) However, all this appeared within a fairly untheoretical framework which was dominated by current politics: the plea to put an end to wars, the aristocratic reaction, etc.; in a word, everything linking Belesbat with Fénelon’s group. Furthermore, considerable restrictions on the principles of freedom are scattered throughout the texts (for example in relation to the

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grain trade), and too many traditional ideas remain (regarding precious metals, the population . . .) to form a framework which is either theoretically coherent or truly innovative;9 hence the vague term of liberal mercantilism forged by Schatz and Caillemer to designate this ‘system’. II In the economic domain, Boisguilbert’s writings are often compared to those of Vauban and Fénelon. However, the analogies made between them are superficial, although they must be analysed briefly. The common achievement of these different authors was to have criticised the administration of the kingdom under Louis XIV at about the same time, and to have described the great poverty of the people.10 But as a matter of fact their criticisms emerged from radically different approaches and concerns. As readers of Vauban have noted (in particular J.-B.M. Vignes, 1909 and L. Rothkrug, 1965) in relation to most of his principles, this author remains what is traditionally termed a ‘mercantilist’. Other than this, he was greatly inspired by the Traité de la Politique de la France published by Hay du Châtelet in 1669, a work which was re-published many times (lastly in 1689, as annex to Richelieu’s Testament politique). Marshal Vauban’s merit is no less great, and all this in no way detracts from the force of his convictions and the personal weight he respectfully placed in the service of critique and opposition. In any case, a careful reading would not confuse Vauban and Boisguilbert’s systems, unless it was misled by the first pages (but only the first pages) of Project d’une Dîme Royale which in citing the Détail de la France11 occasionally adopts an emphasis reminiscent of Boisguilbert. It is true that Boisguilbert himself caused confusion by publishing an edition of his works in 1707 under the title Testament politique de M. de Vauban. But in general people in the know were not misled by such manoeuvres. It was even less pardonable to be mistaken given that several times Boisguilbert criticises Vauban’s project, sometimes very violently.12 Of the group of taxes forming Vauban’s project of the Dîme Royale (royal tithe), like most the authors after him, Boisguilbert considered only the tax in kind of the (approximate) dixième of the harvest, based on the ecclesiastic dîme. He emphasises repeatedly that a tax in kind is an economic absurdity, and he identifies many faults in it which he summarised in a short Mémoire sur la Dîme Royale (1700) which he sent, along with an accompanying letter, to the Controller General of Finances on June 13, 1700. The question is too well known today for it to be usefully reconsidered here (cf. Vignes, for example, 1909, pp. 9–16 and 31–2). It will simply be remarked that in addition to his solid economic arguments, Boisguilbert takes up his favourite theme again (‘speculation’ engenders only ‘monstrous ideas’) and even tries to disqualify the project by claiming that Vauban is only a figurehead

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and that the work is in fact the work of one of Vauban’s collaborators, the abbé Ragot de Beaumont, ‘a priest with a very ambiguous life . . . ’ (to the Controller General, 21 August 1709). The short treatise and Boisguilbert’s letters were not published, but in other works several precise echoes of these discussions are to be found. A tenth ought to be paid in money, not in kind or in the dîme royale, as was proposed to the King by a person of the highest consideration – as much by his own merit as by the elevation of his employment – who placed his faith in an individual who compiled the project without ever having practised either trade or agriculture. This approach can give birth only to monsters. (1707a, p. 945)13 III The contrast with Fénelon is still more striking, despite some shared themes, such as the ‘flatterers’ and ‘courtesans’, and hence the information of governors. Fénelon’s principles concerning life in society are contained in Les Aventures de Télémaque (1699) and summarised in the various texts gathered together and re-published in 1920 under the title of Écrits et Lettres politiques, in which they appear to be more ‘concrete’ since they are applied to the specific case of France. Nevertheless, they are purely political and do not present a theory of the economic functioning of a decentralised society. On the contrary, in some respects Fénelon takes the opposite view to Boisguilbert by asserting the primacy of social organisation over the individual and his interests. But while holism still dominates in Nicole and Domat, Fénelon’s system has a radically different moral and theological foundation: his doctrine of ‘pure love’ is contrasted to that of ‘self-love’, even when it is enlightened. In this respect, he is close to Pascal.14 Of course this does not mean that the system presented in Télémaque is of no interest. But for our concerns, it is only a utopia, in the best tradition of the genre. One must therefore take care not to be misled by words, and particularly by the frequent use of the expression ‘freedom of trade’, which Fénelon appears to call for. To our knowledge (but the literature on Fénelon is vast15), only Roland Mousnier (1951–2) has drawn attention recently to the inconsistency of some of Fénelon’s ideas when they are reimmersed in their context. This is precisely the case with the ‘freedom of trade’. Through (or thanks to) the antiquated aspects of the aristocratic reaction, the archbishop of Cambrai might perhaps have played a decisive role in terms of liberalism (D. Richet, 1973), but on condition that it is qualified as political liberalism. Unless the mere presence of the expression ‘freedom of trade’ in the

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writings of this leading man did in fact suffice to stir up minds without provoking a more indepth examination of its real significance. But true liberals such as J.-B. Say,16 for example, were not deceived by it. To reconstruct this meaning, let us consider a few decisive pages in the Aventures de Télémaque, where Fénelon analyses the necessary conditions for prosperity in two large cities, Tyr and Salente. The wealth of Tyr is enviable and trade flourishes. What policies must be instituted to achieve this? The confidence of foreigners must never be upset, nor ‘the rules of free trade ever so slightly’ (1699, p. 111). ‘Especially, never attempt to hinder commerce in order to direct it according to your wishes. The prince should never involve himself in it, for fear of hindering it, and he should leave all profit to his subjects, who took the trouble for it’ (ibid.). ‘Trade is like some springs: if you try to alter their course, you cause them to dry up. Only profit and commodiousness will draw foreigners to you’ (ibid., pp. 111–12). Yet, within this framework, and even in Tyr, the system requires virtuous men, without ‘division’ or ‘jealousy’, without ‘voluptuousness’ or ‘idleness’, and ‘the negligence or splendid excess of the merchants, who ruin trade by ruining the men who run it’ are punished (ibid., p. 111); and at this point the regulations emerge which develop in Salente according to Mentor’s plans. In this ideal city, the economy is in fact strictly controlled. For the seven hierarchical classes of citizens (plus that of the slaves), Mentor ‘regulated the clothing, food, furniture, the grandeur and ornamentation of the houses, for all the different conditions’ (ibid., pp. 277–8). Even the colour of clothing is pre-determined, for frugality and simplicity must reign throughout: luxury is banished. This is not the return to nature represented by Bétique (just as Boisguilbert is not advocating a return to a state of ‘innocence’) but it is not far from it. ‘Like a skilful gardener cutting off the useless wood from his fruit trees, Mentor attempted to cut back the useless pomp which corrupted mores; he brought everything back to a noble and frugal simplicity. He even regulated the food of citizens and slaves’ (ibid., p. 279). With this goal, and for the good ordering of society, not only must urbanism and in particular the distribution of land be regulated, but Mentor goes as far as ‘to remove a considerable number of merchants who were selling cloth made in far away countries, embroidery at excessive prices, gold and silver vases with figures of gods, men and animals, and finally, liqueurs and perfumes. He even wanted the furniture in each house to be simple and made so as to last for a long time’ (ibid., pp. 281–2). And what was the result for the inhabitants of Salente? ‘The laws which we have now established’, declares Mentor, echoing Plato, ‘. . . will make their life laborious; and in their plenty, they will have only what is necessary because we will remove all the arts providing the superfluous . . . In truth, they will have bread, copiously; but they will have only the bread and fruits of their own earth, won by the sweat of their brow’ (ibid., p. 286).

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In this context, is there even any place, not just for free trade, but for any trade at all? What is left to exchange? Fénelon gives no details. He simply asserts that trade would prosper under these conditions. This remark is highly ironic given the description of Salente which he gave elsewhere! Thus the people soon rushed there in a crowd from all over. Trade in this town was like the ebb and flow of the sea. Treasures entered there like the waves pile up one on another. Everything was brought there and everything left it freely. (ibid., p. 277) If we discretely omit to ask about the nature of these ‘treasures’ and ‘everything’ which causes such flourishing trade, the problem of ‘freedom’ remains. On this point, Fénelon’s remarks are in the same vein: ‘Furthermore, freedom of trade was complete’ (ibid.). And there follows a few decisive ‘proofs’ of this: [Mentor] went to visit the port and boarded each vessel. He was informed of the countries to which each vessel went for trade: what commodities it carried there, what it carried on the return; the expenses of the vessel during the sailing; the loans which the merchants made one another; the societies they created amongst themselves, to determine whether they were equitable and respected faithfully; and finally, the dangers of shipwreck and the other misfortunes of trade, so as to prevent the ruin of merchants, who, in their cupidity, often undertake affairs beyond their abilities. He wanted all bankruptcies to be punished severely, because those without bad faith are rarely without recklessness. At the same time he instituted regulations so that it was easy to avoid bankruptcy: he established magistrates to whom merchants gave an account of their possessions, profits, expenditure and undertakings. They were never allowed to risk the possessions of others, and could risk only half of their own. Furthermore, undertakings which they could not honour alone were made collectively in societies, and the police of these societies was inviolable on account of the rigorous penalties imposed on those who did not obey. (ibid., pp. 276–7) Anybody would recognise therefore that, apart from this small inquisitorial regime, ‘freedom of trade was complete’ and that it was very likely to attract to Salente all that the vast world has to offer in terms of merchants, who would come to exchange ‘everything’! IV Boisguilbert’s theory contains two approaches to economic equilibrium: one emphasises social classes (the productive class and the leisure class), the other, an aggregate structure of

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five markets. It would be tempting to say that the first is also based on micro-economic foundations in as far as the productive class is concerned, representing a kind of general economic equilibrium, while the second, based on the same principles, reflects a macroeconomic perspective. Though not wrong, this comparison is nevertheless imprecise given that the first type of equilibrium is composed of general equilibrium and macro-economics in as much as it reflects the precarious harmony of two groups of radically different agents with strongly differing behaviour. In order to show this, we shall consider the two perspectives successively, devoting this section to the social groups approach. This approach is itself cleft in two: after the analysis of the properties of the ‘state of innocence’ there will follow an analysis of the ‘polished and magnificent state’. As in the Augustinian tradition, Boisguilbert places the Fall of man and its negative consequences for life in society at the base of his system. But unlike Nicole and Domat, the ‘state of innocence’ he describes does not designate earthly paradise, that is, a ‘social’ state before the Fall, but rather the one which immediately followed the Fall. Hence this ‘state of innocence’, or ‘childhood of the world’, is a ‘corrupt’ state, but assumes this designation in as much as it is a state of peace and co-operation, with a set of characteristics which makes it appear as simple and happy compared to the ‘polished and magnificent’ state which ensued. This state of peace is not troubled by any class distinctions; equality reigns amongst men. Everyone is involved in productive activities: labour is the general rule, in accordance with the divine condemnation. God’s condemnation of all men in the person of the first man, who, after his sin, was no longer able to live or survive except through the sweat and toil of his body, was applied only literally so long as the innocence of the world lasted, which is to say, as long as there were no differences in conditions and states. Each subject was his own valet and master and enjoyed the riches and treasures of the earth in proportion to his personal talent in bringing them to bear. All ambition and luxury was confined to procuring food and clothing for oneself. The first two labourers in the world . . . shared these two occupations: one ploughed the earth for grain and the other fed the herds to clothe himself, and their mutual exchanges enabled them to enjoy each other’s labour reciprocally. (1707b, p. 979) The restricted number of needs gave rise to a limited quantity of goods, the ones which are essential to conserving life, namely food and clothing. They form the wealth in this state of innocence ‘according to the laws of nature’ which in the context of this last description can very well be termed the ‘natural state’ in the original sense of the term: it takes a lot for it to suffice, to be rich, to possess a large domain and a great quantity of precious metals, which only enable their owner to perish miserably when the one

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is not cultivated at all and the other cannot be exchanged for the immediate needs of life, such as food and clothing, which no one can do without. These alone are what should be called wealth, and that is the name given to them by the Creator when, after having created the first man, He put him in possession of them. Gold and silver did not receive the title of opulence, since they only came into use long afterwards; that is to say, they were not introduced so long as at least innocence, following the laws of nature, existed amongst the inhabitants of the earth, and it was the stages in the demeaning of this disposition which increased general poverty. (1707b, p. 974) Boisguilbert remarks that the state of nature lasted for a long time: following the example of the ‘two children of Adam’, ‘for a long time those who came after them were masters and valets, the constructors of their own needs’ (1707a, p. 888). Because of the slight number of needs there were few occupations, and barter prevailed everywhere: ‘In the childhood of the world . . . the needs of life’ were limited ‘to three or four professions, and since all professions were virtually equal, trade took place from hand to hand, without the ministry of tokens or estimates which exist nowadays’ (1704d, p. 965). The emphasis on occupations and bartering is important, for the natural state is not a state of self-sufficiency. Exchange and co-operation are necessary and are included in the divine laws of nature. Isolation is as impracticable for a simple mortal as it is for a country. The abilities of humans are limited and are insufficient for procuring even the most essential required goods, even in a favourable environment. A man on his own in an immense domain would be very miserable and would no doubt prefer ‘the condition of a beggar in an inhabited world’. Those who think that the possession of land alone makes them rich are mistaken, Boisguilbert continues: For, firstly, besides the fact that they themselves would have to be meet all their needs themselves, far from serving their senses through this, it would be a real achievement if, through constant labour, they even managed to provide themselves with the bare necessities; and then, at the slightest difficulty, they would perish for lack of help, or rather, from despair. (1707b, p. 973) So it is also for any given country, despite a few traditional comments to the contrary.17 For, just as traditionally nature guards and distributes its blessings unevenly in order to prevent the self-sufficiency of nations and force them into trade: Nature loves all men equally and wants them to survive without distinction. Now, since in this manna which is grain, nature is not always as liberal in one land as in

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Equilibrium (1) another, granting it profusely in one country, or even a kingdom, while depriving another almost entirely, it intends the compensation for reciprocal utility to occur through mutual aid. (1707b, p. 994)

In the same way, when he discusses precious metals and the countries with mines, Boisguilbert comments that in fact these countries possess nothing else and absolutely must have recourse to exchange; this is the only case where gold and silver are principles of wealth. In Peru specie ‘which originate from there, are the sole and unique principle of subsistence’ (1707b, p. 990). Money ‘is a principle of wealth only in Peru because it is the sole fruit of the country there,18 which far from being worthy of envy, feeds inhabitants very poorly’ (ibid., p. 1010). V The ‘polished and magnificent’ state19 which emerges from a rupture with the primitive state of peace, follows the state of innocence. Violence results in the appearance of different social groups. The law of labour is no longer respected and the initial equality is replaced by the inequality of conditions. But in time crime and violence established themselves, the strongest man wanted to do nothing and to enjoy the fruits of the labour of the weakest, rebelling entirely against the Creator’s orders. This corruption became so excessive that today men are divided entirely into two classes: one which does nothing and enjoys every pleasure, and the other which labours from morning until night for its bare necessities, of which it is often entirely deprived. (1707b, p. 979) In as much as the working-class is productive, the leisure class lives from its rents. Of course the two classes are not homogenous. The leisure class is formed of ‘those who have no function other than that of receiving’ (1707a, p. 881), and is defined by including the different categories of rentiers: ‘everyone who is not a labourer or tradesman, in other words, high society’ (ibid., p. 882). The working-class, for which Boisguilbert claims to be the ‘advocate’, and even the ‘ambassador’, is ‘all that involves labourers and merchants in the kingdom, which is to say . . . all those who are the source and principle of all the state’s wealth, in relation to the King as much as to the people’ (ibid., p. 881). The working-class is also a composite category, as will be shown in greater detail below.20 The leisure class is therefore constituted by ‘rebelling’ against the Creator. Its legitimacy is perhaps political, but it is not ‘natural’, nor economic, that is founded on labour and

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accumulation. Boisguilbert states clearly that nature’s first intention ‘is that all men should live comfortably from their labour or from that of their ancestors’ (1707b, p. 992), but the emphasis of the labour of the ‘ancestors’ is not a natural legitimisation of rents. Instead it concerns the accumulation belonging to the farmer or tradesman (artisan), allowing its owner to be an entrepreneur and to make use of the services of salaried labour. The context of the citation is the proof of this, for it establishes the principle ‘that each trade must nourish its master’. The ‘ancestors’ were therefore primarily members of the productive class. The wealth of the leisure class is not for all that illegitimate, but the preceding chapter indicates that it is legitimate only in the ‘first intention’ of society, not naturally. In strictly economic terms, the existence of a leisure class also has important consequences. First, needs, and therefore goods and professions, are considerably increased so as to satisfy ‘the senses, which the corruption of the heart invents and refines every day’: ‘But since corruption, violence and voluptuousness are involved, after needs [i.e. the immediate needs necessary to life], the delightful and superfluous are sought . . . gradually multiplying these trades from the initial two to the more than two hundred which exist in France today’ (1707a, p. 888). From which emerge simultaneously: 1.

An extension of the definition of wealth in regard to its definition in the state of innocence: ‘true wealth [is] . . . the full enjoyment, not only of the needs of life, but even of all superfluities and everything liable to please the senses, which the corruption of the heart invents and refines every day’ (1707b, p. 985).

2.

The appearance of a hierarchy in human needs, extending from the most necessary to the entirely superfluous, and hence also for trades: these ‘two hundred professions’ begin ‘with the most necessary, such as the baker and the tailor’ and end ‘with the actor, which is the last work of luxury and the highest mark of an excess of the superfluous’ (ibid., p. 988).21

3.

And obviously the increase in general interdependence and the need for trade.22 The landed proprietors, for example, appear to be rich and powerful because they own the means of subsistence. However, they are ‘on the contrary, only the agents and makers of all the other professions’ (1707b, p. 989), for while the shoe-maker cannot live without bread, the landowner ‘cannot walk without shoes’. The principle of the solidarity of the professions is thus naturally extended to the conditions. Providence willed that in France the rich and the poor be reciprocally necessary to each other for survival. The first [estate] would perish with all its faculties and possessions, which are originally nothing but the land . . . They would perish, I say, if the other estate, the poor one, did not lend it its arms to help farm these possessions;

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Equilibrium (1) as, reciprocally . . . all those with no funds would be in no state to survive; and thus it is in the interest of these two estates to be in perpetual trade. (1704b, p. 834)

However, the consequences of the establishment of a leisure class through violence have not yet all been listed. Three principles must still be established, concerning the appearance of a ratchet effect in the hierarchy of goods and professions; the institution of money; and the idea of an economic circuit grafting itself on to the structure of the general interdependence amongst the occupations. VI 1.

First of all, the ratchet effect. The hierarchy of needs and professions is natural; it stretches from the bodily necessary to the superfluous, and, as will be shown later, plays a large role in the propagation of economic depressions. The ratchet effect does not therefore come into play in the natural hierarchy, for this always exists; rather, it concerns the interdependence of the professions, and designates a social process. Once a profession has appeared, it contributes essentially to general expenditure and to the maintenance of demand, and hence the other professions. It therefore becomes as necessary as the first ones to the overall prosperity.

The two hundred professions which are nowadays found in the composition of a polished and opulent state, starting with bakers and finishing with actors, for the most part, are initially only called upon one after the other by voluptuous desires; but since no sooner have they been introduced and taken root than they are then part of the substance of a state, they cannot be disconnected or separated without immediately altering the entire body. They are all necessary, right down . . . to the very least, like the Emperor Augustus, of whom it was said very correctly that he ought never to havebeen born, or ought never to die. (1707b, p. 986; cf. also p. 988)

2.

These remarks are obviously of great importance for an analysis of the appearance and consequences of economic disequilibrium (see below, Chapter 6). An equally essential consequence of the appearance of a leisure class is the institution of money. The division of society into two groups did not immediately cause the abandonment of barter. In Mémoire sur les Aides Boisguilbert remarks that gold and silver,

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after several centuries in which people did without them, were called upon only as auxiliary troops to put in place a sort of economy of tokens and balances in the labyrinth of purchases, sales and re-sales of an infinite quantity of commodities which the corruption of the heart had invented and multiplied every day, establishing them as necessities. (1704a, p. 47)

This quotation reflects the traditional idea of the increasing difficulty in bartering as needs multiply. The institution of a money results from a convention to palliate these difficulties, and originally it was solely a matter of introducing a unit of value and a simple means of circulation, a ‘guarantee at the most, of exchange and the reciprocal tradition’ (1707b, p. 976): ‘Since the seller of any commodity very rarely trades with a person who possesses the object he intends to procure for himself by letting go of his commodity’ he can only ‘obtain [the desired object] after a long journey and an infinite number of sales and re-sales one after another, through the medium of these two hundred hands or professions’. a guarantee and proxy carrier was required from the first buyer that the seller’s intention would be achieved through obtaining the item sought in letting go of his own. In this way the service of money became necessary, through a convention and the general consent of all men in all countries . . . that he who carries money is assured of procuring the equivalent amount of the item that he needs as of that which he sold, and that it would be delivered with as much diligence and precision as if the exchange and the barter had taken place immediately from one hand to another, as in the beginning of the world .(1707a, pp. 888–9)

3.

Boisguilbert’s originality consists in linking the monetisation of the economy with the appearance of classes and the resultant phenomenon of unclear information (see Chapter 5). Finally, the idea of an economic circuit has often interested commentators.23 And yet until now only the notion of generalised interdependence was considered. Do the two concepts really exist in Boisguilbert’s work, and if so, how exactly are they expressed? This matter cannot be discussed in detail until the analysis of economic equilibrium and disequilibrium is complete. But at this point it is possible to suggest the basis of a comparison. Boisguilbert mentions two types of ‘circuit’: a natural one referring to the process of appearance of the professions, which later gives way to general equilibrium but reclaims its rights in times of economic crisis; and a social one, relating to the circulation of income between the leisure class and the rest of the economy. Thus one circuit makes no reference to the social structure, since it concerns only the

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Equilibrium (1) inter-sectoral relations of the productive system, while in the other circuit, the division of society into classes is the basis of the analysis. However, the two conceptions are not independent of one another. In what follows we shall see that the origin of economic disruptions which upset equilibrium, provoking economic crises, spill over effects and consequently the propagation of disequilibrium from one sector to another (the first type of circuit), resides in this binary social structure (the second type of circuit). The first circuit, which is natural and historical, requires us to reflect on the hierarchy of needs and professions. Now, the basic needs of life find satisfaction in agriculture (food, clothing); consequently, a level of productivity on land is indispensable for the birth and maintenance of the other activities and, furthermore, for the initial act of violence founding the separation of classes to take place. all these various degrees [from the necessary to the superfluous], which are found not only in eating, but also in clothing, furniture, equipages, spectacles and in all the rest of what is called magnificence . . . are born every day in the fruits of the earth, which, should it become as sterile as the sands of Africa, would cause the loss of more than one hundred and seventy of these two hundred professions. (1704b, p. 837; cf. also 1707b, p. 988)

Of course this phenomenon is economically irreversible; once productivity has increased, there is no reason for it to disappear, except for a dramatic climatic change, a sudden exhaustion of the soil or a break in social organisation. Which means that the first kind of circuit, that of the professions, is only a circuit historically, but that once the movement has started, the maintenance of agriculture depends as much on the other professions as the other professions depend on it. All that can be said is that an unnatural shock would have more rapid and visible effects on economic equilibrium if it impacted, for example, on farmers rather than actors. But agriculture is not excluded from the general rule of interdependence and does not cancel out the ratchet effect. The following passage should be understood in these terms: As this product [grain] leads all the others, which, so to speak, follow it every inch of the way, difficulties for it . . . immediately upset all the other professions, sinking them on the spot. (1707a, p. 896) In other words, agriculture only comes to the fore in times of crisis, in the interplay of contraction mechanisms in which the order of needs has a major role. Non-agricultural goods are initially born and maintained by the fruits of the earth, since they are entirely unknown where nothing grows, as on sands or rocks. But it is only on this first occasion that this obligation is given to them freely, for immediately afterwards, these . . . other goods must give back the being to the fruits from which they originate and

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this circulation must never be interrupted for a single moment, because the slightest cessation is immediately fatal to both parties, from whichever one it originates. (1704b, p. 830) Consequently, as far as the wealth of the nation is concerned, agriculture is placed on the same footing as other productive activities: ‘these two breasts for the whole republic, agriculture and trade’ (1695, p. 624); ‘properly speaking . . . the wealth of a kingdom consists in its soil and trade’ (ibid., p. 587). And hence also the fact that ‘a kingdom such as France is a general market for all sorts of produce’ (1705b, p. 683), by which the economy’s structure of general equilibrium is clearly confirmed. All other citations in favour of the idea of a circuit-based economic structure in fact refer to the second kind of circuit: the income circuit introduced by the social phenomenon of the existence and ascendancy of the leisure class. In effect this class seizes the rents without providing any compensation at all: It is the fruits of the earth, and in the first place the grain and the liqueurs which start the movement. Passing through the channel of the masters and owners to the hands of the labourers, in exchange they [the labourers] give the fruit of their labour. (1707a, p. 920; cf. also 1704d, p. 967) The monopolisation of the agricultural surplus by the leisure class is a fundamental fact. To put it briefly, the economic structure shifts from a model of ‘general equilibrium’ to a ‘circuit’, with one class being fed without giving anything in exchange, or by merely ceding a right over a good which was usurped by violence, in return for compensation. In other words, the circuit of the rentier class, which includes the state institutions, grafts itself ‘artificially’ onto the general equilibrium structure of the activities of the productive class. As will be shown later, most social ills derive from the existence of this circuit and the phenomenon it reflects: ‘the process deals with the labourers and the merchants, from whom alone all sorts of payments depart as much towards the prince as to the land owners, and those who have no other function than to receive’ (1707a, p. 881). VII Although it will not be emphasised for the moment, in as much as it requires a preliminary analysis of economic equilibrium and disequilibrium, a distinction must now be introduced. The ‘polished and magnificent’ state may find itself in two different situations: a state of ‘opulence’ or prosperity and a state of economic crisis and depression. The state of opulence may be considered as a state of ‘optimal’ equilibrium, employing resources and men fully. It corresponds to a specific pricing situation whereby ‘proportionate prices’ (Chapter 4, below) establish general equilibrium. Contrary to this, the degenerate

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state occurs when this situation is not respected. It is a state of economic crisis and enduring depression, an equilibrium of under-employment, causing cyclical phenomena in economic activity (the analysis of long term trends and short term fluctuations are not separated here). It is important to note that Boisguilbert also calls this prosperous state of opulence the ‘natural state’ (giving a second meaning to the term). The expression ‘natural state’ therefore designates the state of innocence implicitly and, explicitly, the polished and magnificent state in a state of opulence (optimal equilibrium). The first, the innocence of the world ‘according to the laws of nature’ (1707b, p. 974) acts as a reference for the second: both are corrupt, but one less so than the other. The second is also a reference in relation to the degenerate state into which it can be pushed. It is therefore important to recognise the double referent. Neglect of this distinction has led some commentators to believe that Boisguilbert was advocating a return to the state of innocence when he claimed that it was easy to ‘re-establish [France] in its natural state’(1797a, p. 956), or to return ‘things to a natural state, as they were before’ (1695, p. 582): hence the accusations of incoherence or, at best, a utopia. As a good Augustinian, Boisguilbert emphasises the depraved and corrupt nature of men too often to claim any such thing. He simply proposed the best arrangement for the actual state, in order for men to live less miserably; the situation as ‘it was before’ refers to the golden ages of the monarchy (the reigns of François I, Henri IV and even Louis XIII) where a state of opulence was supposed to have prevailed. So what is the function of the distinction between the state of innocence and the polished and magnificent state? We shall see that the first natural state is indeed a reference for the second, but that its function is purely theoretical and analytic, and not a model to attain or a period to return to. Furthermore, this is supported by an earlier remark that Boisguilbert’s state of innocence is not the one discussed by the Jansenists, but rather an intermediary state somewhere between the innocence and the social state described by Pascal, Nicole and Domat. Finally, it is also interesting to note that this intermediary state of a pacific society without classes after the Fall does not appear in Boisguilbert’s first work, Le Détail de la France. It only appears explicitly later on, like the analysis (which is linked to it) of the emergence of money as a consequence of the leisure class. Indeed, the Détail only alludes to the ‘beginning of the world’ (1695, p. 618), in which bartering reigned. Thus, on this particular point, Boisguilbert’s thought appears to have evolved.24

4 Equilibrium (II) The market approach: the foundations of equilibrium and of free trade

I Apart from the approach discussed in the last chapter, the question of economic equilibrium is understood in another complementary sense by Boisguilbert. A close reading enables one to distinguish a formulation of an economic structure aggregated in five markets. This structure will now be presented; the issue of the connections between the two models will be considered later. First of all we must dispel the fallacious impression that Boisguilbert accounts for just two types of commodities, and therefore only two markets, namely agricultural goods, and all the rest. This erroneous image is put forward by authors emphasising the circuit (in the second sense of the term) and who confuse the structure of social classes with the structure of markets. Another confusion must also be avoided, which is the merging of the different markets (forming the macro-economic model) and the agents’ sources of income, which Boisguilbert attempts to classify on several occasions, in particular in the Détail de la France (1695), Traité de la nature, culture, commerce et intérêt des grains (1704b) and Mémoire sur l’assiette de la taille et de la capitation (1705b). Boisguilbert does indeed speak of biens in these works, but we are familiar with his frequent substitution of bien and revenu, and it is therefore important to be very attentive on this point. Let us first of all examine the question of income. The classification system is very variable, sometimes distinguishing two, and at other times three or four categories. The Détail de la France begins by making a distinction between two types of income: the revenus des fonds and the revenus d’industrie; we read that ‘all the biens of France are divided into two types, biens en fonds and biens de revenus d’industrie’ (1695, p. 583). The category of fonds which on first glance appears to be heterogeneous, jumbling together land rent, revenu des charges and certain tolls, etc.,1 is nevertheless logical in that the assets at the origin of these revenus compose what we shall later call ‘investment goods’. However, earlier in the work, Boisguilbert wrote:

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Equilibrium (11) Four sorts of people are interested in the situation we propose, namely, labourers, artisans or those who live from their industry, the bourgeois in the free towns, and finally the countryside nobles and privileged in the pays d’aide. (p. 635)

Unless I am mistaken, and though it is specified that they form ‘the largest body’, the labourers are the landholders, farmers and sharecroppers. According to the correspondences which are established (p. 636), the ‘artisans or those who live from their industry’ refers to the manoeuvriers (labourers), i.e. the agricultural workers; and, from the context, this also appears to include the workers in the towns. The owners of industry, the artisans and tradesmen therefore seem to be classed amongst the ‘bourgeois of the free towns’, with the merchant standing as their example. Boisguilbert provides no more details than this. Besides, the classification is made only incidentally, rather than for its own sake (it is the free towns and pays d’aide which are being emphasised). The Traité des grains introduces four categories again, but modifies their content by comparison with the Détail. A distinction is made between the income of the farmer and that of the rentier; the other kinds of rentes and income drawn indirectly from land rent are the third category, while the fourth is reserved for all the merchants, artisans and other workers (agricultural and others): Generally speaking, all biens . . . consist of two types, namely, the fruits of the earth, which were the only ones to exist at the birth, or rather the innocence, of the world, and the biens d’industrie, which may be divided into four types: firstly, the manna of the earth; secondly, ownership of the fonds from which they are born, sharing the profit between the owner and the farmers; thirdly, the rent from houses in towns, rentes hypothèques [mortgages], charges de robe, d’épée et de finance [fees of the robe, the sword and finance], money and bills of exchange; and fourthly, manual work and trade, both wholesale and retail. (1704b, pp. 829–30) The Mémoire sur l’assiette de la taille et de la capitation adopts an intermediary position.2 The rentiers are grouped in the first place; next are the owners of trade and artisan craft; and finally the workers (although here Boisguilbert mentions only the ‘simple day labourers working for masters in shops’, and not in agriculture).3 We therefore observe that Boisguilbert’s classification of income varies. The last classification system is no doubt the clearest, since it deals with rents, profits and salaries. But the economic structure of the Ancien Régime justified equally well the early distinction made in Détail between the revenus des fonds and the revenus d’industrie. It must, however, be recognised that in all these passages Boisguilbert’s remarks are directed towards fiscal

Equilibrium(11) 75 concerns and the search for income indicators.4 A ‘macro-economic’ perspective does not therefore emerge from these texts, even though it is possible to establish some correspondence between the markets and the various types of income. II Yet Boisguilbert’s work does contain a fairly refined analysis of a macro-economic structure aggregated in a limited number of markets. A collective analysis of several texts allows one to distinguish the following five markets: the markets for agricultural products, manufactured products, ‘investment goods’, the labour market and the market for loanable funds. We shall consider them in that order to identify their principal characteristics, and we shall analyse their function in more depth in the following chapters in the context of the analysis of crises. The macro-economist of today would no doubt wish to consider a sixth market: the market for money; and this addition would not be entirely unjustified in as much as, as we shall see, Boisguilbert reasons in terms of the demand for cash balances for different purposes. However, this kind of market was truly inconceivable to him: are not all monetary operations the reverse side of-transactions (or non-transactions) for goods and services? And is there not already a very visible money market, which is that of loanable funds? We shall therefore remain within the explicit structure outlined by Boisguilbert, while observing its ambiguity at a propitious moment. Furthermore, for the time being we are reasoning on the basis of a closed economy. Foreign trade will be taken into account later. Besides, its role is entirely specific, in as much as Boisguilbert claims that it has no great quantitative incidence and that its determining characteristic is at the level of the interplay of the agents’ expectations (see Chapter 6). Finally, one should obviously not hope for a complete and perfectly integrated model here. Boisguilbert’s remarks are incidental, and he takes the markets into account simply in order to determine the way in which they react in periods of disequilibrium. Some of them (including the grain market) are therefore better analysed than others; the investment goods market, for example, is considered only in a very general manner. Let us start with the agricultural goods market. It is characterised by great flexibility in prices, both upwards and downwards, as a result of the strength of forces which determine both buying and selling and because the slightest disruption means that one of them has the advantage over the other. Here more than elsewhere, Boisguilbert emphasises the necessity for ‘advances’ and a ‘good price’, enabling the farming of land of unequal fertility. Furthermore, the market is studied principally under a regime of ‘pernicious’ regulation due to the monarchy’s grain policy. First of all the fundamental role of the price of corn is emphasised: ‘[its] price alone sows the land, from the worst . . . to the best endowed by nature’ (1704b, p. 854). For corn is not ‘a free present from nature’, and it is wrong to maintain ‘this cruel and false idea that

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grain is like truffles and mushrooms’ (1707a, p. 933). Indeed, ‘ploughing depends on an infinite number of circumstances which almost always require money in hand’ (1705c, p. 781). And this advance must eventually be retrieved: there being no fruits of the earth which do not require expenditure for their cultivation, and which produce more or less according to whether advances are made to bring things to perfection; these things are always the same independently from the sales made; and if these sales do not meet what was spent, this means that the advances are neglected the next time round, reducing the product not just to half of what it was, but even to nothing, since some land is abandoned entirely. (1695, pp. 584–5) Boisguilbert then expands on the details of the necessary advances, the preparation of the land, etc. (see 1704b, p. 835 and 1705c, pp. 780–4, for example). When the differing quality of the land, the amount of advances, the various kinds of soil preparation and the role of prices are combined with the regulations in force (the prohibition to export outside the country or province, the obligation to sell the quantity brought to the market, etc.), prices and quantities necessarily fluctuate violently in opposite directions, with rises inevitably causing falls, and vice versa: extremely high prices make the poorest land workable at a profit, producing such abundance that so long as there are no exports, a depreciation of prices ensues; so that even the best lands can only be managed at a loss, and since this leads to a neglect of most land, at least with respect to fertiliser because of its expense, this causes a terrible disorder at the slightest sterility. (1705c, p. 707)5 This phenomenon is permitted and accentuated by the fact that in periods of plenty, corn is not saved for sterile years. Because of the costs of storing it and due to the decrease in the farmer’s income, it is employed in ‘foreign uses’ such as feeding livestock, thereby annulling any cumulative effect of carrying forward quantities from plentiful years to years of scarcity. In a regulated system, plentiful years are therefore just as catastrophic as years of shortage, the only difference being the more or less immediately apparent or dramatic effects: ‘if one [high prices] stabs, the other [depreciation of prices] poisons’ (1704b, p. 847). this evil [depreciation of prices] . . . produces less noise and commotion than the one caused by extreme sterility; but while it is apparently less violent, its effects are more pernicious; it is like the dagger and poison used to kill men. (ibid., p. 846)

Equilibrium(11) 77 Besides the alternating ruin of buyers and sellers caused by prices which are either too high or too low, and besides the cumulative effects which will be discussed again in the analysis of economic crises, Boisguilbert comments that another important consequence of this state of affairs is a high rate of mortality (1705c, p. 788). Facing the loss of income caused by the depreciation of prices, Boisguilbert thus puts forward the demographic consequences of high prices in periods of scarcity. III Now let us examine the second market, that of manufactured goods. In this market there is greater control over supply; prices are for the most part downwardly rigid. Boisguilbert does not mention price rises due to demand increases, since no doubt this market does not manifest the same urgency in buying, nor the problems caused by decreasing productivity as in agriculture. In the case of a fall in demand, on the other hand, prices remain rigid for some time (a parallel to the functioning of the labour market is suggested), until the final bankruptcy, as we shall see. This stubbornness in maintaining the contracted price . . . is considered by all the arts and trades as a safeguard and the only way of maintaining their profession; they prefer to sell a single piece of work at the marked price than to sell ten at some reduction, although the profit on the number sold would exceed by far the decrease or loss on the single one; they are incapable of understanding the contrary. (1704b, p. 876) Third, there is what can well be termed the ‘investment goods’ market. This refers to the assets which Boisguilbert considered as the basis of the revenus des fonds in the first classification of the Détail de la France. The two main categories of this set are of course the land and the charges. The prices of these assets, which are the heritage of the leisure class, depend on their differing returns, and thus on economic activity in the widest sense, including the economic policy of the government. For example, by ruining agriculture, the agricultural policy also devalued the land; the policy of ‘extraordinary affairs’, part of which is the constant creation of new charges or the doubling of old ones, devalued them; and by offering the more profitable investments (or those with various advantages) to the holders of money balances, the financial policy dramatically decreased the demand for this type of asset, this being accentuated by the agents’ hoarding behaviour. Boisguilbert analyses these phenomena in many passages. At the time, ‘investments’ therefore consisted essentially in the settling of rents, in all senses of the term. As the activities and income connected to the leisure class, they also connote the transition of individuals from the productive class to the rentier class, in other words, social climbing.

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However, it would be wrong to think that Boisguilbert neglects the capital which is necessary to the activities of the farmer, merchant or artisan. The problem of the advances which are indispensable for production is present throughout, particularly in the conception of proportionate prices. But, in France, the social and mental structure of the time was such that the most desirable assets were those of the dominant class and that true investment resided in them; the state of the merchant was but a transitory state. This is also why Boisguilbert considered that the prices of land and the charges, supported in periods of expansion and falling in a depression, were a good indicator of economic activity. This analysis is supported by the definitions of biens meubles et immeubles (movables and fixed) suggested by Domat in Droit public.6 Besides the fact that in this work, too, the bien is equated with income, it is symptomatic to note that what we would call a ‘security’ today is classed as fixed, while profit, connoting general productive activity is included amongst the movables.7 IV Fourth, there is the labour market, which functions no differently from the other markets in terms of competition, but which is characterised by two specific features. First of all the composition of the real wage, which is very particular in France: ‘grain alone forms almost all the food of people of small means, without even the help of drinks or vegetables, found everywhere else, and even less meat and fish’ (1704b, p. 868). Boisguilbert comments that this is a great contrast to England: in England it can be said that bread has the smallest role in the ordinary pittance of the inhabitants. The meat and fish which are very plentiful there, and consequently at very low prices, remove three quarters, and often even all, of the functions that grain has in France of nourishing the people. (ibid.) France’s specific situation has considerable economic effects. In as much as it is normal for the purchasing power of the monetary wage to be sufficient to allow the worker to live (‘it is just to raise the price of the workers, when their works, as well as their needs, do likewise’, ibid., p. 875), fluctuations in grain prices affect wages. But, and this is the second characteristic of the labour market, which makes it similar to the manufactured products market, while the worker willingly accepts the increases in his nominal wage, he nevertheless refuses all decreases. Nominal wages are downwardly rigid.

Equilibrium(11) 79 The ‘artisan’ (a word which Boisguilbert often uses to designate town workers) who asserts a claim to follow the fate of corn ‘in the case of a rise, will not accept this same justice in regard to a reduction in price, which is the cause of all the misfortune’ (ibid.). The labour market therefore demonstrates asymmetrical behaviour. In periods of sustained agricultural prices, the nominal wage is flexible upwards and is aligned with the grain price thanks to the competition amongst those looking for work. [The workers] do not consider the generosity of their masters, who would be no more reasonable than them if everything depended on their good will, but in these encounters, they ensure justice so that neither they, nor their masters, nor the state, suffer any loss. Since the abundance of trade which causes the high price for food, and particularly grain, as well as the floods of money which arrive in Europe every year, increase the search for workers, during periods of high prices they capitulate, not by threatening to do nothing, but by going elsewhere, where their claims will be met. (ibid.) On the other hand, during periods of low corn prices, workers refuse to allow their nominal wage to diminish at all. In the following example relating to agriculture, the worker adopts this position partly to avoid what he considers a psychological punishment and partly as an effect of wealth. Boisguilbert writes that a low corn price, does not even suffice for the cost of tilling, which is always the same, as are the days of the workers, wages of valets, which never decrease once they have reached a definite price, there being a kind of tacit pact amongst these sort of people to prefer to beg or fast rather than to lower their ordinary price. Periods of plenty are very likely to maintain them in this proud state, because since the depreciation of the price of food allows them to earn the money for their food for the entire week in a day or two, they take advantage of it to force their masters not to reduce wages at all. (1695, p. 610) As we shall see, this attitude, which Boisguilbert occasionally describes as ‘the cause of all misfortune’, is an important element in the propagation of disequilibrium and crises. However, the partial rigidity of prices is not the only difference of this market from all the others. Strictly speaking, contrary to what happens in the others where, in principle, extreme fluctuations in prices alternately ruin buyers and sellers, here only the rigidity in the

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fall of prices is damaging. Contrary to the opposing interests of the producers and consumers, the interests of the buyers and sellers of work are theoretically concordant. Only the blindness of cupidity induces contracting parties to believe otherwise. On this market as on the others, Boisguilbert laments that those involved seem only to work from morning until night at destroying one another and clothing themselves in the spoils. The worker would like to have the entire price of the fruits of a harvest for his trouble, with no concern for his employer’s need to pay his master and his taxes, any more than for his own inability to renew the land in order for it to earn his living once again; in turn, the farmer wishes to have the effort of all those he uses to manage his land for far less than is needed by the artisans to support themselves and their families. (1704b, p. 874) V With the last market, the loanable funds, we are obliged to consider a controversial matter: money. In order to clear the ground, it is necessary for us firstly to consider the nature of money, for only when this has been defined will we be in a position to analyse the effects and broach the question of the last aggregate market. Let it be said immediately that in their attempts to formulate a purely economic assessment of the matter, the question of the nature of money appears to be obscured by the fact that commentators almost never take into account the political fact that it also represents. Now, any reader of the monetary writings of the sixteenth and seventeenth centuries will observe considerable ambiguities, or even contradictions, in the authors’ remarks. The old debate surrounding the question of whether money is simply a ‘sign’ (fiat money), in other words, whether its value is merely arbitrary, given by some authority (be it political or social), or else whether money is a commodity (its value being determined by that of the commodity-money) underlies many commentaries, but it would be wrong to see it merely as a difference of opinion, relating exclusively to the domain of economic theory. It seems that in monetary questions, as well as in those linked to taxation, a fundamental ambiguity exists relating to the concept of sovereignty; the early example of Oresme’s work is significant in this regard.8 Thus in République Bodin includes the right to ‘increase or decrease the fineness, value and basis of monies’ amongst the attributes of sovereignty, ‘under the same power to make or break the law’; but on the other hand, in the Réponse to Malestroit in particular, he develops a theory of the value of money and relative prices in terms of supply and demand and he calls for unalterable currencies of gold and silver, condemning all changes and thus all

Equilibrium(11) 81 intrusions of royal power apart from the minting of specie with a stable fineness and weight. The distinction of unit of account and means of circulation cannot help in this matter. Now, the concept of the overall sovereignty of the prince is certainly best served by the ‘moneysign’ (fiat money) approach; and the restrictive opinion by the notion of money-commodity. It is not surprising therefore to see the partisans of ‘strict’ absolutism emphasising fiat money exclusively. This was the case of Cardin Le Bret (De la Souveraineté du Roi, 1632) who previously undertook an analogous analysis in relation to the nature of tax: Given that the money receives its price only from the law . . . and by this means becomes not just the soul of commerce, but also the rule and the measure of the revenue of kings, the wages of their officers and their people’s balance, is it not just that its creation, value and price depend solely on the Prince’s will, which is the law of his state, and which gives soul and authority to all laws . . . ? But one will ask whether the Prince can willingly change the money, increase its price or lower it through a decrease in weight or by altering its quality, as minters say. To which it may be answered: it will always be in the power of the Prince to use it as he finds most fit for the good of his state. For if he can decry it or render it useless, why can he not raise or lower its price when the situation requires it? If the Prince did not have this freedom, what difference would there be to be made between the money and the metal of which it is composed? Ought we not instead to consider the value the King gives to money in the law, rather than its substance or matter? (1632, pp. 137 and 139) It is understandable that the authors of the time who were interested in economics were reticent in their acceptance of this purely juridical and political conception, all the more so since they were heirs to a tradition which applied a theory of value based on supply and demand to money as well as to other commodities; nor could they suddenly ignore what they knew and analysed extremely well elsewhere,9 namely the phenomena of entry and exit of precious metals in and out of the kingdom in relation to their different rates, as well as the issue of the misalignment between the mint prices of the metals (in the form of coins) and their commercial rates, which greatly preoccupied economists in the sixteenth century.10 The authors found themselves divided between economic analysis and the position of the prince whom they had to respect, since the legal mark conferred a rate, confidence and universal acceptance on the metals, thereby defining the money. Thus Scipion de Gramont (Le Denier Royal, 1621), who endeavoured to defend the royal policy against its detractors, allowed the two definitions to coexist. First of all, fiat money: ‘the value of money is taken not from the matter of which it is composed, but from the form, which is the image or mark of the Prince, which were it stamped in any other matter [than gold and silver] however vile and abject, would not cease to endow it with its value’ (1620, pp. 14–15). Thus it is not at all ‘essential to the nature of money for it to be

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graven in gold, silver or copper’ (ibid., pp. 15–16).11 But Gramont also recognised that unmarked ‘gold in pieces or grain’ can also act as money, and that ‘base’ materials could not act as a good money, not only because they cannot have the marks of the prince on them (e.g. shells) but also because of their abundance. And after having asserted that money cannot have a price since it is money that gives a price to other objects, having developed a theory of value based on needs and scarcity, and having returned to the Malestroit–Bodin controversy, he analyses the value of money simply like that of any other commodity (ibid., pp. 117–18) concluding: from this everyone sees that though it measures the price of other objects, yet the price of money is not fixed and stable, as weights and measures are, but rather it changes, increases and diminishes, according to plenty and scarcity, drawing its value in the judgement of men which is often altered either by reason or opinion. (ibid., p. 119) Boisguilbert is no exception to the rule. Besides, in the form in which it presents itself, the dilemma interests him only slightly, and he reconsiders Bodin and Gramont’s analyses in only a rather elliptical fashion. On the one hand, one should not be misled by expressions such as the following, which might lead one to believe in a fiat money: ‘It is very certain that it [money] is not a good in itself, and that its quantity makes no difference to the prosperity of a country in general’ (1695, p. 617); ‘money . . . is of absolutely no use by itself, being suited neither to feeding nor to clothing’ (1707b, p. 975); for in the best tradition, they are concerned only with the fetishism for precious metals which obscures their true function. Gold and silver, as metals, are commodities with a utility: if they did not serve as money, they ‘would be no more sought after than all the other common metals, and . . . even less than them, being less suitable to other uses in life’ (1695, p. 618). The preceding statements relate therefore to minted metal: ‘silver . . . can provide none of the needs of life when it is reduced to money’ (1707a, p. 889). Money is therefore money-commodity: Boisguilbert speaks elsewhere of its ‘definite price’ (1695, p. 618), and of the ‘current basis’ (p. 617) on which it is received in markets; and when he mentions tobacco used as a means of circulation in the ‘isles of America’, he comments in the same way: Tobacco acted alone for all exchange, including the function of money, both wholesale and retail: if one wanted a sol of bread, or even less, one gave an equivalent amount of this fruit of the earth, which had a fixed and definite price, over which there was no more dispute than there is over the current money in any given country. (1707b, p. 977) But these statements do not do enough to prove the presence of a money-commodity conception. Of course the ‘definite price’ may designate the market price of the commodity-

Equilibrium(11) 83 money, founded partly on its physical qualities.12 But this definite price, or rather ‘fixed price’, can equally well designate the value of the coin of currency determined by the prince. In the various examples furnished by Boisguilbert (this is traditional in this subject: the shells of the Maldive islands, copper, bronze, the pieces of leather) he seems to be in favour of a fictional value, determined by the stamp: ‘Has not [currency] often been made of leather, on occasions when, with the mark of the prince which costs nothing, it has the same virtues, and even more [over precious metals] since it has furnished the needs of life more than the piles of silver in Peru or the New World have ever done?’ (1707b, p. 976). In this case, the convention would dominate, not only in relation to the particular object which serves as currency, but also as to its price. ‘Money is therefore an incorruptible guarantee which all men agree to give and receive from one another’ (1695, p. 617). ‘It is through this [the difficulties of barter] that the service of money became necessary, through a convention and the general consent of all men’ (1707a, p. 889). ‘Without mentioning the Maldive Islands where, through a unanimous agreement certain shells act as moneyed silver’ (ibid., p. 890), and in passing he had described these shells as an ‘abject’ material. VI The final element to bring to this analysis, however, and in no sense the least, is the meaning of Boisguilbert’s reasoning in whose context these remarks are made. According to him, the fundamental fact of money is solely its function as a medium of exchange. Money is only necessary ‘as a guarantee . . . of exchange and the reciprocal tradition’ (1707b p. 976); none of all those who search for it with such avidity . . . is brought to this pursuit except to get rid of it immediately, to procure the needs of his condition or subsistence. Therefore it has never been more than, and is at most, a means of acquiring produce, because it is only acquired itself through a previous sale of produce, since this intention is generally as much in those who receive it as in those who spend it’.13 It is in terms of this function that precious metals can be replaced by all the other objects suggested. And Boisguilbert stresses that without looking far, examples are to found right before us: In Europe we have, and even put into practice every day, a far easier means, one which is far cheaper for submitting these metals to reason and, by destroying their usurpation, confines them within their true limit, which is to be just the servant and slaves of trade, not the tyrants. These means are not competitors such as copper, shells, nor

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Equilibrium (11) tobacco . . . which cost effort and work to acquire, but a simple piece of paper, which costs nothing and yet replaces all the functions of money, for millions, an infinity of times, in other words, through as many hands as it passes, while these metals do not leave their natural state and the principles which called them into the world. (1707b, p. 977) These pieces of paper do not designate bank notes, rather they are the effets de commerce

(bills of exchange), hence the recurrent example of fairs in Lyon.14 The medium of exchange function ‘is so non-specific to specie . . . that specie is only a tenth of it, or even a fiftieth of it in prosperous periods’ (1707a, p. 889). Another convention functions, then, on ‘credit’ and confidence: ‘. . . paper, parchment, and even word of mouth, do . . . fifty times more than specie do’ (ibid.). One asks, I say, whether the notes of a famous merchant, whose credit is powerfully established through a certain and commonly known wealth, and such as are to be found in Europe, is not worth more than specie, and whether, having all the virtues and efficiency of money, it does not have particular advantages over metals through its ease in safekeeping and transport. (1707b, p. 977) But nevertheless, and this is the essential point, bills based on confidence, on ‘credit’ and a ‘commonly known’ and ‘certain wealth’ cannot replace metallic currency entirely. This is only possible ‘during prosperous periods’. In times of economic crisis, on the other hand, confidence is destroyed and the solvency of the debtor is very uncertain. The soul which gives life to notes and to paper money is the known solvency of the drawer; since this is based only on the market value of what he owns, be it movables or immovables, since either may be destroyed at any moment by unexpected blows, not only this currency which did twenty or thirty times more trade than money, is debased, but even all its factories are closed and the metal itself is required everywhere. (1707b, p. 998) The return to specie occurs, therefore, because it also acts as a secure reserve of value, and because ‘paper and credit’ are just its ‘representations’ (1705b, p. 685). From which result two possible solutions in as far as the nature of metallic money is concerned: the

Equilibrium(11) 85 ‘reserve’ function can be based on the intrinsic value of metals whose scarcity and title set the price, which is guaranteed by their inalterability; or else this function can be founded solely on the law and obligation for universal acceptance of minted money. It appears that we are still faced with our original dilemma. But the preceding considerations, the fact that analytically the different types of currency are all placed on the same level as bills of exchange, and especially the passage from the Détail de la France (p. 618) quoted above, in which it is precisely a question of the unalterability and of the ‘true estimate’, lead me ultimately to opt for the solution of commodity-money. VII Despite the ambiguities in Boisguilbert’s work, as in the work of previous authors, the schema might therefore be as follows: precious metals were chosen by convention as a standard of value and as a medium of exchange, since they were commodities with suitable characteristics for this new function. Metallic money can be replaced in this habitual role, but it cannot be replaced in the later role which emerged, that of acting as a store of value. It has a price which is determined like all other commodities through supply and demand; the demand for precious metals which results from their new role is simply added to the demand for other purposes. Of course the theoretical problems connected with this approach are not raised, but the value of money, in the first sense of the term, could not be linked to a ‘money market’ since it is seen only as the inverse of the level of prices. In the vocabulary of the time, it is important not to confuse it with the second sense of the term which is the rate of interest, determined on the loanable funds market. In the analysis of economic crises, it is therefore necessary to retain this distinction in the face of assertions such as: ‘Money . . . has transgressed its natural boundaries in a terrifying manner, it has taken a price of preference over all other commodities, with which it should only be in competition’ (1707b, p. 985). Indeed, as in this case, it could be a matter of the relative price (of proportion) of the commodity-money: being very sought after, its relative price rises while the price of some or all other commodities evolves in the opposite direction thus upsetting the equilibrium ‘which must exist between gold, silver and all sorts of objects’ (ibid., p. 979). But it is also a question of the interest rate, especially when the price of money is compared not to the prices of ‘all other commodities’ but instead to that of immovables: ‘. . . for everything to be perfect, proportion must exist between the value of immovables and the value of money’ (1705b, p. 704). Yet there are elements of a theoretical consideration of the ‘money market’ in Boisguilbert’s work which must be examined. They are shown by an analysis of the different types of supply and demand for money and they produce a striking dual-regime model in

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which both supply and demand are differentiated according to the state of the economy, whether it is in a state of plenty or a state of crisis. We have seen that demand consists essentially in a demand for a medium of exchange ‘in prosperous periods’ as in times of economic crisis. The only difference between the two possible economic situations is the fact that during a depression most of the demand relates to metallic money, while in the ‘natural’ order it is the opposite. It is . . . a matter of no importance that, for the remainder of its employment in this use [in competition with ‘paper’] where it is never needed except when . . . there is not sufficient solvency in one of the contracting parties to trust their word, paper and parchment; it is of no importance . . . that there be a lot or a little of it to assure prosperity in a country. (1707a, p. 890) the greater or smaller quantity of gold and silver, especially in a country filled with commodities which are necessary and useful to life, has no role in enabling the inhabitants to enjoy them plentifully; but this is only when these metals remain within their natural limits. (1707b, p. 978) But the demand for money is also a precautionary demand (in the wide sense). While this demand is weak or non-existent when business is going well (in which case specie is accumulated simply with a view to a large expenditure or, perhaps, for some unforeseen event), during times of economic crisis it is subject to considerable increase: if the worst situation for a merchant, when trade is going well, is to have his money uselessly in his vault, because it produces nothing for him; when affairs are going wrong, it is to his advantage that it not be in circulation, given that although it earns nothing, it loses nothing, and that he would run the risk of going bankrupt through the cessation of trade. And what is true of the merchant is equally true of all those living from rent. (1695, p. 619) The demand for money in its total amount as its composition thus depends entirely upon the economic situation. Second, and this element is essential to Boisguilbert, the velocity of circulation of metallic money (transaction velocity) depends on the relative importance of the different elements in this demand and is even a faithful reflection of it. Thus, a high velocity reflects the dominance of the ‘transactions demand’ motive, while an increasingly slow velocity indicates the increase in hoarding (precautionary demand for cash

Equilibrium(11) 87 balances). At a given moment, money is always owned by some agent or other; Boisguilbert sees clearly that it is impossible to perceive the hoarding phenomena except through variations in the velocity of circulation, having defined a reference period. money is only the slave of consumption, following its fate every step of the way, and walking or stopping with it, with one écu passing through one hundred hands in a day when there are many sales or re-sales, and remaining in a single spot for entire months when consumption is ruined. (1707a, p. 954)15 Furthermore, the velocity of circulation of money varies according to social class since it depends on a propensity to spend; it is more rapid in the productive class than in the leisure class.16 Of course the emphasis on alterations in the velocity of circulation has implications for the analysis of what we call today the money supply. As has been shown, this is composed of two parts: metallic money and bills of exchange. This money supply fluctuates greatly: the quantity of metallic money depends on foreign trade and other uses of precious metals,17 and may be considered as being largely exogenous. On the other hand, the supply of money based on credit and confidence fluctuates widely, and may be considered as endogenous. In prosperous periods, monetary circulation is very active and creates the means it needs itself. In modern terms, the supply of money automatically follows demand, which is mainly reduced to transactions demand. But in times of economic depression, part of the money supply is destroyed (the part founded on confidence) while demand increases (or does not decrease as fast) and comes up against the largely exogenous metallic stock. The demand for precautionary balances inflates considerably and it may be assumed that it compensates for the decrease in transactions demand due to the reduced level of exchange activity and the fall in prices. The exogenous nature of supply is not itself an absolute obstacle. The first motor is still the agent’s variable propensity to spend according to the state of the economy and income category: It is obvious . . . that to create a large income in a country rich in commodities, it is not necessary for there to be a lot of money, but only a lot of consumption, with one million causing a greater effect of this sort, than ten million when there is no consumption, because this million renews itself a thousand times and makes as much income at every step. (1695, pp. 619–20) In the short term, as in the long term, all other things being equal, it is the fluctuations in economic activity which cause the alterations in the quantity of money, and not vice versa. Boisguilbert would no doubt have supported Smith’s assertion, which Marx also used, that the ‘channels of circulation’ can never overflow; but he would have added that this

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does not stop money from having an effect on the real variables of the economy, as his analysis proves. One important consequence for this analysis is the existence of what might be called a ‘liquidity trap’, but of a particular sort: one which would not act in relation to interest rates, but in regard to the agents’ expectations for the general state of the economy and business. If circulation does not take place and exchanges stagnate, it is therefore never for lack of money (Boisguilbert’s system minimises the problems caused by the entry and exit of precious metals provoked by the different parities); and it is absurd to think that a supplementary amount of specie will improve the situation, for it will simply be hoarded: The shortage of money is not to blame, only the fact that it does not follow its usual route. And the silverware reduced to money in recent days [1689 edict] has not brought any more remedy to this problem than a fleet from Peru brings to the poverty of Spain, which, since receiving it, has not become richer since the money only passes through there . . . Thus, after its first course, the silverware went to the strong ones [the rich] who we have just spoken of, from whom it is impossible to withdraw it. (1695, pp. 620–1) This explains why Boisguilbert never considers a money ‘market’ as such. Furthermore, it also explains why, in the final analysis, the amount of money appears to be of no importance. It is either endogenous (the state of opulence) or largely exogenous (the state of economic crisis) but without constituting a true obstacle in this case: in the state of economic crisis, the trap depends on factors located upstream. Hence the emphasis on the ‘price of money’ in the second sense of the term, i.e. the rate of interest. VIII Boisguilbert defines the role of the interest rate clearly, if only implicitly. First of all, during prosperous periods this rate does not seem to have a direct effect on the activities of the productive class. The Détail de la France and a memoir (1705a) contain the striking example of ‘dealers’ willing to borrow money at the usurious rate of 400 per cent (1695, p. 622). In other words, in the state of opulence the opportunities for profits are such that they accommodate a high rate of interest. The situation in times of economic crisis is different, but the role of the interest rate is only a consequence of the depression, even if it contributes to worsening it. Nor does the rate of interest concern the constitution of idle cash balances which again are only the consequence of the precautionary behaviour which reduces money in circulation. The rate is determined by the supply and demand for loanable funds and has a large role in some agent’s decisions to devote a part of their expenditure to the purchase of ‘investment goods’ (lands, charges) discussed earlier, or to loan these sums mainly to financiers or the

Equilibrium(11) 89 state. This is why, in Boisguilbert’s texts, the ‘price of money’ in the second sense of the term is always related to the price of ‘immovable goods’ and the return they command. It is by means of the arbitrage between these two markets that the rate of interest influences the economy initially; it is also one of the channels by which disequilibrium is transmitted. The schema might be as follows:18 the king, needing funds, borrows from traitants, partisans and other financiers, in return for a high interest rate (25 per cent) which is ‘justified’ by the urgency of the transaction and the public’s lack of confidence in the finances of the state. Since the traitants do not have the whole or part of this sum themselves, they borrow it from the public by offering a high rate of interest (10 per cent). The rise in rates is thus passed from one to the next and alternative, less lucrative, employment is neglected, to the detriment of the economy. Land falls into ‘non-value’ as do the charges, thereby de-valuing the assets of part of the rentier class. We show that the deals the traitants have made with the King over forty years . . . are awful and absolutely ruinous for the King and his people, whose interests are inseparable. The 25 % interest rate [denier four] for an advance of only several months . . . which the King gives his traitants . . . has distorted the nature of money entirely, for while it should compose only a thousandth part of the wealth of the kingdom, it has given it an excessive price, annihilated funds and thus ruined the kingdom . . . The lenders, seeing the numerous greedy borrowers, have charged a 10% interest rate [denier ten], and seeing great benefits in this usury, nobody thinks about trading any more, nor worries about the land or charges. Now, as soon as the King stops borrowing from the traitants at 25%, they will no longer borrow at 10% as usefully as they had, and everybody will place their money at the ordinary rate as in the past, buying land or other immovables; thereby revaluing these assets and making money less scarce, by re-establishing the proportion which ought to exist between these two elements, whose discord produced the public ruin. (1705b, p. 733)19 The fluctuations and effects of the interest rate are, of course, accentuated once a crisis sets in, when confidence is destroyed, precautionary cash balances are created and, simultaneously, a part of the money supply disappears (the ‘notes’), throwing virtually the entire burden of circulation onto the other part (specie); the demand for loanable funds increases while supply decreases. IX The two types of approach presented in Chapter 3 and the previous sections are based on common conditions for achieving economic equilibrium. Whether there are as many markets

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as there are branches, or whether they are regrouped into certain categories, the ‘general market’ (p. 683) which forms the kingdom will only be in its ‘natural’ state of ‘harmony’ or ‘opulence’ when in the equilibrium of full employment. Boisguilbert stresses that this equilibrium is guaranteed by ‘nature’ and ‘Providence’: Therefore only equilibrium can save everything; and the nature alone . . . can secure it; so long as one does not prevent it from acting. (1704b, p. 874) In order to elucidate Boisguilbert’s ideas on this matter, it is necessary first of all to recall the specific meaning of the terms used, and in particular the meaning of the word ‘equilibrium’: it is a perpetual movement of elements, a perfect mechanism because it is natural, suffering from all foreign intervention which slows it down or blocks the cogs. The Cartesian image of whirlpools should also be recalled. Boisguilbert’s liberalism is firmly anchored in mechanics. Nothing is more misguided, therefore, than to consider this equilibrium as wholly static: an overall stasis exists, but it results from the incessant dynamic of the particles of which it is composed. Thus, the position of agents within the global equilibrium may vary; for example, some are ruined, others enriched. But if this ruin and enrichment are produced naturally through the behaviour of the individuals and are not provoked from outside, then the overall result will not be modified, for there is no reason at all why one behaviour should dominate another statistically. In prosperous periods individuals can ruin themselves either by excessive expenditure or by other ordinary causes; but the body of the state does not suffer at all, and the land . . . changes ownership without any loss in its initial and just value, because there was none, neither in the quantity of commodities it produces, nor in the price or ease of sales. (1695, p. 588) Through the interaction of natural and reciprocal compensation, the ‘harmony of the Republic, which a higher power controls invisibly’, is achieved, despite, or rather thanks to, these incessant movements. Now, were all the money in the hands of people of small means, where it is always movable, it would necessarily return rapidly to the hands of the powerful who would

Equilibrium(11) 91 transform most of it into immovables; this is because the harmony of the Republic, which a higher power controls invisibly, maintaining itself through the mixture of good and bad managers, all things, movables and immovables, are in constant revolution, and the rich become poor in order that the poor become rich. (ibid., p. 621) However, this effect is only produced by the natural course of events. Nature must be left to act, and to ensure this, one must limit oneself to discovering the secondary causes of the cogs of this great machine so as to favour its functioning. Of course in a mechanical perspective, one could also attempt to construct an entirely new machine, regulated and made of a piece by man, and Boisguilbert does consider this alternative seriously. But an entirely human machine would require universal regulation for all markets; thus, all prices would fluctuate, but, according to Boisguilbert, the synchronisation of the fluctuations would cancel their disturbing influences, and the system of relative prices would remain unchanged. Why have cobblers not been prohibited, along with other workers, from taking back their produce from the market once they have brought it there, with an injunction to give the shoes away for two sols a pair when nothing more is offered to them? Why have all workers not been enjoined through a prohibition to remain entirely in the place of their birth with no permission to leave, on pain of death, and not to leave the kingdom, forcing them to content themselves with whatever wage, however mediocre, that can be found there, although they would be offered twice as much in other lands, which they would be absolutely prohibited from accepting? Here again is the process that would have been used to put things on equal terms. And this way no discord would ever occur: everything would rise or fall according to the level of grain, and it could be sold at twenty sols the setier without any upset, because the workers would re-establish the price of twelve or fifteen deniers for a day’s labour, since during these times they would have corn for twenty sols the setier and partridges for six. (1706, pp. 799–800) Boisguilbert’s reasoning here is paradoxical. But while it is not perfectly clear why the workers’ ‘residency assignment’ and the regulation of the shoe market would necessarily result in fluctuations in price in phase with the prices of corn, the meaning of the passage is unambiguous: there is no middle ground. Either it is left to nature, or we create a new mechanism. Any intermediary position – such as the one the author had before him – is suicidal. And since an entirely new, regulated machine is inconceivable, then let all regulation be banished. ‘But since this supposition is impossible and general constraint is not practicable,

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we must chose the other path, namely total freedom, which is the only agent of nature’ (ibid., p. 800). Thus, according to Boisguilbert, the mechanism of individual interests suffices to assure prosperity. Laissez-nous faire says the merchant from Rouen, Thomas Le Gendre to Colbert: According to this same principle, a person of status sent for an important merchant to confer about the means of re-establishing trade, that one would have to be blind not to agree that it was ruined; the merchant said that there was a very certain and easy method to put into practice, which was that if he and his ilk [i.e. the ministers and the men in charge of the state] stopped interfering in it [in trade] then everything would go perfectly well because the desire to earn is so natural that no motive other than personal interest is needed to induce action; and that there was only one constant violence, caused by indirect interests, which could destroy this state of affairs and throw the economy into the present state. (1705c, p. 795)20 And laissez-passer: Consider the freedom of the roads as the principle of all sorts of trade, and therefore wealth: a sea filled with pirates is impracticable; now the land in France has more obstacles on its roadways than the most feared seas in world. (1703a, p. 296) X Is Boisguilbert’s call for a total ‘freedom of trade’ based on an act of faith, i.e. does it derive from an ‘intimate conviction’ or can it be rationally deduced from a more profound analysis? To broach this question it is necessary to return to the two states of society presented: the ‘state of innocence’ and the ‘polished and magnificent state’ (for the time being we shall ignore the separation between the prosperity and recession). We should also remember the two approaches within the polished and magnificent state: in terms of social classes or markets. Boisguilbert’s argument initially concerns a comparison between the state of innocence and the model of equilibrium of the polished and magnificent state illustrated by the activities of the only productive class. Just as the concept of equilibrium is the application on the economic and social level of a notion which goes beyond it, the concept of exchange also offers a wide field of understanding: an exchange between men, an exchange of men and nature, or of nature with itself. The principle of exchange is based on the reciprocal utility the exchangers receive from this type of trade; this reciprocal utility was termed ‘profit’ in the seventeenth century. The meaning of exchange is suggested by an analogy with hydraulic models:

Equilibrium(11) 93 the land is entirely abandoned for lack of people to farm it, and men perish from famine for lack of the goods which would grow on this land if they were allowed to farm it, though these men and this land would have reciprocally the resources to pay for the utility they would draw from one another. These men would pay for the grain they would receive from this land to feed themselves with their manual labour, and the land would give this grain in return for the effort these men employed in the farming; and it is thus for all the professions in the republic which are necessary to one another through a mutual bond. The same may be said of infertile and plentiful years, which ought to be in perpetual commerce, providing one another with what they have in excess to have the necessary which they lack. (1695, p. 640) Reciprocal utility, that is shared profit, is therefore a general condition for the achievement of equilibrium.21 It is the first of the ‘laws of trade’ (p. 753). Harmony resides in it since the different parts of the machine communicate amongst themselves and, while being ‘always naturally defective’ when taken separately, together they form ‘a very perfect whole’ (to Desmaretz, July 1704, p. 311). This general idea is elucidated on the economic level: communication and co-ordination of activities occur by means of prices. These prices, thus, must be at a level where each contractor finds them of interest. Boisguilbert names these prices ‘proportionate prices’ (prix de proportion), in other words, prices which confer harmony and prosperity. ‘It is . . . proportions which cause all wealth, because it is through them that exchange, and consequently trade, occur’ (1707a, p. 891). The principle is simple: ‘each occupation must feed its master’ (1707b, p. 992), i.e. allow him to survive and to produce again in the following period, exchanging the superfluous for the necessary. Trade must take place at a ‘necessary price . . . in other words at a rate which keeps the merchant out of loss, such that he can continue his occupation profitably’ (ibid., p. 986). This rule, which is obvious in the state of innocence22 where the small number of men, needs and occupations makes everything transparent, is no less so in the polished, magnificent state in which the two hundred professions form ‘all together a chain of prosperity composed of several rings, where the disconnection of a single one makes the whole useless’ (1704b, p. 830): The justice which must exist between two traders who exchange solely with one another must extend to more than two hundred professions now found in France. They all have a shared interest in maintaining this justice because they obtain their subsistence and maintenance from it alone; it must not be disrupted in the slightest part, in other words the weakest worker must not sell at a loss otherwise, like a contagious leaven, his ruin will immediately corrupt the whole. (1707a, p. 891)23

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However, the different passages cited are not sufficiently explicit theoretically: what is the exact nature of these prices? Of course they must allow for the reimbursement of production costs, understood in a wide sense; but are they determined simply on the basis of these costs, i.e. on supply only, or do they depend also on demand? Some see them as an early form of ‘natural prices’ (labour value or production price), others consider them to be based on the interaction of demand and supply on all markets. A reading of the texts supports the second interpretation in a sense. Certain expressions are undeniably ambiguous. As we have seen, Boisguilbert speaks of an exchange of ‘labour’ in return for produce, but this is an exchange between man and nature. Do we not also read in Dissertation (1707b, p. 992) that in order for these prices to establish themselves, ‘it is necessary that each individual, both in selling and buying, find his advantage equally, in other words, that the profit be justly shared amongst one of these two situations’? One should not be misled by these terms. We know that the word ‘profit’ has a very wide meaning, which includes utility; and even if it were taken in the narrow sense of classical economic theory, would it not be curious to speak of a profit shared by the buyer and the seller? Other expressions are equally ambiguous, and could very well relate to classical prices, such as this one: all things and commodities must be in constant equilibrium and preserve a proportionate price in relation to themselves and the costs involved in producing them. (1707b, p. 993) But, in general, the context does not lead to confusion. The previous passage, for example, has this qualification attached to it: ‘to maintain equilibrium, the unique preserver of general prosperity, there must always be equal parity between sales and purchases, and a similar obligation or need to do the one or the other, otherwise everything is lost’ (ibid.). ‘Proportionate prices’ relate to a system of equality between the supply and demand for commodities in all markets. The emphasis on demand is omnipresent. The idea is again specified by a remark in regard to the economic policy of the English and Dutch, for whom all means are good for regulating the supply/demand relation and thereby avoiding a breach of proportions: ‘It is the fear of a similar disorder which leads the Dutch to throw pepper into the sea, and which causes the English to give money, at the public expense, to those who come from abroad to remove the surplus grain’ (1707a, p. 920). It is also specified, more directly, by the emphasis on overall equalities in an equilibrium situation: it can be said with certainty that general prosperity . . . is a general, perpetual composite in which each individual must work at all times, through contributing to

Equilibrium(11) 95 and taking away from the mass [of commodities] always in the same way. This is because the danger is equal from whichever side the decrease arrives. When this is obeyed exactly, there results a perfect composition where everything is found, because everything is brought to it. But the moment someone goes against this rule of justice, taking more or bringing less than his share, defiance arrives along with the disruption of proportionate prices, and the whole body is corrupted. (1707b, p. 1010) Finally this interpretation is confirmed by Boisguilbert’s insistent elaboration of what he terms the ‘tacit condition’ of exchange, which is nothing more than the second condition for the realisation of global economic equilibrium following the achievement of proportionate prices. In a bartering system, he says, nobody buys his neighbour’s produce or the fruit of his work except under the necessary condition, though it is tacit and not openly expressed, that the seller will do likewise with the buyer’s produce, either immediately, as sometimes happens, or via the circulation of several hands or intervening professions, which always amounts to the same. (1707b, p. 986) This tacit condition does not, however, act only in a bartering system and between producers; it also extends to the monetary economy: A labourer who sells corn to a brocade merchant cannot take this item in exchange, since he has no use for it; but he receives money which he gives to a cobbler or linen merchant who rents his house from a lord and so gives him the money which the labourer originally received from the brocade merchant; the money is then returned or compensated to the brocade merchant by the house owner, who receives this brocade in exchange, in accord with the intention of the first contractors. This circulation is always the same, even if it is not entirely completed until it has passed through two hundred hands or professions . . . which in fact is even necessary for their common maintenance. (1704d, p. 966) And finally the tacit condition also takes into account the rentier class: the farmers pay their master only on a tacit condition, which is not however included in the lease, namely that the lessor will buy everything grown on the land, either himself or through intermediaries, in other words via a circulation and transfer from

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Boisguilbert could not have expressed himself more clearly. This is an analysis of what was termed much later the loi des débouchés, but in a far less rigid and dogmatic form: it is neither an identity nor a law which is always achieved post factum, but a simple condition of equilibrium, whose hypothetical and restrictive character the author is aware of. He tells us that it suffices for a trader not to sell his commodity at a ‘proportionate price’, or else for him not to sell all his commodities at this equilibrium price for him to fail to cover his costs. it is as if he was not selling at all, and when he perishes, it will happen [to traders] as it does in vessels attached to one another in which powder is lit and both explode. (1707b, p. 986) It would be the same if an agent breaks with this tacit condition and does not spend the sums he receives. The trader who breaks the chain of exchanges destroys the ground beneath his own feet, since not only . . . will he cause [his neighbour] to perish through ceasing to buy, but he will cause even his own personal loss, by making it impossible for his neighbour to return to his business to shop, which will cause his bankruptcy and close his shop. (ibid.) In these conditions, is there, ultimately, any chance of economic equilibrium being achieved? And if so, through what means? As many authors assert, and as one is led to believe in a passage from the Dissertation cited earlier, according to which equilibrium is a ‘general, perpetual composite in which each individual must labour at all times’ (1707b, p. 1010), do the agents need to be aware of the difficulties in achieving it, and does it require a self-love strongly ‘enlightened’? Before answering this question, we must take into account the last condition stated by Boisguilbert following the ‘proportionate prices’ and the ‘tacit condition’ of exchange; this is competition between the different agents. XI Here again we encounter the Jansenist heritage. At the root of the agents behaviour, which is dictated by cupidity, there is naturally a maximising attitude which has a very modern

Equilibrium(11) 97 ring, as it is formulated by Boisguilbert: ‘each individual intends to procure his personal interest to the highest degree and with [the] greatest ease possible’ (1705c, p. 749). In these conditions one might well wonder about the existence of equilibrium. At the very least, equilibrium demands that no agent dominate the market, otherwise the proportions are inevitably breached in his favour. It is therefore necessary first of all for each to have ‘a similar obligation to do one and the other’, i.e. to buy and sell, ‘without which everything is lost’ (1707b, p. 993): it is necessary that each of the parties, the buyers as much as the sellers, have an equal interest or need to buy and sell; otherwise, if this equilibrium ceases, the one with the advantage will make use of the opportunity to force the other to capitulate, by subjecting him to the law he wishes to impose. (1704b, p. 876) Next the seller must be able to approach several buyers, and likewise reciprocally; in short, a freedom of trade exempt from all hindrance, and in particular freed from the prohibition to transport commodities from one province to another or the obligation to sell on given markets; free from all monopolies, oligopolies and monopsonies. And the freedom would be all the more effective if the agents in the markets were numerous throughout. The idea is detailed in relation to the inevitable example of the agricultural market: the process therefore occurs between the buyers and sellers of corn. Now, just as in the exchange of all other sorts of produce, one would like the commodity for free, while the other wants to sell it at four times the ordinary price, and it is only the merchant’s certainty that his neighbour, whose shop is filled with similar items, will be more reasonable, that makes him reasonable, in addition to the fact that the buyer is not always in a situation where he is entirely unable to do without what he wanted. (1704b, p. 848) it is in the interest of all buyers that there be a number of merchants and many commodities, so that the competition causes them reciprocally to give a reduction on the item in order to receive the preference in the sale . . . on the other hand, the merchant never sells better than when, on account of the scarcity of the item, he is assured that he does not have many competitors, and that the buyer is virtually obliged to pay the price he asks. (ibid., p. 849)

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Equilibrium (11) Competition24 must therefore prevail in the different markets. But is this necessary

condition sufficient? Boisguilbert seems to state that it is, with the exception of the grain market. The difference between the agricultural and non-agricultural markets seems to lie in the fact that, in the agricultural market there is a strong need to buy and sell, which means that the slightest advantage or benefit to one of the two parties is cumulative, annihilating the other: The farmer cannot do without selling his grain which he who comes to buy cannot avoid eating; it is these two obligations which cause the disorder in this exchange, and through which the two parties we have just spoken of are constantly in battle. Furthermore, even a slight advantage of one over the other is a leaven which multiplies as you watch, producing a situation so extreme that one party knocks the other down entirely, which is the ruin of the state, whichever side the advantage is found on. (ibid., pp. 848–9) But the difference is only apparent and competition is a powerful regulator of all kinds of markets. Boisguilbert’s goal is precisely to show that the type of disequilibrium just described in the grain market can only occur in a system of regulation. Free trade and competition necessarily equalise the weapons, blurring the differences between markets. XII Do the preceding reflections answer the question posed at the beginning of the last section? Do the three conditions of equilibrium, i.e. proportionate prices, the tacit condition of exchange and competition, suffice to ensure the achievement of equilibrium? Does not the selfish and maximising behaviour of the agents constantly compromise everything? Boisguilbert emphasises the fragility of the situation: ‘it is the most perilous situation and needs the most managing’, and he eventually poses the question of reaching and maintaining equilibrium in terms which are very similar to those employed by Nicole when he asked the question in relation to social cohesion (see above, Chapter 2): However, through a terrible corruption of the heart, there is no individual who does not try from morning until night and does not employ all his efforts to ruin this harmony, though he has only his happiness to expect from its maintenance. (1707a, p. 891)25

Equilibrium(11) 99 Is it necessary here, as with Nicole, to appeal to the action of the ‘enlightened self-love’ which he claimed enabled the maintenance of social cohesion, in liaison with other moral and political institutions? In one text Boisguilbert does in fact appear to adopt this solution; but it is only to then immediately reject the idea that men could act any other way than blindly and egotistically in the economic realm. Through all these arguments it is evident that while each individual works towards his own particular interest, he must never lose sight of equity and the general good. This is because he owes his subsistence to it, and by destroying it for a moment in relation to a merchant with whom he trades, whether by common error or through corruption of the heart, while he believes that he has won everything, in fact he should expect that were this conduct to become general . . . he would pay dearly through the total destruction he builds for himself in the future . . . However, the work of men, from morning until night, involves following the opposite practice. So greatly does self-interest blind men that in buying another man’s good all would be happy not only to obtain it at a loss for the seller, but also to have everything valuable in addition. (1704b, pp. 830–1) Yet equilibrium exists and occurs despite everything. Boisguilbert refers to the action of Providence, which he describes as the ‘superior and general authority’ and he emphasises the fact that it only maintains equilibrium in the markets ‘at the tip of a sword’, ‘not having a single moment or a single market where it does not need to act, since there is not a single encounter where it is not fought’ (1707b, p. 986). if a superior and general authority did not intervene to halt this avidity in relation to the absolutely necessary commodities . . . there are men who are inhuman enough not to care to save the life of their fellowmen in pressing situations, except at the price of all of what they have. Since this police cannot be equal in detail, it must be achieved indirectly through a powerful authority, by preventing a commodity from becoming the prey and victim of the avidity of a trader, who would be happy, if he was able, to sacrifice everything to his own interests, quite apart of religion and humanity, which are entirely banished in these operations of sales and purchases, because it is believed that one satisfies God and men simply by not using any fraud and trickery, and merely profiting from the necessity of urgent occasions. (1704b, p. 831)

100 Equilibrium (11) However, it would be wrong to believe that the achievement of economic equilibrium depends on a miracle – or worse, requires the constant, powerful intervention of politics. The meaning to accord to the term ‘Providence’ was established previously (Chapter 1) and Boisguilbert employs the term in the same sense as Nicole and Domat. Providence is providence-law, designating the secondary causes introduced by God at the beginning of the world for the functioning of the universe. Consequently, what exactly does the word ‘Providence’ mean to Boisguilbert in the economic domain? It means competition. This higher ‘coercive’ force, as Marx later described it, simply reflects the laws of the functioning of the market in a system of free trade: It is only at the tip of the sword that justice is maintained in these encounters; but this is what nature and Providence have charged themselves with. Just as they have established refuges in order for weaker animals not to become the prey of the strong, who are born equipped to live from carnage, so too in life’s commerce, it [nature] has established an order such that, provided it is left alone, not even the most powerful, when buying a good from a poor man, has the power to prevent this sale from procuring his subsistence. . . . We said provided nature is left alone, in other words, that nature is given its freedom, and that one only ever intervenes in order to provide protection and prevent violence. (1707a, pp. 891–2) Competition regulates the economy and overrides the two other conditions for the achievement of equilibrium, including them as its corollaries; furthermore, this occurs without enlightened self-love. Competition forces individual interests to obey, it compels agreement, and thus the general good. To be convinced of this one has only to re-read Boisguilbert’s description of the action of ‘nature and Providence’. Boisguilbert’s audacity can now be measured: in short, private vices make public benefits. Nicole, Domat and the entire Jansenist tradition are overtaken in one fell swoop. The social mechanism is self-regulating. Competition takes the place both of ‘enlightened self-love’ and all the political, social, moral and religious bonds which create the ‘organised nation’. Political order, this ‘admirable invention’, moves into second place, or is even greatly weakened. The role of the state does not disappear, but is confined to ‘manage’26 the equilibrium to ‘provide protection and prevent violence’. It enforces the conditions of free competition. The state no longer furnishes the rules of the game, instead it arbitrates the part imposed on it. Let us conclude this analysis with two remarks. The first relates to the ‘management’ of the economy. Although it must achieve free trade, this ‘management’ does not, for all that, signify absolute non-interventionism. There are situations in which the state must intervene;

Equilibrium(11) 101 of course they concern the agricultural markets because their particular nature means that their equilibrium is fragile. In certain cases direct action in the markets is indispensable; we shall examine the logic behind this (Chapter 6). But, and this is the second point, what assures us that the government will act in this way? Governments are themselves part of a larger whole, that of the leisure class and the rentiers, whose behaviour may compromise the equilibrium at any moment. Indeed, no mechanism regulates this inner class. Its parts are not subject to the coercive force of competition. Furthermore, it will be remembered that they graft their income circuit onto the structure of general equilibrium of the productive class. There is, therefore, every reason to fear them, and it is from them, and them alone, that the destabilising shocks derive, provoking the fall of the polished and magnificent state from a prosperous situation to the situation of economic crisis and depression. It is . . . relevant to analyse in detail, and to show that although this bounteous possession of everything the mind can imagine beyond necessities is wealth, it is also the most perilous situation, with the greatest need for management. Otherwise it can happen that when poorly chosen measures are instituted, what is introduced for the enjoyment of the superfluous, serves only to deprive us of the necessities, throwing a state from the summit of prosperity to the last degree of scarcity in an instant. (1707b, pp. 985–6) All one can assume from these memoirs then is that however essential the qualities of climate and land are to the good or bad situation of a country, nevertheless, the examples of Spain and Holland demonstrate obviously that the skill or mistake of those who govern contribute to it at least as much as nature. (1695, p. 638) Thus we can understand the sense of Boisguilbert’s initiative of introducing a state of innocence between the Fall and the developed state by society. It is to be observed that the conditions for the achievement of economic equilibrium are established as if one were still in this state of innocence, that is, general equilibrium without a leisure class. The prosperous model is not therefore a true description of the society Boisguilbert had before him. In fact it is only a model to be attained. In the case of success, one would thus move the closest it is possible to be to the primitive state, at least in terms of effects, but without really being able to return to it: the nature of man is corrupt, and evolution is irreversible. Furthermore, by not troubling the equilibrium, the rentier class would thereby obscure its presence, thus preventing any eccentric from getting up to demand its euthanasia. Might this be a

102 Equilibrium (11) neutralisation of the initial act of violence? The problem then becomes more complex. While in these conditions the members of the productive class can abandon themselves to their unenlightened self-love without damage, one senses that it would not be the same for the rentiers. An awareness of the consequences of their actions, an enlightened self-love would be necessary to their prosperity, or even to their maintenance, and misfortunes would derive from a disregard of this rule. But the question is even more complicated for the governing faction of this class. Not only must it be suspicious of ‘individual interests’ (misunderstood), like all the group to which it belongs, but it must also watch over its own charitable impulses. Here we encounter one of Nicole’s ideas in a modified form. According to Nicole, charity practised in the world must avoid taking on a wild attitude and must force itself to be amiable, thus speaking a false language as well. This theme is transposed by Boisguilbert in terms of economic policy, and is limited to the personnel directing the state. When considering the damage caused by the grain policy, he stresses, one is all the more heartbroken that it benefited no one and was initially the effect of good intentions and a wish to come to the aid of the people. But the people suffer from it. ‘In addition, there is piety and Christian charity, and one persuades oneself that one deserves paradise by saying that grain must have a low price, in order for the poor to survive’ (1704b, p. 864). Self-love, especially when placed in an eminent position, is reluctant to understand that it has been grossly mistaken for a very long time . . . What is most troublesome is that the opposite party claim to have love or pity for the poor on their side and the most just measures to avoid the terrible effects of violent infertility . . . What a strange destiny it is for the monarchy, in order to be rich and happy, to have only to defend itself from the zeal and good intentions of those who manage it! (Letter to Desmaretz, November, 1704, pp. 335–6) In government, charity too must be enlightened.

5 Destabilising shocks (I) Court language and merchant truth

I In the context of the equilibrium of the productive class, the fundamental principle of reciprocal utility in exchange requires that three conditions be satisfied: ‘proportionate prices’, the ‘tacit condition’ of exchange and free competition. I have suggested that according to Boisguilbert the third condition implies the other two; this suggestion will now to be examined in detail. The unresolved problem of the relationship between the social group approach and the aggregated markets approach must also be broached. In the considerations which follow, we shall return to the question – partially left aside until now – of the precise position of the leisure class both within society and in regard to the achievement of economic equilibrium. Boisguilbert takes it as given that free competition enables the realisation of proportionate prices. If no agent dominates the others, and if no one in any particular market is more urgently obliged to sell or to buy than his cotrader, and given that the choice of co-contractor is not imposed, it can be supposed that proportionate prices occur in a context of perfect information, i.e. they leave everyone ‘out of loss’, and that the maximising behaviour of the agents is thereby controlled. This is a kind of ‘general equilibrium’ approach based on automatic regulation by means of prices; their fluctuations enable all the markets to clear. But ‘in times of prosperity’ the fluctuations are slight: despite the individual actions of the agents, equilibrium supposedly maintains itself in the absence of any ‘violent’ shocks. The tacit condition is respected in this schema since a hoarding hypothesis is absurd during prosperity. Indeed, the ‘richest’ members of the productive class would put themselves at a disadvantage were they to keep their money in the coffers;1 as for the immense majority of the ‘poor’, they are in no position to save. Of course, money may be invested or lent to another agent who spends it; for everything to remain in order, the interest rate must simply remain at its natural level, i.e. low enough to allow a good price for land and for agriculture to flourish. The behaviour of the productive class as a whole therefore appears to be entirely automatic. The members of the productive class are cogs in a machine in which the controls are in the hands of the leisure class, responding mechanically to the impulses transmitted to

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them. As we shall see, there is no apprenticeship process in the markets; it is a fundamental, nonadaptive, almost instinctive form of behaviour. In short, even before the Fable of the Bees, Boisguilbert described a thriving buzzing hive: one truth is to be assumed, which is that all that the people do and deal with from morning until night, and often even at night, is solely for the purpose of drinking, eating and clothing themselves, which are all very natural and necessary things to do, learnt at birth, practised with pleasure, and in which the slightest interruption is suffered with the same violence with which one would see one’s life threatened. (1705c, p. 746) But how can this general approach of equilibrium be reconciled with an aggregated analysis of the markets? On the one hand, Boisguilbert completes his analysis through the reintroduction of the leisure class, thus giving it the hybrid appearance of general equilibrium combined with social relations, although the rentiers still appear to be absent from the aggregate analysis in five markets. On the other hand, he emphasises that in the aggregate markets, or at least in two of them (manufactured products and labour), prices are not entirely elastic, since they are downwardly rigid; consequently it seems that within this analysis certain regulation mechanisms (i.e. prices) cannot function. However, it is possible to avoid these difficulties. As far as the position of the rentiers in the macro model is concerned, a natural solution emerges since the rentiers are also consumers, and in certain cases, sellers; they are therefore distributed among the different markets according to their characteristics. This would be a banal solution if it were not remarked – as it is below – that in the markets, the behaviour of the leisure class differs from that of the members of the productive class, and that in fact certain markets are reserved for them (the demand for manufactured goods derives essentially from them, for example). It is simply a matter of making two corrections to this scenario: on the one hand the higher section of the productive class, which for convenience we might call the ‘entrepreneurs’ (farmers, land stewards, important merchants, master artisans), may also adopt this behaviour, thereby positioning themselves on the border of two worlds; and, on the other hand, the rentiers may occasionally intervene in a market in a function which is not normally theirs – notably as sellers in the agricultural products market – but their action then disorganises this market, and the confusion they create reflects an unnatural and hence undesirable intrusion into a sphere which is not their own. The other problem is more closely related to the way in which Boisguilbert’s argument is presented. After all, why did he adopt two approaches? Was the first not enough for purposes of identifying the conditions of economic equilibrium, and hence for drawing up a classification of destabilising shocks? But, and this is an aspect of Boisguilbert’s originality,

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his intention was also to describe the functioning of an economic crisis and its ramifications in the economy, and he did this by having recourse to a simplified structure of five markets, allowing him to analyse the repercussion of shocks and the cumulative effects due to the differing behaviour of the agents. The conditions of equilibrium are the same as before, but it is precisely because they are identical that Boisguilbert does not broach the subject from this perspective, which seemed to him simply to be the natural development of his other analyses. On the other hand, in this aggregated markets approach, he introduced the new hypotheses concerning price rigidities because he analyses these five markets in the context of economic disequilibrium, i.e. when he takes into account the destructive effects of the large fluctuations in agricultural prices (see above, Chapter 4). This does not mean that prices cannot fluctuate in a state of opulence, but these fluctuations are slight and, within these limits, equilibrium is stable and price rigidities are of no importance. II Just as there is a possibility of equilibrium within the productive class, an equilibrium between the productive class and the leisure class must also exist, so that the leisure class does not disturb the optimal proportionate prices; it is even in its interest, in as much as its income (rent or taxes) obviously depends on the state of the economy. But in fact the situation of the group of rentiers constantly causes a breakdown of equilibrium. In order to determine the causes of this, it is a matter of examining the conditions of harmony between classes more closely. The general principle of ‘reciprocal utility’ and ‘equally shared profit’ between the ‘producers’ in trade (understood in the wider meaning of the time) also applies to the two social groups. Harmony must be the rule there too; but does this mean that the three conditions identified in the preceding chapter must be achieved again? According to Boisguilbert, the three conditions are indeed required: proportions must be established between the groups, the tacit condition of exchange must always be respected and the agents of the different classes must see their relations as regulated by a ‘higher force’ so that none of them become dominant at the expense of the other. Of these three demands, we have already noted the second: in Boisguilbert’s examples, the landowner must spend all the income provided by the farmer. We shall return to this principle; for the time being, the first and the third conditions must be established. The rule of proportions2 between classes is formulated clearly. After having stressed the solidarity of the different social groups, which itself is an extension of the solidarity of professions,3 Boisguilbert adds that since everyone must find advantage in it, relations of equilibrium must be established between these groups:

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Destabilising shocks (I) it is in the interest of these two estates to be in constant commerce; and since the first law of labour is that it is to the advantage of both parties, without which it ceases entirely because it destroys its subject, it is absolutely necessary to maintain the balance equally, in order to share the utility and so that one of the pans of the scale does not lean too far through the addition of any extra weight, and so it does not take away the profit of the other, making it unable to continue in the future. (1704b, p. 834)

The proportions dealt with here are obviously not just related to relative prices as they are in the productive class. Implicitly, it may be a matter of trading relations between the classes, which influence the income received by the rentiers. Farm rents and rights pertaining to certain charges might be considered as the price of hiring immovable goods or as remuneration for services. But it is taxation which is targeted above all: the burden must be spread amongst all, in proportion to the capacities of each. All exemptions are an attack on the just proportion, on the harmony which ought to reign amongst the social groups. And when God commanded that tributes be paid to princes, he was speaking to everyone, not just to the poor and the defenceless who could not exempt themselves from them; or else this precept would have been useless, since it would only have applied to those who could not do otherwise. (1695, p. 628) The application of this vocabulary of ‘proportions’ to taxation is hardly surprising, and it was certainly current. Richelieu used it, also with a concern for equilibrium between the various estates of society, but without it being a question of abolishing privileges; it was simply a matter of a reasonable tax on the people or places which were not exempt.4 Furthermore, it was not just direct taxation which was in question; we shall also examine the indirect one, to use modern terminology. The remarks on these concern all the other far from negligible types of public contribution as well, such as the lodging of troops, which always leant the balance to the same side. To return to one of Boisguilbert’s favourite themes, not only did the constant creation of offices damage the officiers’ heritage; it also inevitably involved additions to the burden falling on those without privileges: a general article included in every creation is considered as being of no importance, namely exemption from the tutelle, curatelle, collection [of the taille] and lodging of soldiers, and other public duties, and often even exemption from the taille, relegating them all onto the rest of the people, as if they were an enemy country. And since these charges are purchased by the richest people, the entire burden falls on the poor. This

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abuse of proportion, amongst those who ought to contribute equally to the public duties, has the same effect on a state as would a carriage of two thousand weight, which ought to be pulled by forty horses from Paris to Lyon, were it entrusted entirely to just three. They would succumb on the first day, and another three would be used in the same way, and so on until the end. Though they would certainly all perish half way, it would not be the fault of excessive weight, but rather the disproportion in sharing it between the beasts of burden according to their strength. (1695, p. 641) Obviously these examples are only an application of more general propositions whose specific meaning and underlying theoretical principles may be identified. Boisguilbert’s numerous passages on taxation and fiscal reforms, for example, varied in content during the course of his writing, and this has puzzled some readers. Yet, in Boisguilbert’s remarks on this subject, it is necessary to distinguish the principles from the different provisional emergency plans proposed in one memoir or another. In the Mémoire sur l’assiette de la taille et de la capitation, for example, he stressed that ‘the short time remaining and the economic situation are not suitable for making and implementing a general ruling throughout the kingdom this year’ (1705b, p. 688) and in relation to the aides he specified that the proposals formulated were made only while ‘waiting for a general and complete regulation’ (ibid., p. 736). Besides, after at least a century of debate on this theme, during which the most varied positions were expressed, the reforms Boisguilbert proposed were not really original (J.-B.M. Vignes, 1909). What is essential to recognise, however, is that the principles on which Boisguilbert’s projects are founded do not vary; they relate rigorously to the basic theoretical structure; and this allows him to establish a clear classification of destabilising shocks. III Boisguilbert’s argument is simple: since harmony depends on the proportions of prices and classes, anything affecting proportions is a cause of disequilibrium. Destabilising shocks can then be classified into two categories: first, unfavourable changes in the situation of the actual person involved in the exchange, and second, those directly related to his commodity. In short, ‘when either the merchant or his product are suddenly hit by a violent, unforeseen blow’ (1707b, p. 993). There are therefore two points of possible impact, whose effects are easily identified. But it must be stressed that Boisguilbert only considers instances of violent and/or repeated shocks. As for the price of corn, equilibrium is locally stable and a degree of fluctuation in prices is required for it to be lost.

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The first point of impact is the ‘person’ involved in the exchange. His income is affected, and thus also the immediacy of his need to buy or sell. An initial quantitative effect is then produced, which, all other things being equal, is a modification in supply and/or demand. This is followed by a consequent price-effect in the opposite direction, which is the first attack on proportions. Boisguilbert comments that when many buyers or sellers are obliged to buy less or to sell more quickly, in order to satisfy some unexpected demand [an increase in direct taxes, for example] or to abstain from spending for the same reason, then the commodity immediately loses its value, either through a lack of buyers or because it must be forced on them, which never fails to ruin the merchant. (1707b, p. 993) The analysis of the second point of impact reveals a symmetrical process. An attack on the commodity initially implies a shock for its price. This initial price-effect is followed by a quantity-effect in the opposite direction. If the product itself is attacked by a particular blow, though it was previously sold at a current price at a profit for the merchant, to bring the seller out of loss it requires a price rise because of what it has been burdened with unexpectedly, such as a new tribute fee to pay. Since the buyer will not hear of this, the merchant’s need to sell in order to survive day by day forces him to sacrifice his future ruin to the present moment. (ibid., p. 994) With this distinction, made in the Dissertation, we note that all the pernicious effects criticised by Boisguilbert may be classed in one of two categories. In the first category there is the regulation of the grain market, for example, or the ‘extraordinary affairs’ concerning the charges. The second category includes passage fees, indirect taxes and other controls of weights and measures. It is equally clear that however inadequate the modern designation5 of direct and indirect taxation is (where would one class the gabelle?), its application to the reality of the Ancien Régime is not entirely unjustified. Ill-conceived direct or indirect taxes correspond respectively to blows of the first and the second type. The gabelle is included in the first group: it hits its subject’s income directly, possibly putting them in a situation of having to sell more or buy less of commodities in the other markets.6 Finally, it is clear that if a new indirect tax affects a particular commodity violently without the seller allowing it to influence its price, then his income suffers, thus corresponding to the first impact situation. In relation to the optimal situation of the state of opulence, neither the system of relative prices nor the structure of expenditure must be affected. Hence the principal precept

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presented by Boisguilbert, namely that taxation must be neutral in relation to prices and expenditure, that it must be ‘pulverised’, in other words distributed equally and proportioned according to the capacities of each agent (his income) or each object (its price). any individual tax on a single commodity is fatal to the whole state because rather than sharing the burden, the other commodities leave it to that one commodity alone, and so for lack of insight, it ruins them all, since everything in the state is linked by solidarity; this system exists instead of spreading and sharing amongst all a personal tax in relation to the general ability of each subject, dividing the burden by sol per livre on each item, which is essential for preserving the whole. (1707b, p. 1009) a personal tax for the prince which is shared justly, distributes it over the entire mass of the state, by sol per livre according to the strength of each, so that the burden is almost imperceptible, as with all pulverised bodies which produce no violent effect when they fall on robust bodies. (1706, p. 802) As a result of all of these considerations on the need to maintain proportions between classes, the importance of the discussions devoted to taxation in Boisguilbert’s writing are understandable (they will not be discussed further here). It is enough to reveal the logic: there are many examples of these ‘executioner’s of consumption’, of absurd rights hindering trade,7 not to speak of the incredible regulation of tailles which ultimately do indeed appear to justify Boisguilbert’s apocalyptic judgement that ‘one can be assured that if demons had held a council to devise a means of damning and destroying all the people of a kingdom, they could have set up nothing more suitable for achieving this end’ (1707a, p. 886). IV We now turn to the third condition: amongst the classes, an alternative mechanism to free competition must be established. But we already know that this condition cannot be fulfilled and our future analysis confirms this. The rentiers are a dominant group, a minority of whom possess the power and are not subject to any ‘coercive force’ ensuring equilibrium. Of course, their behaviour is part of a system of rules, but one which is very different from the rules of competition: they are the rules of civility and politesse (politeness). In conforming to them their conduct inevitably leads them to adopt an attitude which multiplies destabilising shocks. Hence Boisguilbert’s repeated attempts to convince this class to abandon the shortterm attitude which ruins it in the long term:

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Destabilising shocks (I) the individuals who believe they are making their fortune, and who do so even apparently in such a universal collapse, by fishing…in troubled waters, climb high only for their fall to hurt them all the more. Nature, which sees them running ahead of it, while pretending not to see them, eventually does not forget them in its vengeance; the credit it gives them is sold at a great price, since they will never be more than wretched while they believe that they can be rich alone. (1707b, p. 1000) If then the rich understood their own interests, they would relieve the poor of taxes entirely, which would immediately form many prosperous people; this would inevitably lead to a great increase in consumption, which, spread over the whole state, would compensate the first advances of the rich three times over, since it is the same as a master who lends his farmer grain to sow the earth, without which he would lose the harvest. And the opposite practice in the past has cost these powerful men, all in all, six times what they claim to have gained by foisting all taxes onto the wretched poor. (ibid., pp. 1006–7)

However, one cannot help but think that Boisguilbert was shouting in vain and that he too believed, along with Nicole, that ‘it is wrong to claim that discourses contrary to natural inclinations and common impressions can have much effect’. There was one source of hope, however: the king. Through his position he was the most fragile, but also the strongest, element in the system. Only he could act as the regulating mechanism missing from his class, through the ‘management’ of the state, of course, but also through the example he could give his subjects. No doubt – his attitude alone proves it – Boisguilbert shared the traditional view that ‘there was never a republic in which health or illness did not flow from the head to all the members’ (J. Bodin, 1568, p. 117). V A simple classification of destabilising shocks has been established; it is now a matter of deepening the analysis and seeing why these shocks are inevitable. Almost all the shocks result from what might be termed imperfect information. Of course, in the first place it is a matter of faulty information about the ‘real interests’ of the leisure class, but there is nothing new in asserting this. This lack of information about the real cogs of the economy and the conditions of equilibrium derives, fundamentally, from the very structure of society. The separation into two classes and the phenomena it engenders, in other words, politesse and money, form an opaque veil which never fails to mask reality.

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In this context, the short-term individual interests of the rentiers cause general poverty, as opposed to the public benefits procured by the interests of the productive class; they also open the way to what Boisguilbert terms ‘indirect interests’ whose even more devastating effect is likened to the ‘curses of God’. This is a constantly recurrent theme in his writing. To pick out only a few restrained expressions which figure in the first published work, the Détail de la France, it will be noted that ‘consumption’ was destroyed because of ‘personal interests, which have meant that Messieurs les ministres have been surprised when edicts have been obtained from them which are equally damaging for the king and the people’ (1695, p. 587). The two causes of this decrease in ‘consumption’ are then clearly distinguished: Essentially there are two which, far from being the effect of any kind of public interest are, on the contrary, produced only by individual interests . . . Consumption ceased because it became entirely prohibited [because of the uncertainty of the taille] and absolutely impossible [because of the aides and customs fees]. (ibid., p. 590) This is therefore combined with another favourite theme, the ‘surprise’ of the ministers. The advisers of the governors deceive them although they do not profit individually as to one fiftieth of the evil they do the body of the state, the surplus of goods they remove being entirely annihilated, however small it might be compared to the evil, their self-interest prevails over public utility; and today this is established as an ordinary profession, fulfilled by the most protected people. It occurs in such a manner that, although the disorders are quite obvious, and the king has a tremendous interest in stopping them, not to speak of the people’s interest in doing so, until now, nobody has dared to declare war on them, or rather, on their manoeuvres. (ibid., p. 625) The argument has two stages. First, the position of the leisure class as a whole within society and the reasons for the unsuitability of its acts are considered. Then follows a consideration of the specific problem of the group which comes from this class and which holds the reins of the state. VI Once again Boisguilbert’s analysis is based on a relatively simple idea: the appearance of a leisure class simultaneously blindfolds its eyes. He says that it is relevant ‘to describe what today is termed politesse through a very poor usage, after which there will be no difficulty in believing that such pernicious effects are born from such a cause’ (1705c, p. 765).

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This politesse ‘consists principally in four articles’, two of which are connected more specifically to the government and will be analysed below. As for the general behaviour of the leisure class, the first two characteristics indicate how it is led to neglect the public interest in favour of its own immediate interests. The first characteristic is ‘an extraordinary magnificence in houses, in the town as much as in the country, in clothing, furniture, style, equipage and at table’ (ibid.). Boisguilbert cannot deplore this characteristic fundamentally since it encourages spending and is the origin of the professions related to the superfluous, which must now be preserved; but it does make the economic structure more fragile. He criticises the determination the leisure classes expends on procuring this luxury, and the time spent on it, thereby neglecting other activities: for this first article which is magnificence, since it cannot be maintained amongst the infinite members [of the state] without constant application in all estates, it acts as so many attacks or reductions in the application required by the more serious occupations. (ibid.) These other activities are not described; they might involve the administration of the state, important trade or the good management of property, particularly agricultural property. The second characteristic of politesse is more precise, and produces more damaging effects. It ‘is a consequence’ of the first, and consists in ‘procuring the means for this expenditure without causing an outcry amongst the merchants’ (ibid.). In other words, the financing of the luxury and magnificence of the leisure class precedes all other concerns, and each time a public good finds itself in the balance with this need, it is of course the public good which is sacrificed. In effect, to maintain magnificence, wealth is needed in proportion, and it is so many enemies to the integrity and disinterest required to handle public affairs, since it is very difficult to condemn oneself to decreasing one’s spending, style and table each time that the preservation of such an expense, which is presented as a necessity, finds itself compromising the interest of the people, as happens daily. (ibid., pp. 765–6) Thus, the leisure class, or a part of it, potentially forms a pressure group which tends to encourage measures which go against the public interest. To these first two characteristics which are hardly original, there must be added what Boisguilbert says about the phenomena of opacity linked to the monetisation of the economy. The appearance of money, linked to classes, does indeed play two very distinctive roles

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whose analysis emerges clearly amongst the pitfalls posed by the advanced state of society. Explicitly, money inverts all natural roles in the state and it slips from being a ‘servant’ to become the ‘tyrant’ of trade. Implicitly, it is money which enables the idle accumulation of wealth, i.e. hoarding. The first phenomenon destroys proportionate prices, the second destroys the tacit condition of exchange and thus, ultimately, proportions. Both are evidently linked to the nature of money, which acts as an opaque veil. Let us begin with the implicit role of money, whose effects are the most well known. The leisure class fundamentally has less of a propensity to consume than the productive class. Once money is in its hands, it is uselessly immobilised at the bottom of coffers, and because of the lack of consumption it is not even recycled through loans or investments. Since they only receive money, the leisure class is not aware of the need for its uninterrupted circulation. It thereby breaches the tacit condition. what we have said heretofore should be recalled, namely that an écu in the hands of a poor man or a humble trader has one hundred times greater effect, or income, than in the hands of a rich man. This is through the constant, daily renewal which this modest sum receives from the one, which does not occur with the other, in whose coffers far greater quantities of money remain idle, and consequently useless, for months or entire years, either through the corruption of a heart blinded by avarice, or in expectation of a larger expense. Now, the king and the body of the state draw no utility from this guarded sum, and it acts as so many thefts to them both. (1707b., p. 1006; see also ibid., p. 997) The remark about ‘the expectation of a larger expense’ should not be misconstrued. In the Détail, Boisguilbert remarks that the ‘rich’, ‘undertaking only large affairs, wait for the sum to be furnished for a long time, even at the best of times, before bringing out the money, and this is always very detrimental to the state’ (p. 621). The context indicates that this only concerns the purchase of land, charges and the establishment of rents, in short, the goods possessed essentially by the leisure class or marking the passage of an individual from one class to another. It does not concern the regeneration of advances for production by the different types of entrepreneurs, which, incidentally, are regularly put back into circulation, at least during prosperous periods. There is therefore an initial cause for the breakdown in the equilibrium between proportionate prices of the different commodities. Explicitly, money contributes to breaking proportions through other means, either by provoking a breach in equilibrium prices for some commodities (primarily agricultural), or by causing a departure from the proportionate price of money via the interest rate. Money, a general equivalent which should never be more than a means of circulation,

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creates the illusion of constituting real wealth, since anything can be acquired with it. This illusion provokes an inversion in the natural order: commodities, which ought to be everything, are nothing; and from being the ‘servant and slave of trade’, money becomes the ‘tyrant’. It is as a result of this tendency that money took the first step of departing from its natural role: the equivalence it ought to have with all the other commodities, to be ready to form exchanges at any moment, instantly received a serious blow. (1707b, p. 979) Money is demanded on its own account, as a store of value, a symbol and guarantee of wealth. This can be true for the productive class, but only during periods of depression; however, it is always the case for the leisure class, and this behaviour ultimately ruins the proportions indirectly due to hoarding, or directly through the untimely and unsuitable action of rentiers in markets where they usually have no business. Indeed, all means are good for procuring this ‘fatal metal’. The rentier does not content himself with conserving what is paid to him as ordinary income; also he has little interest in keeping in kind the fruits of his own domain or those provided by his tenant farmers. He gets rid of these at all costs, in the true sense of the term, converting them immediately into specie. Although it is indirect, he thereby unexpectedly adopts the behaviour of a seller in the agricultural markets, disorganising them and breaching proportionate prices. For, from the moment that it [money] dominates all things more precious, to such a degree that a very small quantity of money is preferred four times over to other goods, compared to previous time and prices, one can be sure that far from being the link of trade, in accord with its nature and vocation, it becomes exclusively the executioner and destroyer of trade. (1705c, p. 680) This mechanism is described well in the Dissertation: A voluptuous man, who with his entire life has barely enough time to satisfy his pleasures, scorned the idea of keeping his house and reserves full of grain and other fruits of the earth, to be sold at the current price in the time and the season; this care, waiting and worry does not suit his lifestyle; less than half the money, or even a quarter of it, suits his needs better, and his voluptuous pleasure are served with more secrecy and haste. (1707b, p. 979)8 The distancing of ‘private’ life (see below) in which the rentier finds himself, and the opacity introduced by monetary relations thus mask the reality of the operations of

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production and exchange, and consequently the conditions of their optimal level. Boisguilbert’s comments are symptomatic: ‘money acts as a cloak for the least as well as the greatest absurdities; under this cover, the impossible is presumed and demanded’ (1707b, p. 984), particularly in regard to taxation. The situation is all the more dramatic in that the damage caused by these actions merely reinforces the unnatural role of money and accentuates the depressive effects. By inducing the ruin of trade and ‘making everybody mistrustful’, they prevent one ‘from exchanging by means of credit and bills’ (1707b, p. 980). The other means of circulation disappear, thereby reinforcing the role of metallic money. Specie is scarce because since its nature is to guarantee the tradition of exchange when it does not take place immediately, and since this function is shared with many other effects . . . their destruction places the entire burden on it alone. And though it is permissible to increase the pace of its exchange through this increase in occupation, it is actually slowed down by it. (1704d, p. 970) The ruin of producers and the state follow; in general, many people’s need to procure specie provokes a rise in the interest rate and usury. Finally, this attachment to money also facilitates theft, fraud and bankruptcy. First of all theft (this idea is as old as any): it is easy to steal all a man’s possessions in monetary form, while it would be impossible otherwise.9 Bankruptcy and fraud have more insidious effects, for they undermine the mutual confidence necessary to contractors, thereby completely ‘disrupting’ trade by casting suspicion on the ‘bills’ of all merchants, after having also contributed to upsetting the optimal system of relative prices. Boisguilbert explains that it is well known that for people who declare bankruptcy, their technique is to make use of a reputation acquired through good or evil to buy on credit on all sides, at any price because they are certain that they will never pay for a thing. Afterwards they immediately sell these objects for money, be it at half or a third less, and they continue this fraud until the bills run out, when they transfer all the bills under supposed losses which have to be believed, since to believe otherwise involves an eternal lawsuit which is more ruinous to those who lose than bankruptcy itself. The fraud is what is most upsetting in relation to the body of the state, given that the high price this places on money through the flood of transactions, which although they are criminal, take it sky high, as well as causing a simultaneous collapse on the other side of the balance, for the commodities. One [money] has the price of precious stones while the others [real commodities] are no more than dust, through the

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Destabilising shocks (I) prodigality with which it is used in order to achieve criminal objectives. Though these actions are encountered amongst only a few individuals, they are nonetheless contagious for the entire mass. (1707b, pp. 980–1) VII

While the most destructive effects of money are linked to its screen-like nature which prevents a clear awareness of economic phenomena and facilitates destabilising behaviour through the illusion it creates, the analysis of governmental decisions shows them perpetuating this effect. And the effect is doubled by an even more acute information phenomenon. To understand this, one must consider the other two characteristics of politesse; one concerns relations between the two social classes, the other, the bonds within the leisure class. The third characteristic of politesse consists in an extreme material and cultural divide between the two classes of society. It involves a ‘great distancing from any contact with the humble world of artisans, merchants and labourers, it being unworthy of a man of position to consort with these sorts of people, though they alone enrich a state’ (1705c, p. 765). As might well be imagined, a reciprocal relation of profound misunderstanding and incomprehension ensues from this radical divide. But at present, there is so great an abyss between those brought up in dignity and the people that no more is known by one party about what happens in the other than is known in France about what takes place in China. (ibid., p. 766) Boisguilbert stressed that the problem was extremely serious, and all the more so since the effects of the fourth element of politesse were added to it. For the consequences of the leaders being cut off from the nation provoke a need for mediators between the two parties. The vocabulary Boisguilbert employs to describe this is very telling: he presents himself as the lawyer (1707a, p. 881) of the people and their orator (1704b, p. 871), since they necessarily require interpreters and ambassadors (1705c, p. 768). Even the subtitle of the first Factum de la France (1705c), Le Nouvel ambassadeur arrivé du pays du peuple (the newly arrived ambassador from the land of the people) (p. 741) underlines this constant preoccupation (cf. also, pp. 772, 773, etc.), as does another striking passage from this same work: So that, since the author of these memoirs establishes himself today as a new interpreter and extraordinary ambassador of this unknown country of the people, having recently

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arrived in the civilised land, which until now had known the country of the people only through the deception created by self-interest, suffered and unrefuted by the same causes, it is no surprise that he speaks so novel a language. (ibid., p. 769) As has already been noted, the consequence of this incomprehension is the total schism between ‘theory’ and ‘practice’, which was so damaging to the state. Leaders manage a world which is foreign to them: From the highest noble seigneur to the lowliest labourer, certain barometers of prosperity exist which are evident to those who are practised in private life, but which are impenetrable for mere speculation, as is the case of all the Messieurs les intendants in the provinces, however well intentioned they may be. They are all Parisians . . . and consequently not fit to have a knowledge of a state, since in Paris one may possess very great wealth without having a foot of land, which is considered the least of all goods . . . ordinarily in these quarters the only attention paid to the countryside is limited to the embellishment and decoration of country houses. (1707a, pp. 944–5) This is a recurrent theme.10 While the ‘theoreticians’ have no practice, ‘practitioners’ are incapable of theorising: the former are cut off from real, concrete affairs (‘private’ life); the latter have doubtless lost the habit of self-government, since they have always been directed. To avoid error it would be a matter of allying the two, but this ideal is not easily achieved:11 since true knowledge about grain is a necessary consequence of a continual combining of practice and speculation, it can be said that for over forty years these two approaches have been separated by so great a gulf that the possession of one of them through the individual’s situation has acted as a formal barrier to ever possessing the other. (1704b, p. 877) The choice of provincial intendants is therefore essential, since it is they who collect and circulate information. Boisguilbert claims that there is no escaping the fact that the choice must made of ‘faithful interpreters from the area’, with a good knowledge of the workings of economic life. It is essential ‘to be curious to recover and employ high intellect . . . having had practice in private life’ (1703a, p. 297) and this is ‘independent from birth and employment, assuming it to be unquestionable that the qualities of intellect and merit are never dependant on the possession of titles and wealth’ (ibid.). The Third Estate is very large and includes men of quality: why not elevate some of them?

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Destabilising shocks (I) Although, unfortunately for France, people born with wealth have a great ignorance of these details . . . since, like all others, this art is only learnt through practice, that is private life – on the other hand, never at any time or at any place on earth was there a Third Estate with subjects so skilful and enlightened as those found nowadays in France, since nature, art and labour which people of quality lack have all contributed to them. (1706, p. 811)

However, recourse to the productive class is not a panacea. Boisguilbert recognises this: one does not place a ‘safe bet by choosing subjects from the Third Estate’ (ibid., p. 812). To be from the Third Estate is not a guarantee in itself, but the selection is extremely wide, and this choice should only involve those who have ‘been publicly recognised as competent in their profession and in a profession of difficult tasks’.12 Finally, the fourth characteristic of politesse complicates the question even more. It concerns the internal relations of the leisure class, which, as the moralists of the century stressed one after the other, are founded on false language and dissimulation. It ‘consists in constantly disguising true sentiments, betraying their knowledge of the truth, such that when it is a matter of playing court and contributing to their own fortunes, white is called black and black white’ (1705c, p. 765). The language of the court and the salons dominates the facts and figures of the merchant’s truth. It plays the same role in regard to ‘truth’ as money does to commodities. In this context it is understandable that clear information, which is already difficult to obtain, becomes impossible to find. What sort of trade or wealth could be acquired by a merchant who sent nothing but lies to his correspondents and who received advice of a similar nature? If, when he had sent a commodity to a far away country where it could not be sold, they did not write to him immediately to tell him not to buy any more there and to sell what remained in his shops? Would he not be forced to accept bankruptcy? And yet this is what we see happening daily in relation to the people, with second order ministers believing they are demeaning politesse if they warn the top ranks that there was surprise at the publication of an edict, and that it must be revoked, or it will cost the king and the people a considerable amount. (ibid., p. 767) These problems of information occur not only at the highest level of government, but also at all levels of the administration of the kingdom and, in particular, Boisguilbert stresses that it exists at the level of the intendants. Who is sent to the provinces in this role?

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young men, born and raised in Paris, almost always like princes . . . in other words, subjects nourished in their pleasures, in plenty, praise and applause, with no practice, experience or use of anything at all, except having ruled with an iron hand everywhere (1706, p. 810) These men humour some and allow themselves to be corrupted by others; their protection is acquired ‘in money, because there is no saint who would not greatly appreciate a candle. Admittedly a few of these Messieurs are not entirely in this situation, but they all share the great ignorance of the interests of trade and farming’ (ibid.). VIII It is not surprising therefore that in this opaque social and informational environment, where there is no communication between the different elements of the social machine,13 serious consequences inevitably arise. They are of two sorts. First of all, they may result in a rash of inappropriate measures and regulations. They also give rise to the birth of a parasitic social group (the ‘indirect interests’) which interrupts the natural cogs, aggravating the disfunction for their own greater benefit, at the price of general ruin. Let us consider inappropriate measures first. It is significant that the image of Babel arises in relation to them: never in the confusion of languages, when they wished to build this famous tower, was there such mistake with respect to the trade of labourers as has existed for the last thirty or forty years amid the regulations, edicts and declarations. (1705c, p. 777) Once again it is a question of language, and hence information and communication which are emphasised. The example of the main direct tax, the taille, is suggestive and confirms that for Boisguilbert the analysis of the monetary phenomenon should be placed at the same level. He thought it impossible that an edict for the regulation of tailles could have been deliberately issued, ordering the man who collects thirty measures of grain on his land to pay forty, while he who collects two hundred gives just four. Reasoning in real terms would have never allowed such an absurdity, but its formulation in monetary terms made it possible, enabling all kinds of abuses: Since such an impost, and its execution, would be terrifying to behold, it had to be masked, and money does this marvellously well. It hides all the horror of such an action from the elevated people who give the order, because . . . they have no idea that a man cannot pay a sol, tribut or any other due, except through the sale of the produce

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Destabilising shocks (I) he owns; and thus the demand for money has necessary limits, instituted by nature, which cannot be violated without producing a terrible monster. (1707b, p. 983)

Second, the inappropriate measures, taken in good faith through a lack of information, or knowingly under the influence of the ‘individual interests’ of the leisure class, precipitate the degeneration of the polished and magnificent state by inevitably provoking financial difficulties, particularly for the state. The financiers, traitants and other partisans14 who, in various ways, advance money to the king and deal with some of the affairs of the state in return for a usurious rate of interest and a disproportionate remuneration in relation to the tasks undertaken, were thereby introduced. They are the ‘indirect interests, who do not have a natural right to the thing’ and ‘who care little for what the wealth which they could never have acquired legitimately costs the entire state’ (1707b, p. 1001). In Boisguilbert’s opinion, they are the true scourge of God, and it is they who ruin proportions and disorganise the markets, charging one commodity after the other with heavy indirect taxes which successively cause the depression in all branches of the economy: ‘It is through the traitants, too little attention to the taille, and too much to the grain trade, when it was essential to leave the economy to nature, like everywhere else’ (1707a, 892). Harmony was disrupted by attacking or weighing down individually all commodities one after the other, through the activities of the partisans. When one type of good was destroyed, so that there was nothing more to do for the entrepreneurs who caused this desolation under the pretext of bringing money to the king . . . the same measures were applied to other goods which were not yet crushed. (1707a, p. 892) The analysis of this point is a parallel to that of the reversed role of money and the illusion it causes. The natural order is no longer respected. But once the order is upset, the phenomenon results in reasons for maintaining it and for a more profound rooting of it in society and in the minds of men. The usual scourges (wars) or natural ones last only for a limited time, after which a ravaged country gathers itself together immediately, often better than before. . . . But this is not the case with these people [the femiers of the king]; in a lease, when the most apparent or most obvious has been destroyed, the successors can only benefit from it by increasing the dues which, by diminishing consumption still more, consequently increase the ruin of both the people and the king. (1707a, p. 922)

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Consequently, they are maintained in order to provide new advances. It is always the same scenario of misinformation and a misreading of reality. Through these unacceptable manoeuvres, the traitants and financiers pass themselves off as indispensable: ‘covering themselves with constant confusion, [they] obscure any perspective on the cause of poverty, and close off all avenues for remedying the situation’ (1695, p. 644), which is only possible through people’s ignorance of the true realities. This ignorance is feigned by some,15 but is real for the many who fall into the trap of a knowingly orchestrated obfuscation on the level of language – the financiers impose themselves on the public only through the obscurantism of their vocabulary (for example, see the various names given to a mass of complicated duties: 1707c, pp. 821–2).16 ‘This is what finance, which imposes itself so strongly on simple people through its obscurity, is’ (1707c, p. 824). This great word financier means nothing other than an income administrator, although through its singularity, this term impresses the simple and ignorant majority, leading them to believe the absurdity that it is a very rare science, requiring a lengthy training to acquire, and that anyone without great experience could not hope to serve the King without ruining it, though it is quite the opposite. (ibid., p. 819) And this is proven by the work of two ‘ignoramuses of finance’, Sully and Richelieu. One final comment should be made to conclude this topic. Boisguilbert blames this group of parasites in particular, thereby following a common opinion17 which was encouraged by the monarchy who saw the advantage of having a scapegoat by its side. Once again, Boisguilbert’s originality is to have linked this theme to his general approach. One must therefore also be careful not to misconstrue his meaning when reading remarks such as the following: ‘If a few individuals were not so magnificent, the rest would not be so miserably poor’ (1707b, p. 1004), or when he declares that he speaks ‘for fifteen or sixteen million people . . . against two or three thousand . . . at most’ (1705c, p. 742); he should not be transformed into the revolutionary that he is not. He is not criticising the leisure class, he is simply accusing the parasitic group of ‘indirect interests’: ‘one cannot say the same things of sovereigns’ (1707b, p. 1001). ‘We are speaking for the greatest King in the world, for whom we are ready to create one hundred million more in rentes than he receives presently’ (1705c, p. 742).

6 Destabilising shocks (II) Market strategies: the propagation of disequilibrium

I The final stage of this study is a description of the functioning and propagation of economic crises. Having analysed destabilising shocks in general, the details of their consequences must now be taken into account. With this goal in mind, Boisguilbert expanded his horizon to include all economic agents. He states that in reality informational problems help to explain all behavioural patterns, not just that of the rentiers. The question of the information of agents also concerns the formation, nature and economic effects of their expectations in the various markets. We must explain why all behaviour is stabilising in a system of free trade. Finally, in conclusion we shall return to the issue of the role of the state and economic policy. In order to understand the evolution of a depression, however, it is necessary to recall a few facts emphasised previously. First, the importance of the agricultural sector, for the food of the vast majority of the population, both rural and urban, as well as for the income flow: the direct rents (received by landowners in the form of farm rent or products; various rights) and the indirect rents (via the intermediary of taxation and the state). By grafting the circuit of income onto a productive structure which ought to be one of general inter-dependence, the leisure class amplifies the propagation of disequilibrium. This is why, although he did not deny that a depression could originate in another economic sector, Boisguilbert in fact analysed only the greatest disruptions which were caused in and by the agricultural sector. Therefore there is in fact a hierarchy in the crisis amongst the various sectors. But to begin with, we have to return to several ambiguities in the texts, most of which have already been noted, in order to avoid a problem later. It appears that without exception the rentiers intervene only in some markets, primarily the ‘investment goods’ and loanable funds markets, but also the manufactured goods market. Indeed, every time Boisguilbert selects examples for this subject, he speaks of manufacturers and merchants of brocade, wigs or carriages. In many passages he seems to reserve the ‘superfluous’ in regard to (fundamental) ‘needs’ for the landowners alone: ‘grain has two aspects which produce two quite opposite effects which are constantly at war, namely, to nourish man and to furnish

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the land owner with the surplus for his needs’ (1704b, p. 858). But it should be recognised that this point is not clear: in other texts Boisguilbert seems to acknowledge that there can be a ‘superfluity’ in ‘all estates’ (1707b, p. 985), even if this surplus differs considerably in quality and quantity from one condition to another. Next, in the leisure class, the rentiers proper must be distinguished from the state. For better or for worse, the state is associated with the ‘indirect interests’ it gives rise to. Finally, like the dominant class, the productive class is not homogenous. Above the great mass of field and town labourers there is a group of ‘entrepreneurs’ whose behaviour is often similar to that of the rentiers. The servants of people belonging to all estates are classed amongst the workers of the productive class, primarily those of the towns. These details had to be stressed since they explain certain specific market operations, given that the rentier does not have the same urgent need to acquire a brocade, wig or carriage as the labourer has to buy grain or bread. Nevertheless, in the analysis, social groups are replaced by the more neutral categories of buyers and sellers. It is these buyers and sellers who, possessing information and forming different expectations, and thus strategies, impinge on the markets. However, the social divide does not disappear entirely, in as much as two behavioural types with a different nature and economic impact can be discerned. II The two behavioural patterns which can be identified in the texts may be characterised in the following schematic manner, and will be illustrated by the description of the real functioning of the markets. We shall name them simply ‘behaviour 1’ and ‘behaviour 2’. They can be differentiated in a number of areas (see Table 1). For both behavioural types, it is important to note that the information the agents receive may be false. But all perceived information is automatically and mechanically taken as being true, and is taken into account by each agent in his planning. In what follows, we shall examine the triggering, propagation and deepening of an economic crisis through the connections between different behavioural patterns. III

We have already encountered the principles of the cyclical behaviour of prices and quantities in the grain market, as well as certain necessary conditions for the propagation of fluctuations onto the rest of the economy. However, the causes of the amplitude of these fluctuations, which are the true root of the evil, have not yet been fully specified. We already know that,

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Table 1 Behaviour 1

Behaviour 2

1. Information available to the agents: This relates to quantities of commodities (flow and stocks) and to prices in the markets.

This relates to the income flow of the different categories of agents, be it real or imagined.

2. The agents’ expectations: This relates to prices. But the determination of prices takes into account everything which may act on them, thus all the available information referred to above.

This relates to the solvency of the agents, taking into account all available information which may affect their solvency.

3. The agents concerned: The buyers and sellers. But the seller’s behaviour is studied the most frequently. The members of the leisure class do not appear here, or if so, only at the margins.

All those who may keep aside a saving, i.e. who are not constrained to spend all their income. These are the rentiers, and to some extent the entrepreneurs of the productive class.

4. The agents’ strategies: Arbitrage between the different types of spending on goods and services: a strategy of accumulating or liquidating stocks of commodities (for speculation or as a precaution). The seller’s behaviour is primarily speculative, the buyer’s behaviour is precautionary.

Arbitrage between spending (consumption in the widest sense), investment and, especially, hoarding. A strategy of accumulating or liquidating precautionary money cash balances.

Hence: movements of stocks and flows of goods in relation to prices, be they real or anticipated.

Hence: movements of stocks and flows of money.

5. The markets immediately concerned (i.e. without taking propagation phenomena into account): Three markets for goods and services: agricultural products, manufactured goods and labour. 6. The role of different behaviour patterns: Movements of stocks and flows of commodities: quantitative amplification of destabilising shocks in a given market.

Two asset markets: loanable funds and ‘investment goods’.

Movements of stocks and flows of money: velocity of propagation of shock effects via the contamination of the markets (spill-over effects).

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contrary to common opinion, Boisguilbert asserted that great differences in climatic factors had virtually no part to play in this, and that this erroneous belief at the base of pernicious regulation was in fact responsible for the faults it claimed to correct. Climatic uncertainty is not destabilising of itself; it is in fact the behaviour of the agents in the market which cause these fluctuations in certain conditions. And it should be emphasised that, by contrast, this same behaviour induces plenty and stability if it occurs in a different environment. The behaviour of the agents itself cannot be manipulated, so that it is necessary to create exterior conditions permitting the neutralisation of its destructive effects. For the time being, in a system of market regulation and non-pulverised taxes, ‘devastating high prices, not to say famines’ are simply the effect of the brutality and stupidity of the people, and absolutely not the infertility of the land, in a country like France, although it lies at their origin. It is this confused mob of people without heads or brains, who loop the rope which strangles them. . . . We have all seen ferry boats filled with people, where at the slightest hole which appears allowing water to enter, but which could easily have been stopped up, all jump as a crowd to the other side of the boat, thereby tipping it over so that they all drown (1704b, p. 859) If therefore everything ‘is violent and extreme’, it is ‘because everything is exposed to public fury, or rather to that of a blind and tumultuous crowd which does not know what suits it, or what is against its interests’ (ibid., p. 862). All price and quantity trends are therefore amplified and, under the effect of minor causes, a market in which large transactions are ordinarily made suddenly finds itself subject to extreme variations: a market . . . where five hundred setiers of corn are ordinarily sold every week, cannot stand an increase or decrease of even twenty without the grain receiving a very considerable rise or fall, increasing before your very eyes, doubling or tripling all previous effects. (ibid., p. 859) If, for example, the highest price is seven or eight times the lowest price, it is wrong to say that there is seven or eight times as much corn in the market in a depreciating situation than in one of high prices. To return to the image of the scales, it is not true to say that there is nothing in one of the trays when a slight weight would suffice to re-establish equilibrium: This difference of seven degrees in the price of grain implies that the farmer is seven times less eager to sell in high prices and, during a depreciation, seven times more

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Destabilising shocks (I) obliged to get rid of his produce, pushed either by his master or by self-interest, which forms a counter-weight. (ibid., p. 860)

How is such a phenomenon possible? It is made possible through the interplay of the agents’ different strategies in a system of market regulation. Based on partially true or false information, phenomena are amplified by the expectations linked to them, and thus a sterile year, to take the instance of a food shortage [disette], ‘which is often really no more than an idea’, has ‘real consequences’. A climatic change, be it real or imagined, provokes predictions about market supplies. From the moment one of these upsets has produced its effect, some earlier, and others later, then the alarm spreads amongst the people who fear that the year will not be prosperous or that grain is in short supply in many areas. (ibid., p. 861) The rumour amplifies immediately: ‘as in all public rumours, the evil is imagined as being far worse than it is’ (ibid.). A double behaviour of precaution and speculation then enters into play. The buyers, predicting shortages, and thus large price increases, wish to establish precautionary stocks and so they increase their demand. As for the sellers, seeing that the situation is favourable to them, they accentuate it by circulating false information allowing them either not to pay the landowners, or to pay only a little, and increasing their upward pressure in the market by simultaneously creating speculative stocks. Obviously a totally disproportionate increase in price in relation to the initial disturbing cause results from this. The disorder starts with the countryside, where the inhabitants have a two-fold interest in spreading the rumour: the first is to raise the price of grain; the second is to avoid paying their masters on the excuse, which is usually untrue, that they have not gathered what is required to sow their land and feed themselves and their families. The rest of the humble world, which is very well-inclined to adopting a plaintive tone . . . adds to the common report, without knowing the facts and without examining them, which they are incapable of doing. Thus, two effects immediately follow the first: in the hope that the crisis will increase, all the grain sellers abstain from providing the markets in the ordinary way, not forgetting to obtain a delay in payments from their creditors, with the promise of paying them much more in the future; secondly, those who ordinarily make their provision of grain from week to week or from month to month immediately rush out to provide for themselves for the entire year, or even longer, all in the panicking terror

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of a crisis which as a matter of fact is not great at all; except that fantasy and error lead them to believe in a falsity. (ibid., p. 861) Later in the analysis Boisguilbert confirms that the strategies and expectations of the agents have a determining impact, through the device of the stock/flow link in relation to the price. The agents can very well be mistaken in their predictions, and the year may turn out to be a good one. The producers are then usually in a position to artificially maintain the increase in prices to avoid their collapse, simply by restricting the flow of offers to a level below the real quantities produced, and by maintaining stocks in the barns: should the year prove to be plentiful, and the people mistaken in their conjectures and ideas, the misfortune of an increase in price which has taken root, does not for all that cease, at least partly, because when grain prices are low farmers and merchants would avoid selling if the need to pay debts were not on their tail; which means that, in a period of low prices, they are obliged to sell all since a great deal of grain is required for a little money; they escape this situation through a high price which enables them to sell less to satisfy their obligations, thus providing the markets with less. To return to the scales, they have lost their equilibrium here; for the markets alone are decisive in this situation, rather than the quantity of grain, whatever it is, and which may be either in the granaries or in the barns: twenty sacks more or less in the market decides the fate of the grain price, while it would not have felt any change if they had been kept in these barns. (ibid., pp. 861–2) IV The situation is entirely different in a system of free trade: the same behaviour by the agents is stabilising then, and only very small variations in price may temporarily occur. Precaution and especially speculation, find themselves caught, so to speak, in their own trap. It is enough to know that one can buy or sell without any particular difficulty, either abroad or in a neighbouring province, for agents to take this information into account in their planning, even if this purchase or sale is effectively nil or very slight compared to transactions in the local market. Consequently, the quantitative effect does not need to be large to produce an appreciable price effect. Through the device of expectations and stock/flow relations, the mere possibility of entirely free trade is enough to moderate the fury of the buyers and/or sellers thus making their behaviour in the markets reasonable.

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As far as the sellers are concerned (1705c, p. 786), ‘the mere permission to remove grain’, i.e. to export it from the province or kingdom, means that markets are not swamped by an excess of offers during periods of plenty, even if in matter of fact the surplus remains in the barns. Inversely, during periods of shortage, the sellers’ demands are less extreme as a result of the constant possibility of importing. we assert that even before the slightest amount has left the country, the mere permission to export grain immediately leads to a price rise, and that thereafter the higher price rises further of its own accord without any foreign ministry. This is because those selling at a low price do so only by necessity, to enable them to make unavoidable payments, such as the wages of the valets and daily labourers; as soon as the price rises, given that the obligations inducing them to sell remain unaltered, the same quantity of corn is no longer required to satisfy them. Thus the farmer is not forced to send the same amount to market, which immediately raises the price because the places where corn is sold publicly are less supplied than before. Now, this effect, the locking up of grain through the mere publication of the freedom to export it, occurs because when corn is at a low price there is not always the same degree of need or obligation to sell amongst those who supply the markets: some cannot wait on any account while others, although they still have time in hand, fearing that the price will drop still further in the future, and that they will be forced into the same situation as the first group, are led to supply the markets with the same urgency as the others. Yet, a publication allowing grain export is a formal guarantee and assures them a better fate by waiting, which they always do. Thus, for these two reasons, from the point of view of provision, the grain is subject to a price rise, without any foreign cause, from this very moment. (ibid.) An analogous argument is presented in terms of the buyers. During periods of plenty, the mere ‘threat’ of exporting grain, and thus of seeing the markets less well supplied and an increase in price, causes a precautionary behaviour: the price of grain is thus maintained by demand. On the other hand, in the event of a shortage, the movements of panic are not as great as before, since the buyers know that grain imports are liable to resupply the province in the near future: their demand is therefore proportionally less strong, and the price rise is contained. since the great majority who do not plough the earth do their shopping in the markets, in this encounter they act by buying more or less both in relation to the actual price and their expectation of a rise or fall which they believe may occur in the future, as well as in relation to what there is to win or to lose in [keeping] their money or ensuring their requirements of grain for the year. This permission for foreigners to

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export grain acts as a trumpet inviting them to provide for themselves early, while the markets, which already supplied less on account of this publication, are even more promptly emptied for the same reason. (ibid.) Thus free competition, and particularly foreign trade, stabilises prices through the mechanisms of expectation and the price/quantity strategies described. the influx or outflux of foreign grain is of no importance to the kingdom in regard to its subsistence; it is relevant only to equilibrium and price. Since excessively high prices are normally founded simply on public rumours or panic deriving from the relative ease with which farmers sell their grain, the arrival of a vessel loaded with grain acts as a kind of miracle, because very wisely, it is always claimed that it is the beginning of a far greater amount, and that it will arrive very soon. Further more . . . it is true that whether great or small, the supply of the markets alone decides the fate of the grain price, apart from whatever abundant supply may exist in the granaries . . . . A single vessel of three to four hundred muids [hogshead] of corn alone creates an effect as if all of a sudden one brought this amount to a market which ordinarily had only thirty to forty muids on sale days, as is the general norm, even for the best supplied. Unless prices are extremely high and buyers are providing for more than their ordinary provision or else to sell to others, then the price would always drop immediately. (1704b, p. 863) Boisguilbert adds that the same thing exists ‘in the opposite situation, through the exporting of some grain when the price is slashed’. Unlike the claims of its opponents, Boisguilbert stressed that ‘foreign’ (provincial or national) trade is never damaging to the interests of the nation, and in terms of quantity it is ultimately very slight. Since an announcement has an amplifying effect, a small quantity suffices to make prices drop so that additional imports would no longer be advantageous. Inversely, during periods of plenty, while a small export sale permits the price increase, the export of grain is no longer advantageous afterwards. Boisguilbert tries to lay to rest his contemporaries’ overriding fear of a grain shortage. This is why he emphasises exportation, for it cannot be effective during periods of high prices ‘given that if there is something to be gained by foreigners on these occasions, it is not in exporting grain from France, but rather in importing it’ (1705c, p. 787). He is nevertheless of the opinion (perhaps to appease common fears) that it is necessary to restrict imports during periods of plenty, no doubt in order to not add to the fear of a downward pressure on prices; this is what led him to be taken for a protectionist. But it is evident that this measure

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is entirely ineffective since foreigners have no interest in bringing grain to be sold at very low prices; their interest would rather be in taking it away. Boisguilbert therefore concludes his analysis on this point, by emphasising once again the essential role to be accorded to communication, and he specifies that for this entire process to be verified, one must allow time for information to reach even the most distant markets: We should be pleased with what we have remarked, which is that the removal of a very small amount of grain to a sea port immediately puts grain at the required price. . . . This is why we shall speak no more of it, after having simply added that it is necessary that this removal last as long as possible, so that the rumour spreads insensibly to all neighbouring markets, and so that the consequences outlined above penetrate the most remote lands, producing the said effects. (ibid., p. 787) V The amplification process of market trends is therefore due to a behavioural pattern affecting stocks and flows of goods and services, in relation to actual or presumed prices; we shall also see it at work in other markets. The propagation of crises is due to the arbitrage between spending and hoarding, and concerns the stocks and flows of money. A destabilising shock for agriculture causes a decrease in the income of the rentiers: either farmers cannot pay rent because they are ruined in a period of plenty, or they allege that, in spite of high prices in a period of scarcity, they cannot pay because the crop is supposedly virtually non-existent. Through the circular flow of income, this decrease is transmitted to the other sectors, and the depression propagates itself to the extent that the hierarchy of needs reasserts itself. Boisguilbert describes the ‘multiplier’ effect in familiar terms. The actor, for example, is delighted to see grain at a low price, paying just one sou instead of two for his bread. But he does not perceive that in doing this he precipitates his own loss because the farmer can no longer pay the land owner, i.e. the very person who frequents the theatre. A man who used to go to the theatre every day during his prosperous period, in other words while his farmers, through the sale of their produce to the actors, paid him regularly, experiencing a decrease in his prosperity through some violent cause . . . restricts himself to frequenting it just three times a week, compensating the diminution in his receipts through a decrease in his spending.

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As for the actor, who is affected by the same ill-fortune, he does likewise; while he used to eat meat or even poultry every day, he too restricts his ordinary fare, reducing it to only half the time. Hence, apart from the reducing of the grain price, the farmer of the man who used to go to the theatre, and who is a livestock merchant suffers an increased difficulty in paying his master, who in his turn has difficulty in supporting the actor . . . This process continues until reciprocally they have both taken leave of one another, which is the absolute destruction of the state . . . The same argument stands for all the other professions, all of which are miserably poor only through the same behaviour and similar circumstances. (1707b, p. 990) This theme is recurrent but, although it seems familiar, it may receive two complementary interpretations. The common one which emerges from this text is the ex post interpretation. The rentier decreases his consumption because his income has decreased. Through a series of effects linked to the inter-dependence of all professions, noticing a decrease in their income, all agents do likewise. But Boisguilbert also proposes a reading which suggests an ex ante interpretation of similar texts. Starting from an initial misalignment, not only do the agents notice a decrease in their income, they also anticipate future decreases, thereby immediately amplifying the trend. The crisis is propagated through expectations regarding credit, the agents’ solvency, etc., with each individual establishing precautionary cash balances (hoarding) to prepare himself. Here we see the central role of the category of agents who can allow themselves this type of behaviour, that is the members of the leisure class and the entrepreneurs of the productive class. two hundred pistoles kept in the same place by their holder for four or five months, or even more, in the justifiable fear that he will not be paid in the future, deprives the state of two hundred thousand livres of revenue which it would easily enjoy in such a period of time, were it not for this terror which causes such fatal measures to be taken. (1706, p. 803) There are many passages in this vein, demonstrating that the multiplier interaction is very much a matter of spill-over effects caused by the phenomena we have described. It is in vain that a farmer’s house be full of wine, grain and cattle, when everybody knows that because of the low prices he will not have the means to pay his master the farm

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rent, which is always taken first: nobody will be willing to give him any items he needs, because of the certainty that they will never be paid. Similarly the cobbler, hatter and draper find themselves in the same situation through the same cause; in vain are their shops full of commodities, the lack of sales which occurs through the first principle of the farmer’s ruin puts them out of credit, since similarly in the sale of their goods, the shop rent absorbs everything. Hence, the ministry of money is needed everywhere, in other words it possesses a hundred times more functions than before; what ought to oblige it to increase the velocity of its circulation, in fact provokes quite the opposite, and it remains entire months in hands where before it would have rested only a moment, given that, as in times of plenty, one lets go of it in proportion to one’s expectation of money coming in, regulating spending according to receipts . . . from the moment that all subjects see a certain decrease in their future receipts, they do likewise in their spending. (1704d, pp. 968–9) This helps us understand Boisguilbert’s emphasis on the velocity of the circulation of money. Agents reason in terms of expectations and of accumulations of precautionary cash balances: consequently they accelerate or slow down the pace of their spending in the markets, and hence the fluctuations in the velocity of circulation. If agents spent less only when they received less, without varying their propensity to spend, i.e. if they maintained the behaviour of an automaton irrespective of the information received, the velocity of circulation would not diminish: in the hypothesis of a decreasing propensity to spend in relation to income it would even increase. This precautionary behaviour also permits the economic crisis to propagate in the absence of a dramatic decrease in the income of the leisure class; even if some have a purchasing power which is in fact increased, they would not spend more so long as they follow the practice of establishing monetary cash balances in response to pessimistic expectations. Finally, the credit chain also precipitates the economic crisis. An initial credit granted to a rentier by a merchant provokes a hundred others, all founded on the confidence created by the first creditor. If he is affected, everything collapses, thereby multiplying losses.1 VI To conclude this analysis, it remains for us to comment on Boisguilbert’s very precise indications regarding the direction of the propagation of disequilibrium, its possible limitation or possible amplification, and finally, the role of expectations in the phase of economic recovery.

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First of all, the direction of the propagation of disequilibrium, where the professions which appeared last are the first to be affected or to disappear. For example, the acting profession: ‘reform begins through this profession, since the acquisition of superfluities was completed by it’ (1707b, p. 988). For in parallel to the circuit of income, the hierarchy of needs reclaims its rights during times of crisis. Agents do not restrict themselves equally in their pattern of consumption, but instead start with the most superfluous items, and then only gradually, as the depression worsens, move to the most necessary and least futile: Just as there is an order in the increase in spending, proportionate to the increase in possibilities – where initially one can only buy necessities, then one procures the convenient, and after one passes to the delicate, superfluous, magnificent and finally, to all the excesses invented by vanity to ruin the rich . . . – when disillusion sets in through reduced income from land . . . the reform follows the same path in reverse. (1704b, p. 838) The process is all the more perverse and inevitable in that it is less visible. Unlike what would have occurred with a small number of occupations, the multiplicity of professions renders the propagation of a crisis imperceptible at first: The decline which occurs in one of these two hundred occupations is not as perceptible initially as that which would have been encountered by the first two workers on earth; but with time it increases visibly, producing the same effect as the other would have done. (1707a, p. 896) The process may be restrained temporarily by a partial dis-hoarding by agents, when the shocks experienced are not too violent, but this is only the case with the most protected professions, i.e. the most essential ones in the order of the satisfaction of needs: The professions which are best protected, and those who practice them, are not entirely disconcerted by the arrival of a storm if it is not overly violent. Some, or even many, find resources from the past to help them in the present, and even in the future; but this is hardly the case for most others, the misfortunate who constantly have poverty’s knife at their throat, where it is all they can do, working night and day, to prevent themselves from perishing: only a thread’s distance comes between their even frugal subsistence and their total destruction. (1707b, p. 997)

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But according to Boisguilbert, the very process which makes the decline imperceptible in its origins, in fact amplifies it, fortifies its foundations and renders it all the more inevitable. For agents do not have the same structure of consumption: what is superfluous for one is not for others; the nature of superfluity varies according to social condition. Consequently, the suppression of consumption of the superfluous by each one immediately impinges on a large number of occupations and destabilises the entire spending structure, imperceptibly accelerating the contraction process: There is yet another aspect to note, which is that this reform relates not only to the superfluous, nor even to the convenient and useful, but right from the start it attacks even the most necessary of several conditions and trades, through repercussions which are immediately contagious and involve all the professions. Indeed, if it was simply the superfluous and magnificent which suffered, the disorder would not be so deplorable; but since the labourer of the superfluous and magnificent exerts this art and profession only to procure for himself the necessary, the one cannot be restricted without the destruction of the other immediately ensuing, causing a new loss in the state. (1704b, p. 838) It remains to consider the role of expectations during the economic recovery, but its analysis will be postponed until the examination of the other factors which allow the deepening of the depression. VII In the other markets, the process of depression is not fundamentally different. It always involves the interplay of agents’ information and expectations and the strategies based on these, without learning from practice. The general reduction in spending leads to difficulties in the manufactured goods market and the labour market, and consequently in the loanable funds market. We shall not consider the ‘investment goods’ market which indeed suffers from the agricultural slump simultaneously (the decrease in land profitability), the increase in interest rates and the government’s financial policy for ‘extraordinary affairs’. Boisguilbert broaches this theme many times, but in a rather diffuse manner, the essence of which has already been reported. Let us examine what occurs in the manufactured products market. This market also represents a kind of superfluous luxury. A rentier diminishes his spending on manufactured objects first of all: ‘a proprietor who is not paid will hardly give thirty pistoles for a wig,

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fifty pistoles for a scarf or four thousand francs for a carriage’ (ibid., p. 839). As will be recalled, the merchant does not lower his prices, which are initially downwardly inelastic. Consequently, his ruin is inevitable: The merchants of such magnificent goods have advanced large amounts of money [de grandes avances] and have contracted large credits in order to furnish their shops with similar superfluous items; when sales stop, they necessarily perish, taking flight and abandoning everything to their creditors; which becomes so contagious that one bankruptcy always provokes an infinite number of others. (ibid.) What is this contagion due to? It results from the fact that, because of waiting too long, the merchant is forced to ‘sell up’ (faire finance), and undercut the market by eventually lowering his prices dramatically. He sells everything at cut-price thereby stealing clients from his competitor who maintains his prices at the same level: There is yet another disorder, also the offspring of the first cause, which is that when a labourer or merchant sees that his affairs are in disorder, and that he is not able to satisfy those to whom he is indebted before settlement date, for lack of sales, then not wishing to be reduced to begging, he ‘sells up’, as is said, in other words he offers everything at low prices and at a loss, not his loss, but his creditors’ loss, and then puts the money in his pocket, the key under the door and takes his leave. (ibid.) There ensues a ‘disorder for the state’ and another which is terrifying, in as much as this sale at lowered prices and at a loss on the commodities . . . undermines all the other sellers, who can never count on the generosity of the buyer, that is, for the buyer to prefer their commodities at a higher price to the prices which can be obtained elsewhere. (ibid.) This analysis, developed in the Traité des grains, is taken up again in the Mémoire sur l’assiette de la taille et de la capitation. In this work Boisguilbert includes an additional detail which is that the sums of money which the bankrupt man runs off with are inevitably hoarded, thereby exacerbating the disorder. The merchant ‘sells up’ in order to have money which he is careful not to return to trade . . . he keeps it secretly and spends only from pure necessity . . . . . . to prevent himself from perishing, this bankrupt merchant has no other resource than to keep for entire years the specie which, had they remained with him for far less time when his business was flourishing, would have ruined him. This causes two terrible disorders: the first is this excessive retirement of money, which is accountable at all moments to trade or to consumption, without which they both perish, and

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Destabilising shocks (I) which, when this occurs gives rise to . . . fine discourses which claim that the money has passed into foreign countries and no longer exists. The other misfortune is that since these actions considerably reduce the ordinary spending of individuals, this ruins . . . the prices of everything thereby exposing owners of almost every kind to the same fate as the first man who went bankrupt. (1705b, pp. 682-3)

A similar aggravation of the crisis is to be found in the labour market, under the effect of price inelasticity. However, the process is slightly more complex in this market, and the behaviour of agricultural workers and ‘artisans’ must be differentiated. We know that in the labour market the money wage is only upwardly flexible. Now, a decrease in grain price means less of a demand for artisans and merchants, and hence stagnant business or recession. We know what the situation is then for the farmers. The same situation prevails for all those with domestic servants. Those offering work therefore want a decrease in the money wage, but the workers oppose it. In agriculture, the position of the workers is the most favourable through the nature of the work involved. Dictated by the rhythm of the days and seasons, the work cannot wait. Farmers therefore find themselves in the unavoidable situation of ‘either undertaking the tasks whatever the cost or abandoning everything, and this ruins the farmers, and consequently their masters and creditors, and so on up to infinity’ (1695, p. 610). In a period of low grain prices, here the worker’s cause is won, though it is later lost. Necessity alone, which drives this sort of people, loses its control over them: if, because grain is cheap, they earn the expenditure of the entire week in a single day’s work, far from accepting an adjustment to their wage, this situation encourages them to increase their master’s destitution by demanding a higher price through their ability to do without work for a considerable length of time should he refuse. And since farming has no moment which is not crucial, in other words, if nothing is done at the hour and day dictated by the seasons, all is lost, the farmer has only the choice to perish by leaving everything, or to incur an expenditure which will never be reimbursed. (1704b, p. 874) On the other hand, in the merchant and manufacturing sectors, the position of the entrepreneur is less perilous, as a result of the nature of the productive process. Hence the more spectacular action of the workers in terms of strikes and coalitions. There is a spirit of rebellion against justice which is so strongly established amongst workers on these occasions . . . that in commercial towns one can witness seven or eight hundred workers from a single manufacturer suddenly walk out . . . because one wishes to reduce their pay by a single sol when the price of their products has fallen four times over; and the most mutinous of the workers may be seen acting violently against those who would be reasonable.

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There are even statutes amongst them, some of which are written, which they pass amongst themselves. . . . These assert that [if] anyone accepts a decrease in the ordinary price, he will immediately be prohibited from taking part in the trade. And besides the means used on these occasions, the master himself suffers from them, through a general prohibition on working for him. We have seen important merchants go bankrupt for the sole reason that for two or three years they could find no one to do their work, although there were many there with that skill who were without masters. (ibid., pp. 875–6) The economic consequences of this initial rigidity in money wages is easy to imagine. When the workers reverse their decision and announce that they are ready to accept less favourable conditions than before, it is too late. The ruin is already generalised: in all the arts and professions . . . we see the same rebellion by the worker against the entrepreneur, or even by domestic servants against their masters: seeing that the price of bread is low, they leave at the slightest word, but then afterwards, the workers and valets pay dearly for their folly when their reserve is used up. They get over their rebellion but no longer find the market they had refused, or anything like it, because poverty has established itself powerfully and it is now in everybody’s interest to dismiss people, not to take on any new workers. (ibid., p. 874) Lastly, the loanable funds market receives a two-fold attack which increases interest rates, thus causing difficulties through repercussions in other markets. Through the ruining of confidence in merchants’ bills, and through the practice of creating precautionary cash balances, economic difficulties create a ‘famine’ of specie, thereby increasing the demand for funds, just as the number of lenders decreases. The first effect is to infinitely multiply the number of borrowers and people looking for funds, at the same time as diminishing the number of lenders, since the same lack of confidence which means that their bills are no longer wanted, also obliges not to make loans to them. (1705b, p. 675)2 In addition, the state accentuates the trend through its financial policy, provoking, from one person to the next, a generalised increase in interest rates: when this great profit given by the King, the denier four [i.e. 25 per cent], with no risk or peril to his lenders, is encountered in subjects who have absolutely no other possessions, especially in their establishment, it means that they must have recourse to borrowing. Now, the lenders, taking advantage of the cupidity of many of these people [the partisans] have no scruples in departing from the level of interest regulated

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Destabilising shocks (I) by the Prince and the laws: in haste they offer denier ten [i.e. 10 per cent]; realising these great advantages, no one considers the land or charges, which remain entirely nil, such that the capital of the kingdom comes to nothing. All the credit of these fund holders . . . vanishes and there was no other resource against these disorders than a cessation of all types of spending. (ibid., p. 704)

We have thus come full circle. VIII Of course one should not expect to find a model, in the modern sense of the term, in Boisguilbert’s work. But failing such a model, his approach is nevertheless coherent, and his analyses are remarkably precise and well-articulated; he attempts to give an account of the reality of France at the end of the seventeenth century with the help of theoretical principles and the creation of an economic mechanics. The mechanics are not perfect, but it exists and there was no equivalent at the time, nor for a long time afterwards. It is a critical moment in the development of political economy. The secularisation of Jansenist religious themes, initiated by Nicole and Domat, is completed and surpassed in Boisguilbert’s work. From now on the conditions in which cupidity, non-enlightened self-love and the misleading language of social relations are established, form a coherent and apparently perfect whole, benefiting everyone through the individual search for the best position possible. The destabilising processes are also analysed as well as the unfolding of economic and social disequilibrium. But there is one remaining point which requires clarification regarding the role of the state as it has been outlined thus far. It has already been said that Boisguilbert’s plea for free trade in no way excluded interventionism; it is now a matter of clarifying what forms this might take. As might be imagined, economic policy is related to the regulation of the grain market whose specific character has been emphasised. But has it not just been shown that in a free-trade system the grain market tends to selfregulate? And that freedom of trade (including foreign trade) tends to institute balanced competition which neutralises extreme fluctuations due to climatic variations? Boisguilbert certainly repeats this point many times. Nevertheless, two problems do arise in the context of this analysis: one concerning timing, another, the effective implementation of free trade. Indeed, on the one hand Boisguilbert emphasises the fact that it takes time for information to reach all parties wherever they are, and that the situation may very well evolve during this process; and, as the agents are well aware, one cannot import or export to a region

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instantaneously, even from a neighbouring province (later Galiani stressed this point). On the other hand, wars may disturb trade, particularly the kingdom’s foreign trade: the free circulation of commodities may be impeded, and the consequences described in relation to expectations may lead to a destabilisation. Consequently, despite everything, it is necessary that the state watch the situation carefully, and that it immediately supplement any condition of equilibrium which is lacking. For ‘it is necessary to act as with a spinning top: never touch it when it is spinning fast, but help it when it seems about to fall over’ (1705b, p. 708). So what does the state interventionist policy involve? It is primarily a matter of influencing the agents’ information and expectations by making announcements. The case Boisguilbert deals with is that of a war which is partially or totally preventing foreign trade: If, because of the war, the said removal [i.e. the exportation of grain] does not suffice to maintain this price, then the King should declare that he wants to set up grain stocks in ten or twelve towns situated on rivers forty to fifty leagues from Paris. Two or three hundred muids would be enough to do this and to make it generally believed to be a thousand times more. (ibid., p. 738) Unlike the other agents whose information is only partial, apparently the government knows exactly how the economy is functioning (it is Boisguilbert’s task to bring this to its attention). Consequently, to achieve its object, it too must adapt its behaviour to the agents. The government too must cheat: in order that information in regard to its purchases has time to circulate, so as to produce the intended effect, and so that no agent perceives the deception (the ‘exportation is only apparent’), the partial implementation of its project must be slow and widely dispersed (the ‘ten or twelve towns’). Furthermore, in case of a shortage the ‘two or three hundred muids’ collected will be enough to put a stop to expectations of a price rise. Thus a use of public granaries is justified: ‘And furthermore, if the grain price is too high in sterile years, by selling the supply grain, the price would be brought back to a reasonable rate’ (ibid.). It is always the same scenario: since grain is a commodity which is very delicate, for which the slightest movement causes it a very great one, then perhaps this alone [the mere announcement of the policy] would bring it to the price it ought to be, or at most the purchase of two or three hundred muids would do the trick because the people, who are never reasonable in response to public rumours, would enlarge these objects so much that the purchase would be estimated a thousand

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Destabilising shocks (I) times greater. Thus, the buyers would rush to furnish their supplies for fear of a price rise, and the farmers, no longer being forced to sell a large quantity of grain at a low price to meet the daily and indispensable household expenses, since two sacks bring them as much money as four did previously, would not swamp the markets with this item, which drops its price, and thus through the opposite behaviour, this would tend to support the necessary rate for farming and fattening up the land, given that both extremes of high and low price are born of themselves. (1705b, p. 708)3 IX

Within the context of the problem of timing under consideration, as a conclusion it is interesting to note a development in Boisguilbert’s thought on this topic and to return to a subject left aside until now: the problem of the perfect reversibility of expectations. As a matter of fact, Boisguilbert shifts from a perfectly reversible conception of expectations, to a different, more asymmetrical conception in which optimistic predictions during the economic recovery do not re-establish themselves as rapidly as they are destroyed during the crisis. In the Détail de la France the model is in fact purely mechanical. Should any kind of cause destroy the equilibrium and confidence, its suppression re-establishes them immediately: ‘And one should not claim that this requires time’ (1695, p. 646). After the publication of the edicts relating to fiscal reform, ‘here then . . . everybody is rich in twentyfour hours’ (ibid., p. 648), since the subjects’ wealth is no longer threatened. Prices, and along with them the income of the king and the people, are reestablished immediately. One should not say that this takes time because there is an interval of only 24 hours between the permission to sell a commodity, when there are people in a position to buy it, and selling it; and between having sold it and being richer than one was, there is no interval; and between being richer than one was and increasing one’s spending, or buying land, or farming it better, again there is no interval; and between making these moves and throwing money amongst the people, there is no interval either; and the moment the populace has money, it consumes the fruits of its labour, and is in a position to pay the King accordingly. (ibid., p. 659) Boisguilbert specifies that an edict on the reform of the taille, would have the same effect as if one announced to various impoverished individuals that an inheritance of extremely valuable immovables had befallen them, for even if

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they received no rent until a year afterwards, it would nevertheless produce an effect at the time because everyone would lend to them very willingly, seeing the certainty of being reimbursed both with capital and interest, as soon as the year was over. Nevertheless, since this edict would remove the fear of being exposed as prey to one’s enemies or envied by any show of opulence, which is nevertheless inseparable from both trade and labouring, the farmer would borrow on all sides to bring livestock to his farm, and these loans would be made willingly, seeing that he could no longer be seized for his neighbour’s taille, nor could his taille be increased in so exorbitant a fashion because he was developing his land. Yet, since this would produce a fertiliser which is always followed by a good crop, he would be in a position to share the profit with those who had helped him. (ibid., p. 647) Boisguilbert’s analysis is very different in the Mémoire sur l’assiette de la taille et de la capitation, on the subject of the abolition of ‘extraordinary affairs’ and the reform of the taille. This time, the re-establishment of the state of opulence is supposed to take time because as Boisguilbert comments, confidence is not re-established immediately, and the agents are not all equally sensitive to all the measures, nor are they necessarily informed about everything: Thus, although the abolition of extraordinary affairs which annihilate all funds, and the dispensation from the injustice and disorder of the tailles, would bring a great good to the people, they are not generally sensitive to both of them because, for the first, it takes time to re-establish confidence, and for the second, people in towns upon whom the increase in the capitation falls are not sufficiently instructed of the horrors of the economy of the taille to understand immediately the great good to come from the change. Furthermore, those whose privilege . . . seemed to protect them will find it difficult to understand its utility although it is effective there too. But as for the disorder of the aides and the liqueurs duties, one can say that since everybody participates in their pernicious effects equally, from the greatest seigneur to the lowliest artisan, not a soul would fail to understand and would not personally experiment on the spot that his share of the eighty million necessary to shoot down these monsters would not be a fourth of what their destruction would have at the same time granted him in wealth. (1705b, pp. 716–17) Once again the mechanical model encounters the impediment of the partial irreversibility of historical time.

Conclusion

At the end of the seventeenth century, on the eve of the Enlightenment, during that sombre period which is often described as tragic, a coherent, new problématique emerged. Some of the central ideas of this problématique were discussed throughout the next century, until they found new formulations in the constructions of Quesnay, Turgot, Condillac and Adam Smith. But true to tradition, its inheritors were also unfaithful to their model; their memory proved to be extremely selective. While they retained the idea that in a system of free competition the selfish pursuit of gain by calculating agents with a maximising behaviour leads to general equilibrium and a state of opulence, they often neglected many aspects which are equal contributors to Boisguilbert’s theoretical construction and which cannot be ignored without damaging his system. To mention just a few, these include the idea of connections between equilibrium and circuit, between the two states of opulence and economic crisis, between long trends and cyclical fluctuations, and between the agents’ different strategies, which are related to the information they hold and the expectations they form in the markets. And yet, from the Détail de la France to the second Factum de la France and the Dissertation de la nature des richesses, the various commentators have noticed, each in turn, some incoherencies and contradictions (see below, in the Appendix). However, most of these are fictitious, simply derived from a reading of the texts through the prism of later theoretical conceptions; thus it is not surprising to see the author’s overall project receive a rather rough handling and to see his theoretical elaborations exposed to partial or total incomprehension. However, in its reconstruction in the preceding pages, does not Boisguilbert’s theory take on a resonance which is too modern, and which is therefore also rendered suspect? Is not this reading itself victim to the dangers of an overly retrospective analysis? No reader can ever escape from his time, granted. But control procedures do exist, in this case they are based on an analysis of the environment of Boisguilbert’s thought. The triple philosophical, political and scientific tradition of which it is a part help explain its themes and clarify its emphases. Moreover, they enabled me to stress the modifications Boisguilbert made to the areas of thought which inspired him and to understand how he simultaneously combines and transforms them into an entirely novel construction in a domain which was as yet

Appendix

During the course of this essay very few references have been made to the literature on Boisguilbert, though a great deal exists; the principal titles are listed in the Bibliography. However, no central line of interpretation emerges from this literature and what is striking is its division amongst frequently opposing opinions. Interpretations of Boisguilbert’s work have varied considerably over time. In this appendix my intention is briefly to situate the main contributions within a historical perspective in order to give the reader a notion of the different themes commentators have focused on. For over and above the agreeable or disagreeable character of the individual himself, the way in which his ideas have been perceived, during and after his lifetime, enable us to evaluate the problems he posed. In particular, a number of questions are consistently broached without any agreement being reached in relation to them, and this recurrent resurgence is intriguing. As an example, one might cite the question of the nature and role of money, or the recurrent issues of the characterisation of economic equilibrium, the origin and probability of destabilising shocks and the means of ending economic crises. Naturally, this reading can only be extremely selective. I Within the large body of eighteenth-century economic literature Boisguilbert is not cited very often (except perhaps towards the end of the century), although he is cited no less than any other author. However, his work was read and did have a profound influence, whether it be on the traditional question of free trade (especially in regard to grain), the role of money, the financiers or even the details of the organisation of tax collection. Cantillon notes in passing that he had made use of a study on the ‘state of France’ in which he read that land rent, ‘around Mantes and consequently not far from the capital of France’ (1755, p. 103) decreased by half between 1660 and 1700. ‘The author attributes this fall in rent to a lack of consumption’ (p. 104). One cannot help recognising Boisguilbert’s archetype example here. In the first important study devoted to the grain trade in the eighteenth century, one also reads

144 Appendix this is not the first time that this question has been raised in France. Its principles are to be found in a treatise written by a French author who claimed that the more grain is sold abroad, the more agriculture will be abundant and the more the kingdom will flourish. This opinion, founded on fairly firm reasoning, was no doubt considered as paradoxical. (Herbert, 1753, pp. v-vi) Despite a degree of confusion between Boisguilbert and Vauban’s work which was fostered by Voltaire,1 in the ideological battles over the following thirty years Boisguilbert’s name appears increasingly frequently as an implicit reference point which is either to be adopted or rejected. It is therefore interesting to examine the way in which certain authors perceived the issue: Voltaire and Forbonnais viewed it in terms of hostility and reticence; Dupont de Nemours and the marquis de Mirabeau adopted it with enthusiasm. It is an indisputable fact that Voltaire could not bear the author of Détail de la France, who he often derided; this was not only on account of his style and the violence of his texts, but also (and above all) because Boisguilbert presented Colbert’s administration in a negative fashion, contesting the image of a belated decadence in France under the reign of Louis XIV.2 According to the dominant view, this decadence was not due to poor government of the economy, but rather to the incessant wars provoked by enemies. ‘And yet it was during these fine years that a Norman, named Bois-Guillebert, who had lost his fortune through gambling, sought to decry Colbert’s administration, as if satires might repair his losses’ (1775, p. 364). The defence of Colbert is interesting, for in it Voltaire stresses the measures the Controller General took in favour of agriculture, which were obscured by his adversaries. Yet Voltaire himself is often excessive: If we compare Colbert’s administration to all previous administrations, then it is clear that posterity will cherish this man. . . . However, in 1702 ingratitude was still great enough to reject onto Colbert’s account the beginnings of the languor felt by the nerves of the state. At that time a certain Bois-Guillebert, lieutenant general in the bailiwick of Rouen, printed the Détail de la France in two small volumes, in which he claimed that everything had been in decadence since 1660. In fact it was precisely the opposite. France was never so flourishing as from the time of the death of cardinal Mazarin to the war of 1689; and even during this war, the body of the state, which was beginning to fall ill, was supported by the vigour Colbert spread throughout its limbs. (1768, pp. 518–19) And yet Boisguilbert was not completely without merit; he had a great knowledge of the finances of the kingdom, but his passion for criticism . . . led him too far: he was considered a very

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intelligent man who was always being misled, a project maker who exaggerated the sickness of the kingdom and who proposed poor remedies. (1764, pp. 306–7) As a theoretician and a historian aware of economic matters, Forbonnais’s response was more subtle. Although he goes so far as to describe Boisguilbert as a ‘violent writer’ (1767, vol. II, p. 130), criticising his ‘obscure style’ (ibid., vol. I, p. 167), he regrets having to do so since ultimately these features ‘deprived this treatise [Détail de la France] of the praise which in many regards it deserved: the foundation of his system is precisely that of the Tableau économique’ (ibid.). Later Forbonnais repeats that ‘the author of the Tableau économique’ made the Détail de la France ‘his guide and constant model, even when he does not cite him’ (ibid., vol. II, p. 12). Having thus established the link between physiocracy and Boisguilbert, Forbonnais could not help commenting that the Détail is ‘occasionally more moderate, even in its exaggerations, than those who have adopted it as their guide’ (ibid., vol. I, p. 285). Here we recognise one of the lively polemics of the day. But although Boisguilbert is analysed only incidentally, in relation to the works of Quesnay and Mirabeau, Forbonnais compares the various conceptions only in regard to some very precise points. For example, the role of money. Referring to a passage from Philosophie Rurale in which Boisguilbert’s ideas and vocabulary are evidently adopted, Forbonnais states that he is not duped by the traditional attempt to confine money exclusively. to the role of a means of circulation, nor does he accept it: Here we see the main result clearly, which is to encourage men to prevent money from functioning as a fictitious immovable. To a large extent, this was the object of a work entitled Détail de la France, which appeared at the beginning of the century. (ibid., p. 167) There is also disagreement as to how to reason empirically and how to treat statistics. Here, Forbonnais speaks as an expert, and once again he refers the physiocrats to their origin. He emphasises the different factors to take into account in all historical research and the prudence this subject requires (ibid., vol. II, pp. 11ff.). Simplification or hasty generalisation lead only to false assessments: when he [Boisguilbert] goes into detail, we see that he is a impassioned man, prone to making outrageous assumptions. When, through the calculation of the ravages which the Normandy aides actually produced in the Mantes election, he assesses the loss felt in the rest of the Kingdom although the same duty was not imposed there, one might not be surprised that the author was taken for a madman in his time, and that the excellent maxims found throughout his work were discredited on account of their confusion with untenable and extreme exaggerations. (ibid., vol. I, pp. 285–6)

146 Appendix On the other hand, and not surprisingly, Forbonnais declares that he agrees with Boisguilbert’s ideas about free trade. In particular, ‘he shows very clearly that the state is deprived of a large revenue when the free export of grain is hindered: and all that is good and reasonable to be said about these principles may be found in this work’. II The commentary offered by the physiocrats is entirely different. Dupont de Nemours devotes a passage to the Détail de la France (in extremis: he almost forgot it) in his ‘Notice abrégée des différentes écrits modernes qui ont concouru en France à former la science de l’éonomie politique’ (Les Éphémérides du Citoyen, September 1769, pp. 8–13). In it we find the obligatory praise for ideas on free trade. More importantly there is an emphasis on the recognition of the role of avances (advances) in production. There is also the inevitable regret for the absence of the doctrine regarding the exclusive productivity of agriculture. Here we wish to mention a book which it is very surprising that we almost forgot, since it is one of the first ones we read. . . . This book is the Détail de la France by M. Pierre Le Pesant, seigneur de Boisguilbert. . . . This work, whose title admittedly is not very clear, and whose reading is somewhat tiring because of its faulty and diffuse style, is nevertheless singularly precious on account of the wisdom with which the author recognised that which everyone in his time was unaware of, namely the necessity to respect the advances required for useful work, and the advantages of the freedom of trade. Had he recognised that the land and waters are the only sources from which the work of man draws wealth, and that the work of conserving, manufacture, exchange, etc., which have been incorrectly confused under the generic term of industrial work, only act on the wealth which has already been produced, without adding anything to it; had he recognised the existence of the net product, and had known how to distinguish it from the costs of reproduction, and had he combined these truths with others which he sensed, then we would owe him the honour of the invention of the Principles of the Economic Science. Finally, it is interesting to observe Mirabeau’s reaction in the notes and commentaries he wrote during his reading of the Factum de la France (1758–9),3 rather than in the praise ordered by Quesnay. The enthusiasm of the volcanic marquis for the person he called ‘le bonhomme Guillebert’ is unmistakable. Countering those who accused Boisguilbert of purposely blackening the reign of Louis XIV (‘this man did not see in black at all; his style

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and his ideas are not those of a melancholic’), and even admiring the author’s means of expression (and on this point, Mirabeau is quite alone!), he stressed the themes which Dupont later treated in his Notice at great length. He also emphasised other aspects, such as the harmful character of the traitants and financiers, the constant ‘battle’ waged by the town against the countryside, the need for a lucrative price for grain, the critique of the fiscal system,4 the role of expenditure and the role of private interests in the pursuit of public opulence. But for certain themes, Mirabeau’s notes show a significant distortion, or even a misinterpretation of the ideas expressed in the Factum de la France; this is particularly true in regard to the role of foreign trade (1758–9, pp. 141–2), the theme of ‘speculation which can never produce anything but monsters in the arts which are learnt only through practice’ (ibid., pp. 119–20, 127–8), and that of respect for people in high ranks. Let us expand on and explore this last point. Any reader of Boisguilbert’s works will be struck by one aspect which apparently contradicts the rest of the analysis. In conjunction with the violent criticisms of the economic policies pursued, the author never fails to add that in fact the ministers were ‘full of integrity’, that they have nothing but ‘good intentions’ and that they are, actually, constantly ‘surprised’ by their entourage and by the flatterers who haunt the court. While the remedies proposed by Boisguilbert do include radical measures, he emphasises just as frequently that all those people at whom they are directed may remain in place, including the partisans and financiers responsible for so many difficulties. Hence the accusations of incoherence, or at least compromise, inevitably made by later literature. Mirabeau was one of the first to do so. In response to the numerous assertions concerning the integrity of the ministers, he limits himself to this brief remark: ‘At least our author is polite’ (ibid., p. 132). But as for leaving people more or less in place, and convincing everybody of the good reasons for the reform chosen by the prince, this would be to neglect the weight of personal interest. The good gentleman believes quite simply that it is nothing more than a question of will. The Prince is capable of everything without reserve, and through him his ministers are all powerful; but the Prince is capable of everything only through other men, and consequently, by supposing that he can communicate his power absolutely, he still could not attribute to his ministers the independence of all the interveners. Now if for once this great machine were set up in such a manner as to turn it in one direction, it would be a waste of time to hope that the hornets would become bees. . . . Once the court, capital and even the provinces are filled with hornets, it is difficult to get rid of them, and they would never be able to fulfil any other occupation. (pp. 117–18)

148 Appendix III After falling into the shadows for about half a century, Boisguilbert’s thought again provoked interest, particularly following the Daire publication of his principal works.5 Although this publication is known to be defective on account of the alterations which Eugène Daire thought it necessary to make to the texts, it is historically significant and for more than a century it was the only widely available source. Forty years later it was supplemented by the correspondence published by A. de Boislisle in the two volumes of Correspondence des contrôleurs généraux des finances (Paris, 1874 and 1883). It was at this time also that Boisguilbert’s biography began to be better known, again thanks to Boislisle in particular.6 Meanwhile, in 1865, the Académie des sciences morales et politiques chose Boisguilbert as the subject of a competition for the Léon Faucher prize in which A. de Boislisle, F. Cadet and I.E. Horn all took part. The overall tone is one of an admiring rediscovery. ‘Although one must recognise that as a writer Boisguilbert is desperately incorrect and prolix, one must also admit that as a thinker he truly deserves to be called the Christopher Columbus of the economic world’ (Daire, 1843, pp. 168–9). There is no doubt that we are witness to a bizarre contrast in a courageous citizen, a victim of his devotion to the interests of the people, who had the patriarch of the philosophers [Voltaire] as a livid Zoïle, and . . . a duc and pair of the court of Louis XIV [Saint-Simon] as panegyrist! (ibid., pp. 157–8) It is indeed a bizarre contrast, but only for nineteenth-century readers: because for them the author of Détail, filled with ‘humanitarian and patriotic principles’ and a ‘generous instinct’ (Boislisle, 1899, p. 598) was the ancestor of the participants of 1789. The lyricism of Jules Michelet reflects the opinion of his era very well. Occasionally France experiences noble awakenings; at these times it remembers great men and great events. Its memory returns and its soul is haunted by illustrious ghosts who, in their time, had this same soul. Let us share in one of these moments now! Let us see, on the bridge in Rouen, next to Corneille, a statue of a great citizen, who one hundred years before 89 sent out from Rouen the first voice of the Revolution, with as much force and seriousness as was later offered by Mirabeau.7 (1862, p. 139) Once the general perspective has been modified, the examination of principles and origins is no less acute from K. Marx to I. E. Horn. But though the centres of interest are altered, the opinions are no more concordant.

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IV Marx could not be insensitive to the violent criticism of money and the type of inverted, absurd and unhappy reality produced by the reign of money. This was all the more the case since he also knew the texts of English writers such as Hodgskin and Ravenstone who criticised the ravages of capital in similar terms. In Boisguilbert’s work, as in the work of those who are incorrectly known as the ‘Ricardian socialists’, we find a similar analysis of a natural state distorted by the mystifying presence of an ‘idol’ and a social group which goes against nature, unduly inserting itself between the real producers and the consumers. Although Marx does not establish this filiation explicitly, he stresses another connection in a parallel with Sismondi. Sismondi freed himself of Boisguilbert’s conception whereby the labour creative of exchange value is falsified by money although, just as Boisguilbert criticised money, he criticised large industrial capital. (1859, p. 37) However, though Boisguilbert ‘attacks money fanatically, since according to him its intervention disturbs the natural equilibrium or the harmony of exchange of commodities and, like a fantastic Moloch, demands all natural wealth’ (ibid., p. 31), and while his conception is very critical, it is nevertheless scientifically erroneous. His polemic against the precious metal is linked only to ‘historically determined circumstances, Boisguilbert battling against the blind and destructive passion for gold which reigned in the court of Louis XIV amongst the farmers general and the nobility’ (ibid., p. 32). But in as much as he ‘had in sight only the material content of wealth, the use value, enjoyment, etc.’, and ‘he considered the bourgeois form of labour, the production of use value as commodities and the process of commodity exchange as the social form in which individual labour attained this goal’ (ibid.), he did not understand the necessary apparition of value in a monetary form and the functions fulfilled by money other than that of a means of circulation. Boisguilbert accepts labour creating use value while simultaneously refusing that which is at the origin of the exchange value. Thus, when he finds himself faced with the specific character of bourgeois wealth, as in the case of money, he believes in the interference of usurping foreign elements and he criticises bourgeois labour under one of its forms at the same time as, being a utopian, he exalts it in another form. (ibid.) In the field of value and prices therefore, Marx judges Boisguilbert in terms of his own theory of ‘labour value’ which, moreover, he also attributes to him.8

150 Appendix V From an equally partial point of view, that of the political economy in vogue at the end of the Second Empire, the analyses of I. E. Horn (1867) and F. Cadet (1870) should also be mentioned. In this case it is a matter of the first works devoted entirely to Boisguilbert, crowned by the jury in the competition run by the Académie des sciences morales et politiques in 1865. Cadet’s work, like many later studies, is largely disappointing, often confusing analysis with paraphrase. It nevertheless had an important part to play in the dissemination of Boisguilbert’s thought. Horn’s work, which is more critical, is also more interesting theoretically. To start with, in terms of taxation theory, Cadet comments on an idea which later became popular: a decrease in rates and improved distribution would increase fiscal receipts by stimulating economic activity. ‘This idea is a true discovery. Here indeed is the law of tax movement. Boisguilbert senses clearly that in terms of contributions, as Adam Smith expressed it, two and two do not always make four’ (1870, pp. 59–60). Apart from this, the author pays little attention to the way in which Boisguilbert writes or rewrites history (p. 124) or uses figures advisedly or not (ibid., p. 156). Like Mirabeau moreover, Cadet is struck by the contrast between the very critical character of the analyst and the relative timidity of certain propositions (ibid., p. 64). In terms of monetary analysis, Boisguilbert’s desire to consider only the function of the means of circulation as being natural to money reminds F. Cadet of the principles of J. B. Say: Here is the famous principle in black and white . . . products can only be bought with other products. And this was not an ephemeral view: he excuses himself for repeating it so many times. . . . If M. J. Droz could say that one of the greatest services rendered by M. Say to political economy. . . is to have made this fundamental truth as clear as it could possibly be . . . then justice demands that this glory be reflected partly on Boisguilbert. (ibid., p. 243) Finally, in his analysis, Cadet demonstrates an interesting contradiction in terms of the concept of economic equilibrium conceived as the harmony of the interests of different agents. It is true that Boisguilbert’s assertions on this subject sometimes appear to be contradictory; this had already been noted by Eugen Dühring and August Oncken9 in the nineteenth century. On the one hand, Boisguilbert effectively asserts that every agent fights for his own interests with no concern for the general interest, while on the other, he asserts that the sacrifice of public interest to private interest is the cause of depression and economic crisis. He says that equilibrium is always achieved freely on the markets, at the same time

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as claiming that the constant intervention of a ‘superior force’ is needed. However, Cadet does not consider this to be a problem and in the wake of the harmonious theory of his era, he proclaims that here again, Boisguilbert anticipated Quesnay, Smith and J.-B. Say . . . For these fine theories . . . political economy should be blessed forever, even if it had only brought into the world this scientific demonstration of the fraternity proclaimed by Plato and confirmed by Christ. (ibid., p. 274) Here therefore we find Boisguilbert in good company, being promoted as champion of the conscious solidarity of the professions, social classes and the people. The contradiction present in Cadet’s work is situated between this opinion, expressed in 1870, and a fundamental contribution which he made incidentally later on. In a book on Éducation à Port-Royal (1887), he emphasised Boisguilbert’s links with the first current of Jansenism.10 In this work, he considered Pierre Nicole’s analyses and commented on the assertions that all human actions are founded solely on self-love and concupiscence. Without perceiving that these same remarks are found with equal force and conviction in Boisguilbert’s work, Cadet revolts against this perspective, appealing to Bastiat: Mme de Sévigné finds this description of society very amusing, whereby, thanks to cupidity, extremely obliging people build and furnish our houses, weave our cloth, carry our letters, run to the ends of the earth in search of commodities and materials or gaily render us the most lowly and unpleasant services. This notion is neither correct nor is it healthy. It has a paradoxical turn to it which would make it more acceptably welcomed in a humorous writer. A serious moral lesson requires a different tone and this admirable harmony of economic interests which Bastiat has so eloquently described ought to be discussed in more suitable terms. (1887, p. 44) VI Finally, the study by I.E. Horn deserves special consideration, for it is the first in-depth critical examination of some important doctrinal points, despite a curious premise which soon became a tradition: ‘Boisguilbert . . . is not a theoretician’ (1867, p. 136): in an era in which everyone was making up systems, he had no “system” of his own. . . . Boisguilbert takes hold of one or other important question brought to his attention

152 Appendix by the facts, he examines it in all its dimensions, without attempting to attach it to a set of doctrines or principles. (ibid., p. 80) In short, he ‘does not cooperate in the construction of the edifice of political economy’, even though he ‘brought many a stone, of the most formidable and indestructible kind, to the future construction’ (ibid.). We shall not expand on the numerous supporting critiques made of the figures proposed by Boisguilbert11 and concerning his conception of a golden age of the French monarchy whose destruction was caused by bad measures in economic policy.12 Horn’s argument here is supported by historical sources which Boisguilbert could have known, dating from the end of the sixteenth century,13 and Horn demonstrates effortlessly that the past should not be idealised: its rule was evil, the best was no more than accident, and contrary to Boisguilbert’s claims, the primary cause of this was the monarchical regime itself. Horn’s remarks about two central issues are far more interesting, namely those relating to money and to the achievement of economic equilibrium in a situation of free trade. We shall therefore now consider these two points. Horn willingly accepts that the word ‘wealth’ be reserved only for real wealth, and that, consequently, money is but a simple means of circulation. Both the starting point and the conclusion are correct. But why so many useless detours between the two (ibid., pp. 101– 2)! Was it necessary, Horn asks, to indulge in quite so many imprecations against the ‘idol’ (money) and its eminently destructive character as the source of all the ills of society? In his battle against ‘mercantilism’ Boisguilbert errs through excess: he wishes to reduce the role of money, debasing it from tyrant to slave, at all costs. According to Horn, Boisguilbert makes ‘money responsible for the inequality of conditions and all the suffering of the classes without fortune’ (ibid., p. 120), and advocates ‘a certain primitive return to barter’ (ibid., p. 119). Horn emphasises the connection between these ideas and those of Thomas More (ibid., pp. 118–19) and expresses his disagreement: As if the primitive peoples who were restricted to barter were not infinitely more miserable than those who engage in trade! As if in semisavage countries, deprivation, hunger and starvation are not responsible for far more victims than in more refined civilisations. As if fraud, theft and murder were unknown in the Maldive islands and amongst the Red-Skins! (ibid., p. 121) Evidently Horn misses what is essential to Boisguilbert’s reasoning here. For Horn, the source of this error resides simply in the fact that Boisguilbert only considers money as a sign, although it is first and foremost a value, a commodity.

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In order to function as money, in other words, to accept it in return for the object which I would like to possess, the given commodity must be of an equal value to the object I cede, and at least equal to the object which I wish to acquire, and with a certain value and faculty in addition. In other words . . . it cannot become an instrument of exchange simply because it can be the object of exchange. (ibid., pp. 126–127) As for Boisguilbert’s remarks on the character of money as a ‘reciprocal guarantee of exchanges’, Horn is guilty of a misconception. Where Boisguilbert uses this vocabulary to designate the ‘tacit condition’ of exchange, Horn sees a theory of money-credit. Money cannot act either as a guarantee or as a credit title, since it constitutes a complete liberation. The buyer who gives me one hundred grams of silver in return for my hundred litres of corn owes me absolutely nothing else, nor do I owe him anything.’ (ibid., p. 124) On these bases, Horn shows himself to be essentially incapable of judging the criticism Boisguilbert directed towards Vauban’s project for the ‘dîme royale’ or of grasping the emphasis placed on the velocity of circulation of money linked to the different propensities to spend of the social classes. The reproach that Vauban wanted to raise a tax in kind is considered as a salutary withdrawal14 in relation to the theoretical propositions advocating barter. And the passages emphasising that an écu has a greater effect in the hands of a poor man than in those of a rich, where it would stay sleeping in his coffers, are considered as a plea in favour of small capital.15 Finally, the free-trade doctrine is not spared either. For Horn, Boisguilbert would request the government to intervene to increase the price of grain in order for it to become lucrative again: Indeed, he does not confine himself to calling for the suppression of the laws and regulations through which authority acts as a premeditated fate on the price of corn; he does not ask for abstention: he calls for action in the opposite direction, the artificial raising of the price of corn. (ibid., p. 174) Horn does not see that this intervention is only called for in exceptional circumstances, in liaison with the information and expectations of the agents and the mechanism for achieving equilibrium. The same error, which is also found at the origin of his misinterpretations of monetary theory, is repeated in relation to foreign trade. What happens to Boisguilbert here also occurs in other circumstances: wishing to correct too curved an arc, he forces it in the opposite direction. To demonstrate more

154 Appendix clearly, he believes, how far the ‘very subtle policy’ which attempts to lower the price of corn is false, he allows himself to be misled to the point of supporting the advantages of dearness, and to the point of calling for the intervention of authority to produce this; likewise as we shall see . . . in his ardour to combat the laws prohibiting the exporting of grain, he goes so far as to claim that, on the contrary, the state ought to encourage the exit of grain in all possible ways. (ibid., p. 175) This confirms Horn in his opinion that a contradiction exists within Boisguilbert’s theory. Furthermore, he regrets ‘that the author should have considered it unwise . . . to show us the “opposite ways” in which the king and MM. les ministres can and must . . . bring corn “to the price and state it requires” ’ (ibid., p. 174). During the first half of this century, the re-examination of Boisguilbert’s liberalism, along with the problem of the nature and functions of money, are the two issues which form the axis for French studies on this subject. VII During the twentieth century there was an accumulation of books and articles reconsidering, completing and criticising previous writings on Boisguilbert. To simplify our approach within this abundant multiplicity, three waves amongst these studies may be identified. To start with, we shall consider publications in France during the first thirty years of this century. They lie in the wake of Boislisle, Cadet and Horn, and in the trend of a revival of interest in the authors writing on economics during the Ancien Régime which resulted most notably in Georges Schelle’s edition of Turgot’s works and correspondence (1913– 23), Georges Weulersse’s studies of the Physiocratic movement (1910, 1950, 1959), the creation of the Revue d’histoire des doctrines économiques et sociales (1908) and the collection of re-publications of early texts associated with this revue, and finally, in the 1930s, Paul Harsin’s publication of Law’s works and J. Y. Le Branchu’s publication of the Écrits notables sur la monnaie de Copernic à Davanzati (1934). However, studies of Boisguilbert remained somewhat marginal in relation to the wider trend which concentrated above all on the authors of the second half of the eighteenth century; apart from Paul Harsin’s work16 (1928), studies of Boisguilbert consist of theses defended in law faculties.17 The second wave is Anglo-Saxon and occurred somewhat later. Its themes were different. It was the time of debates on mercantilism and interest turned towards eighteenth-century France, for which the main historian in terms of economic ideas was Charles W. Cole. These studies include those of Hazel van Dyke Roberts (1935), C. W. Cole (1943, Chapter V) and, more recently, L. Rothkrug (1965, Chapter VI). Roberts’ book is still today the most

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complete analysis published on the subject, and in the Anglo-Saxon countries it played an analogous role to the one played in France by the works of Cadet and Horn.18 The American connection is also important for another reason, namely J. J. Spengler’s study, French Predecessors of Malthus (1942), which led Alfred Sauvy to focus on the economic authors of the Ancien Régime and to organise a program of publication for early texts, in addition to the French translation of Spengler’s work and the famous INED bibliography (1956). J. Hecht’s reference edition of Boisguilbert’s work and correspondence was published by INED in 1966. Finally, the third wave was the result of the first two and of what has been called the ‘Keynsian impetus’. Starting from the 1960s, large general studies gave way to a mass of articles dealing with the most diverse themes from very divergent theoretical perspectives. VIII If we skip over a curious emphasis on Boisguilbert’s ‘empiricism’ and his ‘practical experience’ in commerce19 which supposedly dictated his analysis and reform projects, French writing on his work in the early part of this century essentially reworked traditional themes. However, for two themes, those of monetary doctrines and free trade (particularly foreign trade), they are critical, and even reverse previous judgements. First of all, Boisguilbert’s ‘liberalism’ is strongly questioned, still on the basis of the passages dealing with foreign trade. Though he was in favour of the abolition of obstacles to the exit of commodities from the territory, Boisguilbert declared himself ‘unfortunately . . . a partisan of the bounties given to exportation in England. He praises the English for this institution. . . . Perhaps the clairvoyance of the author of Traité des grains fails in this instance’ (Frotier de la Messelière, 1903, pp. 82–3). Furthermore, ‘the suppression of exit duties would also have led him to request the abolition of grain entry duties’ (ibid., p. 86), which he did not do. The reasoning here differs from Horn’s approach, for whom the maintenance of import duties was merely an unimportant sacrifice to the ideas of the day. However, M. Horn is forced to admit that though the author of the Traité des grains has a very clear conception of the principles of commercial freedom, ‘he introduces reservations and restrictions causing singular infringements of it’ We believe that M. Horn did not attach enough importance to these reservations and restrictions, which allow us to class Boisguilbert amongst the protectionists. (Talbot, 1903, p. 51)

156 Appendix Thus Boisguilbert was supposedly incapable of ‘separating himself from the prejudices of his era’, and forgets, when he speaks about foreign trade, the natural laws and principles of liberty whose existence he recognised in the interior life of the nation. But with his practical mind so scornful of speculation, Boisguilbert is not concerned with the contradictions involved in his work. (ibid., p. 98) Even more serious than the ‘sin’ of incoherence is that the very notion of natural law is put into question. Thus he is not a free-trader. . . . He does not have total confidence in the laws of nature; their free interplay does not always suffice to procure good prices and therefore according to him, it is necessary to intervene and aid nature. (ibid., p. 55) The foundation of Boisguilbert’s doctrine is thus brought back to a simple argument ‘of the moment’.20 Moving on to the non-agricultural markets, Talbot goes so far as to describe Boisguilbert as a partisan of ‘industrial monopolies’, advancing this surprising and rather confusing judgement: ‘If therefore Boisguilbert is one of the first defenders of laissez-passer in the interior of the kingdom, he is not, or at least we have no reason to believe, that he was a partisan of laissez-faire’ (ibid., p. 98). While the analysis of free trade poses a problem because of the apparent ambiguity of Boisguilbert’s position, for Talbot, a similar ‘ambiguity’ is also to be found in the monetary theory presented in the Détail, the Factum and the Dissertation, seemingly making Boisguilbert supportive of a favourable balance of trade. It is true that from the time of the Détail, his monetary analysis appears to constitute a form of attack on ‘mercantilism’. But, first, to criticise money as the source of all social ills is excessive: ‘M. Horn states correctly that these are but whims deserving no attention’ (Talbot, 1903, p. 67); furthermore, despite this, for Boisguilbert ‘as for his contemporaries, the advantages of trade may be calculated according to the surplus of exports over imports, and the consequent entry of precious metals. This money, spread throughout the country, would provide a lift to economic activity’ (ibid., p. 77). It must be admitted, however, that the passages to which Talbot refers in support of his claim say nothing of the sort (Boisguilbert, 1695, 2nd part, Chapter XVIII). Finally, the problem of the nature of money, in the terms posed by Horn, is of interest to commentators. Is it a sign or a commodity? As we have seen, Boisguilbert’s texts are not very clear in regard to this issue. At this point the analyses are in favour of money as commodity (Talbot, 1903; Durand, 1922).

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IX The immediate pre-war period was dominated by the work by Hazel van Dyke Roberts: Boisguilbert, Economist of the Reign of Louis XIV (1935)21 which even today is one of the most complete and detailed studies from the point of view of economic theory. This is why it is appropriate to grant it a separate section, even though we shall only concentrate on a few important themes. We shall not spend, time examining certain obvious exaggerations such as the claim that a theory of the decreasing utility of money is identifiable in Boisguilbert’s work (1935, p. 159), or the areas of interest which were especially developed later on (the role of consumption, the mechanism of fluctuations), nor, finally, a subject which she presents in a sustained, lively manner (ibid., Chapters XVI and XVII), namely the striking analogies between Adam Smith and Boisguilbert’s work.22 The concepts we shall be concerned with here are money, price and equilibrium. Although Hazel van Dyke Roberts recognised that Boisguilbert did not broach the problem of quantitative theory, she immediately asserts nevertheless that ‘he accepted the fact that the general level of prices rose or fell with alterations in the quantity of money in a country’ (ibid., p. 208) without, however, according any importance to this phenomenon. As for the ‘money-sign’ issue, Roberts declares herself to be against Horn’s position and in agreement with the remarks made by Talbot and Durand. Metals are a form of wealth like other goods except in their monetary form in which they are not suitable for any kind of consumption. Their quantity is a matter of no importance: a high velocity of circulation of money is all that matters and it can be considered as a source of wealth. On this basis, Roberts intends to defend Boisguilbert against Horn’s accusation that he goes too far towards anti-mercantilism by claiming that money should not be placed ‘above’ commodities, but rather that it should be ‘below’. Roberts suggests that Boisguilbert’s point of view is a general one. If it is true that in an isolated exchange money can be considered as an ‘equal’ to the commodity for which it is being exchanged, on a general level, since it is not consumable, and is not therefore a form of wealth, it disappears from the accounts, even if the velocity of circulation affects the total amount of wealth for that period. Although all these commentaries, and some others which have been omitted, generally provide a better definition of the ideas in Détail or Factum, they do not, however, settle the question of monetary theory expressed in these works and, in particular, the issue of the nature and value of money. Does the fact that the metals used as a means of circulation are not a form of wealth conserve the nature of the money-commodity by this means or else does it make it lean towards the sign? And in the case of the money-commodity, how should one interpret the assertion that the quantity of money is of no importance? As we have seen, the resolution of these problems implies that of the question of prices.

158 Appendix Roberts emphasises that these are determined by supply and demand, with a predominance of demand in the short term. In the longer term, the ‘cost’ aspect dominates. Boisguilbert saw the maladjustment between prices and costs as correcting itself temporarily in the long run by the forcing of the high cost producers out of production. Thus while demand might be the fundamental factor underlying value, and while the interaction of demand and supply might determine it at a given time, nevertheless, in the long run, the cost of production must be covered if the product is to continue to be produced. (Roberts, 1935, p. 229) In this sense, Boisguilbert would assume ‘a fairly important position amongst the precursors of Alfred Marshall’ (ibid.). A connection is also made to Smith’s theory, which is interpreted in the perspective of Malthus and Marshall. The long-period price, covering costs and the entrepreneur’s profit, would be the ‘natural price’ while the short period is the ‘market price’ (ibid., p. 242). The difference between Boisguilbert and Smith (a difference which, as we shall see, divides their respective conceptions of equilibrium) would thus reside in Smith’s conviction that the market price always gravitates around the natural price, while Boisguilbert goes only so far as to express this as a wish (ibid., p. 244 and 245). The question of economic equilibrium and its achievement is therefore posed once again. To respond to it, Hazel van Dyke Roberts renews with the tradition mentioned above, whereby contradictory propositions23 are identified in Boisguilbert’s work on this subject, and she ultimately decides in favour of a reasoned, disillusioned and pessimistic liberalism. If agents blindly pursue their private interests, the general interest necessarily suffers. Although the equilibrium of competition is necessary for a state’s opulence, it would not be achieved automatically or else, if it was achieved, it would be despite the selfish behaviour of the agents, rather than thanks to it. As a general rule, equilibrium and harmony can only be attained if the agents, fully conscious of the desirable goal of public opulence, discipline themselves and restrain their cupidity. ‘Boisguilbert thus demanded the development of a new philosophy of economic relationships. Recognition of economic solidarity must take the place of the existing ideal of sauve-qui-peut’ (ibid., p. 187). Of course, one might question the debatable approach of attributing an ‘existing ideal of sauve-qui-peut’ to seventeenth-century France, that is, in short, a nineteenth-century liberal perspective against which Boisguilbert supposedly reacted. Nevertheless, for Hazel van Dyke Roberts, Boisguilbert’s opinion is clear. ‘In sum, a mistaken short sighted self-interest must be replaced by enlightened self-interest’ (ibid., p. 188) through which each individual

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becomes aware of the fact that the pursuit of his own private interest inevitably turns against him in the long run, and that on the contrary, in saving the others he maintains himself. For this reason Boisguilbert would never have agreed with Smith’s remarks on the ‘invisible hand’ (ibid., p. 311). Boisguilbert proposed a system based upon what may be termed socializedindividualism. There must be, he thought, voluntary submission of the individual to the group. The foundation of his social philosophy is that the interest of the individual must give way to the general interest when the two come into conflict. This subordination of self-interest to the general interest would be utilized to produce economic equilibrium. (ibid., pp. 186–7) But serious problems immediately arise. Is the individual capable of the lucidity required for the well-being of the group as a whole? And in this perspective, how should Boisguilbert’s famous formulas on the need for laissez-faire be interpreted? Roberts is pessimistic about the first point. She emphasises the passages in which Boisguilbert speaks of human nature as irremediably corrupt and condemns the stupidity of the people. She succeeds in dissociating an idealistic and enthusiastic Boisguilbert, annunciator of the Enlightenment, from a pessimistic Boisguilbert who doubted in the success of his own remedies and extolled the virtues of a return to a less complex social state (ibid., p. 188, p. 284).24 On the issue of the famous laissez-faire, Robert’s explanations are laborious. She claims that this laissez-faire relates only to nature (laissez-faire la nature), not to man himself (ibid., p. 252). To Boisguilbert laissez-faire meant, fundamentally, unrestricted economic opportunity for everyone; but it was here that he took a long-run view. Permanent security for everyone meant taking into consideration the economic solidarity of society. Therefore the freedom to pursue one’s own economic interest must be tempered on the part of the individual by economic justice for others. There was, in other words, in his ethical theory of laissez-faire a personal obligation of every man to be his brother’s keeper in the sense of not destroying him. (ibid., p. 253) Like all those hitherto described, Roberts’ position is unilateral, failing to take Boisguilbert’s theory into account on this delicate point, even if it is grasped better here than elsewhere.

160 Appendix X After the Second World War, studies on Boisguilbert’s work became fragmented, forming a veritable, non-figurative mosaic. The brief articles devoted to Boisguilbert are written from the most diverse, often opposing, perspectives and collating them does not enable one to identify a coherent overall construction. However, an effort was made simultaneously to secure a better understanding of Boisguilbert’s vocabulary and to explain the notions it involves (J. Molinier, 1958 and 1966; J. Nagels, 1970).25 It is the great eclecticism of these publications which is initially striking: it is not rare to see a single commentator maintaining implicitly divergent interpretations. Hence Boisguilbert was covered in praise for having, simultaneously, identified Say’s law, Walras’ general equilibrium and Keynes’ under-employment. Boisguilbert becomes the precursor of just about everybody, or, to reuse a telling expression, he becomes the Jochanaan of political economy (Lutfalla, 1981, p. 26). With this perspective in mind, J. Spengler (1966) drew up an impressive list of ‘concepts of which Boisguilbert had at least glimpses’, covering virtually the entire field of economic theory in its different approaches. L. Salleron also did this: ‘Of who and of what could Boisguilbert not be the precursor? This is a fate he shares with the majority of the economists of the seventeenth and the first half of the eighteenth centuries’ (Salleron, 1966, p. 41). Other authors are somewhat more generous: ‘there is no doubt,’ J. Féry asserted, ‘that the contribution of [Boisguilbert] is far greater than the enumeration of the merits for which he is willingly recognised’ (1966, p. 65). But this contribution is not individualised and the search for overall coherence was still a problem. Those, like J. F. Bernard-Béchariés (1964), who attempt to identify this obtain only very disappointing results: ‘Boisguilbert’s entire work is composed of three parts: a goal, a theory and a policy’ (ibid., p. 334). And there is more! This ‘entire’ work is in fact reduced simply to the Dissertation of 1707, since the author pushes aside the Détail and the Factum along with all the ‘other’ ‘polemical’ or ‘political’ writings. It is therefore better to conclude our enquiry thematically, leaving the authors somewhat to one side. First of all, the notion of general economic equilibrium still attracts attention. ‘The theory of general equilibrium, Say’s law, the harmony of interests, the benefits of free competition, all these points are developed in Boisguilbert’s writings’, J. Molinier stresses (1958, p. 3), for example; he also insists on a circuit approach (1958, 1966). Market equilibrium and the interdependence of activities are noted in a wider perspective by J. Schumpeter (1954, p. 216) and H. W. Spiegel (1975). The difficulties raised by these texts are not, for all that, resolved by them. The achievement of equilibrium always raises the same concerns: ‘in vain would one search Boisguilbert’s work for proof of this law of harmony to which he rarely returns, while he is far more willing to repeat . . . man’s natural tendency to break with proportions’ (BernardBéchariés, 1964, p. 342). For other authors, however, the problem is less important. Although Boisguilbert only describes the interplay of the mechanisms of competition (Spengler, 1966, p. 13), the

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flexibility of the exchange relations must generally assure equilibrium. Like A. Kubota (1966, pp. 80–2), Spengler refers to immediate adjustment through prices. In certain cases the time factor can be ignored ‘since the forces making for self-correcting adjustment and self-maintenance of a price system could work somewhat in the manner Walras later described’ (Spengler, 1966, p. 9). Nevertheless, after Keynes it becomes difficult to ignore Boisguilbert’s emphasis on the role of demand and the downward inelasticity of certain prices, bringing them to cohabit in a pacific manner with ideas reminiscent of Say or Walras. For example, J. Molinier, who emphasises the presence of Say’s law in Boisguilbert’s writings, finds himself compelled to assert the opposite when he tried to explain the principle according to which ‘consumption and revenue are one and the same thing’. XI Boisguilbert’s great insistence on expenditure and global demand is put into perspective by many authors who see in it the origins of Keynes’ multiplier theory (McDonald, 1955 and 1956; Molinier, 1958; Leduc, 1960, etc.). Not only was Boisguilbert a pre-physiocrat; 250 years ago, at a time of chronic economic depression and secular decline in France, not only did he discover that economic depression was the consequence of a lack in effective demand on the part of the consumers; but he also denied the existence of an automatic trend towards an equilibrium of full employment, recognised the principle of the propensity to consume, studied the proble

m of the investment of savings and identified the true factors

which determine the level of national revenue. (McDonald, 1955, p. 789)

Stephen McDonald’s article is the most systematic Keynesian reconstruction. In it, Boisguilbert’s ideas and methodology are portrayed as being very close to macro-economic analysis on five accounts: the factors which determine the global product (aggregate demand which is itself a function of the distribution of income), economic cycles with endogenous turning points, reasoning in monetary terms, the two complementary functions of money and the influence of the tax system on the volume of national product. The author only examines in detail the first two points mentioned. As far as the first is concerned, besides the analogies which have already been remarked upon, McDonald emphasises above all the absence in Boisguilbert’s work of an analysis of

162 Appendix the influence of the interest rate on the volume of investment (1966, p. 104). Admittedly a certain type of expectation is implicitly taken into account: The expressions ‘that if he earns nothing, he loses nothing’ and ‘for lack of security’ are both evidence of a considered evaluation through the avoidance of risk and of the possible profit which an investment might offer, before deciding whether or not to commit his saving to the new investment. (ibid., p. 110) But it is regrettable that Boisguilbert did not attempt to complete [his theory of fluctuations] with a study of the interest rate, its relations to the quantity of money and its influence on decisions to save or invest. Only an indirect indication informs us that Boisguilbert was aware of the role played by the interest rate in the decision to invest. He gives the example of small retailers in Paris to show that even a usurious interest rate does not prevent investment so long as consumption is maintained. (ibid., p. 111) However, McDonald neglects important passages which render Boisguilbert’s contribution relevant, in relation to expectations as well as for the effects of the interest rate. As for the second point concerning fluctuations in economic activity, following Roberts, McDonald attempts to specify its modes. To this end he emphasises in particular the principal cause of the cycle: ‘the extreme fluctuations in agricultural revenue’ (ibid., p. 112) produced by the alteration in periods of scarcity and plenty. M. Lutfalla (1981, p. 31) remarks on the variable duration which Boisguilbert attributes to these agricultural cycles in his different texts. McDonald also emphasises the parallel existence of a secular fall in revenue due to the tax system (1966, pp. 117–18); however, the importance of his contribution lies in the discussion regarding the mechanism for the worsening of economic crisis. According to Boisguilbert, a fall in agricultural prices causes a fall in the purchasing power of those whose income depends on it and the decrease in consumption brings about a cumulative process of contraction of revenue, production and employment. But the cycle cannot solely be analysed on the basis of agricultural income: does not a fall in the grain price increase the purchasing power of the other members of society and cannot an increase in consumption balance out the fall originating in agriculture? Boisguilbert’s texts allow two elements of response to be forwarded to explain the propagation of the depression. Both of them are based on transfers of income linked to a deformation of the system of relative prices.26 First, this transfer of income takes place in favour of the landowners and creditors, a social category whose propensity to consume is weaker than that of the farmers: this

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transfer therefore necessarily implies a decrease in the global propensity to consume. Second, this transfer must also be effective, in other words the farmers must honour their debts and obligations, which is far from always being the case. Confidence, which is the ‘soul of trade’, can then be affected and restrictions on credit ensue throughout the economy. Here McDonald still recognises a certain role for expectations, but only so far as investors are concerned. It is particularly in relation to such an analysis that the judgements concerning a possible integration of real and monetary aspects of Boisguilbert’s theory must be evaluated as a new aspect of the discussion about his conception of money. For example, this integration is rejected by Molinier (1958, pp. 24–5) who talks of a simple superimposition of these aspects without any interference between them, such that the analysis in monetary terms only doubled the one made in real terms in regard to practical concerns connected to taxation. M. Leduc (1960) is of the opposite opinion: the monetary analysis enables the introduction of a temporal aspect in the processes, and this is why, despite appearances, Boisguilbert’s remarks are different to Say’s.27 Still in the perspective of the exchange theory, and if the superficial remarks such as the one which consists in criticising Boisguilbert for centring his analysis on ‘circulation’ and neglecting ‘production’ (Molinier, 1958, pp. 19 and 33) are ignored, it remains for us to note, along with M. Lutfalla, that as opposed, for example, to the Physiocrats, Boisguilbert does not misuse the notion of ‘common year’ (année commune) to establish his demonstrations (1981, p. 30). This remark is no doubt correct, but it requires precision in as much as the taking into account of the common year in turn assumes an average established over the flows of several periods, and the integration of time to the analysis is not generally affected, as Ferdinando Galiani correctly emphasised (1770, eighth dialogue). Boisguilbert’s analysis, founded on the agents’ expectations and a stock-flow mechanism linked to them, largely avoids many of the criticisms later formulated by Quesnay’s adversaries. XII A final perspective in the interpretations of Boisguilbert: after Say, Walras and Keynes, Marx appears in J. Nagels’ study (1970). In the general line of interpretation of the Jansenist current proposed by Lucien Goldmann in 1955,28 Nagels attempts both to situate Boisguilbert in his socio-economic context and to grasp his specificity as a thinker. On the first point it should be admitted that according to Goldmann’s canon of interpretation, Nagels has the advantage: Boisguilbert is the ideal type of a bourgeois ennobled through the judiciary and supposedly restrained in his social rise by Louis XIII and Richelieu’s policy, and then by Mazarin, Louis XIV and Colbert (1970, pp. 15 and 17 especially). On the second point, the harmony and concordance of economic interests of the different social classes is emphasised, thereby reflecting ‘the wish for universality of the ascending bourgeoisie’ (ibid., p. 21).

164 Appendix When Boisguilbert speaks of harmony . . . [he] describes the world as it ought to be. But when he examines the world as it is, he sees nothing but conflict, battle and violence. . . . Not only did he perceive the existence of two opposite poles, those of ‘wealth’ and ‘poverty’, he also understood that these two poles are indissociable. . . . This means that he perceived the unity of opposites. . . . In Boisguilbert’s work it is not at all surprising to find this juxtaposition between an idealist’s demand for social and economic harmony and an extreme awareness of social antagonism. This is the objective expression of the social classes held back in their ascension by the existing relations of production. (ibid., p. 22) However, the two aspects identified are not compatible: ‘we are rather of the opinion that in Boisguilbert’s work there is a clear conflict between the sociologist and the economist’ (ibid., p. 50). Thus, on the basis of too general an argument of the sociology of knowledge, J. Nagels manages to separate two aspects of Boisguilbert’s thought without attempting to integrate them in a coherent theoretical whole. Furthermore, there has been an increase in Marxian and Marxist studies which tend to explicate Marx’s remarks on Boisguilbert (Fernandez-Diaz, 1978; Cartelier, 1989; Dupuigrenet-Desroussilles, 1989) or, from a Marxist perspective, to identify traces of Marxist analysis in Boisguilbert’s work (Fernandès, 1989; Ivanciu, 1989) or to place Boisguilbert in the history of economic thought (Kuczynski, 1989; Nagels, 1989). J. Cartelier’s remarks (1976) adopt a similar perspective; he attempts to interpret Boisguilbert’s theory in the light of classical thought, stating that the concept of proportionate prices has no connection with general equilibrium of a Walrasian type, and that utility has no role in it. He claims that in fact this concerns a system of production prices lacking only the expression of a rule of distribution of the surplus (1976, pp. 29–31). To conclude29 this brief review of the literature on Boisguilbert, a resurgence of the ‘Jansenist thread’ should be noted. Following Cadet and Roberts, J. Hecht (1966) emphasises Boisguilbert’s education at the Petites Écoles of Port-Royal. At the same time, the interest in the political, social and economic thought of the Jansenist authors was revived by the publication by L. Goldmann (1955) and that of L. Rothkrug (1965) as well as a whole series of works by R. Taveneaux (1965, 1973, 1977). We have seen Nagels’ theoretical application. The studies by Keohane (1980), Faccarello (1984) and Perrot (1989) are to be situated in Rothkrug and Taveneaux’s perspective which brings P. Nicole’s texts to the fore.

Notes

Introduction: A fin de règne Alceste 1

2 3

4 5

6 7 8 9 10

From 1689 to 1715 the Controllers General of Finance (in other words the ministers of finance) were: Pontchartrain (20 September 1689 – 5 November 1699), Chamillart (5 November 1699 – 20 February 1708) and Desmaretz (20 February 1708 – 15 September 1715). Letter to Pontchartrain, 14 June 1692 (in Boisguilbert, 1691–1714, p. 255). Colbert’s nephew and Desmaretz’s brother. Like Saint-Simon, he met Boisguilbert in Rouen. ‘It was not M. Desmaretz, but his brother, M. de Vaubourg, who, after living in Rouen for fourteen months, during which time I saw him every day, openly declared that had M. Colbert known me he would have taken me on whatever the cost, on account of my great practical experience of trade and agriculture. Rejecting the speculation of which M. Desmaretz accuses me, M. de Vaubourg presents my intellect in a manner which I cannot have the honour of telling you’ (Boisguilbert to Chamillart, 27 October 1703, p. 295). August 1704, in Boisguilbert, 1691–1714, p. 326. ‘M. Sainte-Beuve devoted the last chapter of volume III [in the work entitled PortRoyal] to the principal students of Port-Royal (Jérôme and Thierry Bignon, Racine, Le Nain de Tillemont, etc.). I am pleased to repair a serious lacuna in adding Boisguilbert’s name to his list. In the advertisement to the reader in one of his translations, the Économistes’ precursor . . . expresses himself thus: “Even if it seems that in our days all the sciences have been taken to the highest point possible, it can be said that the science of making the Greek or Latin authors speak our language has gone even further; it is impossible to add anything to the works of these Messieurs de l’Académie, and Monsieur d’Andilly, who has surpassed himself in his Josèphe, and these famous anonymous writers who are so well-known throughout France; therefore I should like to confess naively that, should I be so lucky that this small work is not found to be of the greatest imperfection, then I owe it to whatever education I had among them in my youth” (Histoire romaine écrite par Hérodien [Roman history as written by Herodien], 1675)’ (Cadet, 1887, p. 53; Cadet’s emphasis). Quoted by Cadet, 1887, appendix, pp. 305–6. To Desmaretz, 21 August 1709, p. 439; Desmaretz was Colbert’s nephew. To Chamillart, 2 December 1704, p. 344. Cf., for example, A. Talbot, 1903, p. 22. It is true that Boisguilbert adds: ‘of whatever kind they may be’. If the plural here relates to the needs and not to the surplus (to which it could very well relate given the rather

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Notes to Chapter 1 unorthodox agreements often found in Boisguilbert’s writing), this remark is problematic. But other quotations from the text corroborate the suggestion made here.

11 The use of the word besoin in the sense shown in the text appears to be specific to Boisguilbert, while that of the words fruits, revenu and bien seems to correspond to general usage. For example, the dictionary of the Académie française of this period, defines le bien in terms of la richesse, but also by ‘the fruits which the earth produces’, thus conferring on it the meaning of revenu; cf., furthermore, the use made of it by Domat, here below. 1 The context (I): Social and political Augustinianism 1

The contents of Boisguilbert’s library are unknown. Thus, any hypothesis concerning his reading can only be based on connections within the work. For example, J. Hecht (1966a) and J. Wolff (1973) emphasise the Anglo-Saxon authors (Hecht, pp. 160–1; Wolff, p. 188), also adding abbé Dubos (Hecht, ibid.) to whom Boisguilbert refers in a letter (22 June 1704), and particularly Jean Bodin (Hecht, p. 162; Wolff, p. 188) whose importance will become apparent in this study. The late publication of Intérêts de l’Angleterre (1703) limits the possible influence of Dubos.

2

For the history of the Jansenist movement in the seventeenth century, one may refer to works by R. Taveneaux (1965, 1973 and 1977), the work of L. Cognet (1961), as well as that of J. Delumeau (1971) and to their bibliographical references. It is obviously useful to refer also to the authors themselves, amongst whom Pascal and Nicole are the most important for our concerns here. On Pascal, see in particular J. Mesnard (1976); on Nicole, E.D. James (1972).

3

Any reader who is somewhat acquainted with Jansenist thought cannot but recognise Boisguilbert’s allusion. On the quarrel of right and fact, see L. Cognet (1961, Chap. V) and R. Taveneaux (1965, pp. 14–15) for a succinct account.

4

1705c, p. 767: ‘only God is infallible, especially in matters of fact’.

5

Cf., for example, this passage from the Discourse on Method: ‘And through all the nine years which followed I did nothing but wander here and there in the world, trying to be spectator rather than actor in all the plays which were being presented there.’ Furthermore, Descartes also declares: ‘Just as actors, called up on stage, wear a mask to hide the redness of their faces, so also, ready to show myself in the theatre of the world, where up until now I have held myself as a spectator, I come forward masked.’

6 7

Cf., the suggestive study by Ph. Beaussant, 1981. In Boisguilbert’s writing the theatrical metaphor extends to ballet and opera as well. Thus certain corrupted agents ‘sing the same language’ (1705c, pp. 753–4) and ‘also work night and day at making this concordance of entirely false voices’ (ibid.).

8

‘Art is firstly “entertainment” and a lie: it adds a superfluous mask to the reality created by God. This explains the hostility on principle in regard to literature and its formal subtleties . . . Writing, like painting or music, must translate truth rather than the refinements of taste.’ (R. Taveneaux, 1973, p. 169).

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9 Quoted by Taveneaux, 1973, pp. 169–70. 10 1667, and again in Nicole, Essais de morale, vol. 3, 1675, pp. 201–46. 11 Cf. Racine, 1666, p. 309: ‘And what do novels and plays have in common with Jansenism? Why do you consider these intellectual works to be a little honoured occupation amongst men and a horrible one before God?’ And he adds the following comment (ibid.): ‘Saint Augustine cites Virgil as often as you cite Saint Augustine’, along with another allusion to ‘the’ quarrel of the time in this ironic remark: ‘In regard to the falsities of which he accuses me, I would willing ask this venerable theologian how it is that I have erred, whether it is by right or by fact?’ Nevertheless, Racine was reconciled with the Jansenists: Cf. 1697. 12 Obviously it is not contradictory that Boisguilbert also uses this term in his analysis of ‘speculation’ and ‘practice’· 13 Boisguilbert to N., 4 September 1698, p. 263. 14 In seventeenth-century French, the word ‘balance’ also means ‘equilibrium’. Boisguilbert employs it in both senses. 15 See, for example, 1705c, p. 708. 16 Equilibrium is the ‘sole protector of general opulence’ (1707b, p. 993); ‘the harmony of a state’ is defined by ‘a general opulence’ (ibid., p. 985). In the precise sense of material wealth, in a classification of goods, the word ‘wealth’ is also associated with ‘opulence’: cf. ibid., p. 974 where Boisguilbert declares that ‘neither gold nor money received this title of opulence’ while, elsewhere, he speaks of ‘wealth’. 17 Letter to the Controller General, 1 July 1704, p. 302. 18 Emphasised by Boisguilbert. Cf. also 1707b, p. 999: during prosperous periods, money ‘was no sooner brought to a place than one thought of moving it on, and it was thoroughly accustomed to passing through some several hundred lodgings in a single day’; in times of economic crisis, ‘it walks at a snail’s pace . . . becoming paralytic wherever it stops, and terrible machines are needed to move it on from there’. 19 R. Mandrou, for example, 1973, Chapter V. 20 An ambiguity which can also be identified in the work of Domat, Nicole, and even Boisguilbert, who speaks of ‘the uncertainty of the sciences, and consequently of theory’ (to the Controller General, 1 November 1704, p. 331). We should not forget Pascal’s ‘Descartes, useless and uncertain’. For an example of the debate on this theme, cf. G. Rodis-Lewis, 1951. 21 P. Nicole, 1670, pp. 8–9: ‘this body is a machine composed of an infinite number of pipes and springs apt to produce an infinite diversity of actions and movements, either for the conservation of the machine, or for the other uses in which it is employed, and . . . the soul is an intelligent nature, capable of good and evil, happiness and misery.’ 22 La logique ou l’art de penser, by Antoine Arnauld and Pierre Nicole (first edition 1662), also known as Logique de Port-Royal. 23 The influence of Saint Augustine ‘spread throughout the century. Everybody cites him, uses him, comments on him, even if they have hardly read him . . . His intervention is everywhere, the sovereign authority . . . Eventually it became an obsession; one no longer dared formulate reservations or criticisms; Saint Augustine is always right in everything. In 1690 amongst the errors of the Jansenists, Rome criticised the opinion that it was enough for a point of doctrine to have been professed by Saint Augustine to

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authorise it to be upheld despite and against everyone, the Pope included’ (Marrou, 1955, pp. 170–1). 24 Cf., for example, the tightrope walking Pascal who, in his Écrits sur la grâce, tried to distinguish the position of the ‘disciples of Saint Augustine’ clearly from that of the Molinists and the Calvinists. We know that Mazarin described Jansenism as a kind of recycled Calvinism (calvinisme rebouilli). 25 E.D. James, 1972, Part I, Chapter I in particular. 26 There is some truth in J. Viner’s peremptory assertion (1978, p. 131) that ‘Pierre Nicole and Jean Domat were the only authors to apply the rigorous doctrine systematically to the economic domain’. It is true in the sense that Nicole and Domat clearly pose the problem of the co-ordination of economic activities, but this is also to forget Boisguilbert. It is mistaken in as much as, apart from Boisguilbert, it omits authors such as abbé Duguet, even though his system is ultimately closer to Fénelon’s than to Nicole or Boisguilbert’s. 27 See also Nicole, 1675, pp. 115–16 for example. 28 Nicole (1675, p. 117) refers to Hobbes here: ‘if he who said that they [men] are born into a state of war and that each man is naturally the enemy of all other men, had sought with these words simply to represent the disposition of men’s hearts between one another, without trying to present it as legitimate and just, he would have said something as close to the truth and experience as what he claims is contrary to reason and justice.’ Nicole, however, could very well be considered closer to Selden than to Hobbes (on these two authors, see R. Tuck, 1979). Besides, there is no contract theory amongst the seventeenthcentury Jansenists. 29 1689, p. 7; cf. also 1697, pp. 236 and 241. 30 Cf. also ibid., p. 119. 31 Boisguilbert, 1705c, pp. 748–9. The passages in A. Smith’s Wealth of Nations which take up Nicole’s theme are well known; see for example, 1776, I, ii, 2: ‘man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and shew them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.’ 32 See 1675, pp. 153–5. 33 The term ‘reason’ has many meanings, all of which are used here. It relates to the faculty which allows one to discern both the sovereign good and the means of obtaining it. It also refers to the faculty of distinguishing true and false in the sciences. Finally, it designates the simple ability to establish the best means for obtaining an end, whatever it might be. 34

A wealth of literature has recently developed around this theme, without limiting itself to the period we are interested in here. See, in particular, the works of L. Rothkrug (1965),

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A.O. Hirschman (1977), L. Dumont (1977), N.O. Keohane (1980); as well as the articles by M. Raymond (1957), A.O. Hirschman (1982), G. Berger (1981). 35 See, for example, L. Rothkrug, 1965; N.O. Keohane, 1980. 36 W. Riese, 1965. 37

A famous echo: ‘Self-interest, which we accuse of all our crimes, often merits praise for our good intentions’ (La Rochefoucault, maxim 305).

38 There are many indications that Boisguilbert is indebted to his reading of Bodin and that he should be placed in his tradition. Besides what is said in the next chapter concerning the method, history and nature of taxes, the probable following borrowings should be noted. The image of the ox and cart which Boisguilbert uses could come from République, as well as the constant allusions to the administration of the Turks (an echo which is also found in Montchrétien, de la Croix, etc.). The conception of war is similar: it ‘puts all things in motion, purges vile humours and in some way charms the vivacity of a nation which does not naturally enjoy rest, and which often even finds it damaging’ (Boisguilbert, 1704b, p. 843; cf. Bodin, 1568, p. 91; but also cf. Richelieu, 1632–8, p. 381. Contra: E. De la Croix, 1623, p. 110: ‘War is not a remedy for the illnesses of the state’). Finally, Bodin stresses the role and skills of immigrant French workers in Spain. Cf., for example 1568, p. 92: ‘the greatest wealth in Spain, which is moreover deserted, derives from French colonies filing into Spain, principally from Auvergne and Limousin; to the extent that in Navarre and Aragon almost all the wine growers, labourers, carpenters, masons, joiners, stonecutters, turners . . . are French, for the Spanish are incredibly lazy, apart from in battle and trade, and for this reason the active and obliging Frenchman is well liked by the Spanish.’ See Boisguilbert (1705c, pp. 757–8) where this problem is discussed. Other examples could be put forward. It is known that Bodin was copied widely: Montchrétien plagiarises him, just as Colbert later plagiarised Richelieu. 39 M. Raymond (1957, p. 239) writes: ‘My intention is to show that the sources of the philosophes optimistic sociology should be sought partly in the pessimistic sociology of the seventeenth century, and that a sombre Christian morality concerned with driving self-love into a tight corner, by reaction, contributed to the emergence of a morality founded on interest.’ In fact this was not so much a ‘reaction’ as a development, in which Boisguilbert is an essential moment. Incidentally, Nicole was extremely fashionable in the eighteenth century. Even Voltaire declared that ‘his Essais de morale which are useful to humankind will not perish. In particular the chapter on the means of conserving peace in society is a masterpiece of its type, unequalled in Antiquity’ (cf. Berger, 1981).’ 40 Cf., notably the extensive developments of this theme in Le Droit public (1697). 41 Contrary to what E.D. James claims, this emphasis is not specific to Domat, and can also be identified in many places in Nicole’s work. Nicole is simply of the opinion that this quality has few opportunities to manifest itself in a hostile environment (cf., for example, 1671, p. 43). 42 Taking into account the historical evolution of societies and the relations between states nevertheless poses several problems to Domat, as it does to Boisguilbert. Unfortunately it is impossible to expand on this theme in the context of this analysis. 43 By hiding Himself, God ‘induces our vigilance and work’: cf. ibid., pp. 173–4.

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2 The Context (II): On some problems in the governing of an ordered state 1

2

3 4 5 6

7 8 9

10

11 12

Cf. Domat, 1697, p. 2 ‘Everyone knows that human society forms a body in which each person is a member; and this truth which Scripture teaches us and which the light of reason renders evident, is the foundation of all duties relating to the conduct of each towards the others and towards the body. For these sorts of duties are no more than the functions appropriate to the obligations of each through the rank they hold within the body . . . [God] prescribes to each individual the duties appropriate to his condition and state.’ It is God who ‘distinguishes some to grant them another sort of power, whose ministry extends . . . to everything concerning society; and he grants this power variously in kingdoms, republics and other states, to kings, princes and other people he elevates through birth, elections, and the other means by which he commands or allows those he destines to this rank to be called there’ (1689, p. 28). Evoking Bossuet’s emphases in his address to the king and court (You are Gods), Domat concludes that ‘it is God himself which they represent in the rank which elevates them above others’, and that they hold the very place of the divinity there; ‘and it is for this reason that He [God] himself calls Gods those to whom He communicates this right to govern and to judge them’ (ibid.). On the issue of the political attitude of the first Jansenists already discussed, see J.A.G. Tans (1956). Ibid., p. 187; see also Domat, 1697, pp. 18–19. The word ‘republic’ is taken here in its specific meaning as a form of a state, rather than in the general meaning of the time which took it as a synonym for the word ‘state’. P. Nicole, 1670, pp. 198–9: if we were to attribute power to merit, ‘who would we choose? The most virtuous, the most courageous, the wisest. But here we are helpless: each one would claim that he is the most virtuous, the most courageous or the wisest. Let us therefore attach our choice to something exterior and incontestable. He is the eldest son of the King; this is clear; there is no doubt about it; reason cannot do better; for civil war is the greatest of evils.’ See the analysis of République presented by P. Mesnard, 1969, Book V, Chapter III. These Discours were published for the first time in Nicole’s De l’éducation d’un prince (1670). ‘The grandeurs naturelles are those which are independent from the fantasy of men because they are the real . . . qualities of the body and soul, rendering one or the other more estimable, such as the sciences, the illumination of the mind, virtue, health and strength’ (Pascal, 1660, p. 367). ‘The grandeurs d’établissement depend on the will of men who were right to believe that they ought to honour certain estates and attach some form of respect to them. The dignities and nobility are of this type’ (Pascal, 1660, p. 367). And once again: ‘injustice consists in attaching natural respect to the grandeurs d’établissement, or in demanding establishment respect for grandeurs naturelles’ (ibid.). Like Nicole, Domat returns to Pascal’s distinction in a more attenuated form (1697, p. 202). And like Nicole, he thought that the grandeurs d’établissement ought to be accompanied by external splendour (1697, p. 35). Cf. Nicole 1670, pp. 191–2: ‘The pomp and brilliance which accompanies the state of the grands is not what makes them

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13 14 15

16

17

18 19 20 21

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worthy of honour; but nevertheless it is what makes them honoured by most people. And because it is good that they be honoured, it is also just that grandeur be joined to some exterior magnificence. For men are far from spiritual enough to recognise and honour in them the authority of God, were they to see it in a state which is ordinarily an object of scorn and dislike. Thus, in order that grandeur make the necessary impression on their minds, it is necessary that first of all it impresses their senses. This is what makes riches necessary to the grands in proportion to the degree to which they are raised.’ On the problem of property, Pascal’s thought is also more radical (see Pascal, 1660, p. 366). Letter to Chamillart, 23 December 1704, p. 354. See, for example, 1704d, pp. 969–70; 1705c, pp. 751, 773; 1707a, pp. 889, 926, 948; 1707b, pp. 1005–6, etc. As N. Matteuci (1959) remarks, it is incorrect to see Domat as the ancestor of the civil code. Without going so far as to claim that Domat was nothing more than a petty jurist from Auvergne (ibid., p. 83), there is no doubt that the French authors who have studied his work (R.-F Voeltzel, 1936; B. Baudelot, 1938; P. Nourrisson, 1939; and R. Maspétiol, 1960, for example) may have found in it an originality which was not really there. Domat’s influence was nevertheless far from negligible, as the re-publications of his works prove. He consolidated the distinction between private law and public law, even if his conception of public law is rather extensive (Maspétiol, 1960, pp. 710–11). Furthermore, his treatise was the first legal work in French (Baudelot, 1938, p. 46). Cf. 1697, p. 190: ‘the precedence of one order over another, and of people in one order over those in another, must be distinguished. For just as in each order there are different degrees of honour, dignity and authority, the effect of the dignity of an order above another is only that one must compare people of different orders according to the rank each of them has in their own.’ As we have seen, by using an organic image Boisguilbert placed the poor in the most noble and fragile parts of the body: the eyes and the head, where the monarch was traditionally placed. Several Jansenist positions relative to the question of the rate of interest are presented in R. Taveneaux (1977, Chapter II in particular), J. Viner (1978, pp. 143 and following) and G. Berger (1981, pp. 279–81, on a text by Nicole). Domat’s position does not generally interest commentators. See 1689–94, pp. 232–9 in particular. This concerns the taille which was a distribution rather than a quota tax. The immense body of literature on the question is analysed, for example, by J.-B.M. Vignes (1909) to which the reader may wish to refer. The same reasoning is found in Arnauld in relation to luxury (cf. also note 12 above): ‘one cannot condemn as luxury everything which surpasses the bare necessities. The reason for this is that there is another legitimate use of these things which initially appear to be superfluous. This is the distinction of conditions amongst men, which has only been introduced since sin; but which, in the state to which sin has reduced them, has become necessary; such that Christian religion took care not to abolish it . . . For while it is useful for there to be different estates, even amongst the faithful, it is also useful that there be means of recognising them, inspiring in people’s minds the sentiments of respect and reverence which they ought to have towards those who are of a more elevated condition; this is the end served by all superfluities’ (quoted by R. Taveneaux, 1965, p. 91).

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22 J. Chanteur, 1973; R. Derathé, 1973. 23 M. Wolfe, 1968. 24 ‘The tributs are just as legitimate a tax commanded by the word of God himself; that can be the payment of any debt, and this to the sol per livre of the goods one possesses in a state’ (1707a, p. 942) 25 From which emerges an acknowledgement of a (passive) right of resistance by the subjects in this matter. Cf. 1705b, pp. 671–2: ‘Now, whoever orders something beyond his force, commands one not to obey; nobody, not even the most rigorous Casuists, ever believed that it was a sin to fraud the droits d’aide, and no one has ever accused himself of these faults which are committed every day, though the payment of taxes is a divine precept . . . However, since nowadays the contrary is practised without any scruples, one must suppose that something new has emerged, which certainly is the demeaning of justice.’ It should be observed that the first sentence is a new echo of Bodin’s opinion (‘Otherwise, if one commanded something impossible, it would not be to command . . . Do you think that there has ever been so stupid or iniquitous a Legislator as one who wished to command what cannot be done?’). 26 On the debates surrounding the possessions of the Church and the taxation of the clergy, cf. J.-B.M. Vignes, 1909, Part III, Chapter I, and in particular the contributions of two important authors whose work Boisguilbert appreciated: the jurist Guy Coquille and François Paumier. Hubert Méthivier (1981, pp. 136–7) recalls the position of the Estates General of Orléans and Pontoise (1560 and 1561): at the first, the third estate (in fact, what was later called the ‘robe’) demanded ‘the suppression of gifts and land legacies to the Church’ (p. 136). ‘In Pontoise, the deputies attacked the fortune of the clergy violently . . . whose income ought to contribute to settling the state debt. The temporal goods of the Church should be partially sold (42 million out of an estimated total of 120 million) and investments would be made whose income would be shared between the king and the Church.’ This demand was not uniquely that of the third estate; the nobility were also sitting in Pontoise, while the clergy met elsewhere, in Poissy. Furthermore, in the declaration of Saint-Germain, 19 April 1639, Richelieu ‘proclaimed the precariousness of ecclesiastical property which is the gracious gift of the king, which he can reclaim if necessary’ (p. 250); and Louis XIV speaks of ‘these mysterious names of franchise and freedom of the Church, with which they will perhaps attempt to dazzle you’ (quoted, ibid., p. 283). 27 1695, p. 627: ‘the more these same people are elevated, the more they want to distinguish themselves in the recompense they give the Church, in spectacles, and ultimately in all occasions, with the exception of the rights of the King.’ 28 Bodin may be evoked again here. 29 Pasquier Quesnel in particular; cf. R. Taveneaux, 1965, Chapter VII. 30 A. Arnauld, quoted by R. Taveneaux (1965, pp. 88–9). 31 Arnauld, quoted by R. Taveneaux (ibid., p. 88). 32 Cf. Richelieu, 1632-8, pp. 365–6: ‘There is no pest so able to ruin a state as flatterers, slanderers and those souls with no other intent than to form conspiracies and intrigues in courts. They are so industrious in spreading their venom through diverse incorruptible means, that it is difficult to guard oneself from them, if one does not keep a close watch . . .’, etc. 33 Pp. 709, 717, 747, 762, 775, 1005, 1009, for example.

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34 1706, p. 814; cf. also, for example, the letter to Chamillart dated 6 January 1704, p. 300. 35 Ministers institute bad measures ‘with the last suffering, but it is as impossible for them to use it differently as it would be for a subject, born in error, to embrace and profess the catholic religion in a country where there were none but heretics’ (1707a, p. 927). Cf. also 1695, p. 653. 36 It includes ‘almost all working people, almost all the poor, most women of a lowly condition and all children. All these people think of almost nothing throughout their life other than satisfying the needs of their bodies, finding the means to live, sell and buy; and even then their thoughts about all these objects are only rather confused’ (ibid., p. 40). 37 Letter to Brossette, 15 June 1704 (Boileau, p. 689). 38 Quoted by P. Nourrisson, 1939, p. 23. 39 For example, the apparent opposition between two natural laws: one which stipulates that one can dispose of one’s goods freely, and the other which says that the goods of parents are passed on to the children. 40 The rights relating to fiefs or to the cens tax, etc. could therefore have appeared to be useful at a given moment of history and state of society. 41 Furthermore, recourse to history was common amongst political writers in France at the end of the seventeenth century; cf. D. Richet, 1969 and 1973. Each interprets it in their way and, of course, finds what they are looking for in it. 42 The regencies of Catherine de Médicis, Marie de Médicis and Anne of Austria. 43 Boisguilbert qualifies this with the declaration ‘that one is very willing, for the moment, to leave them in peace . . . until a more commodious time’ (ibid.). And again, p. 687: ‘As has been said, for the present moment, grace will be given to the partisans of the aides, although they are responsible for more than half the causes of this disorder . . .’ 44 Richelieu’s work was published for the first time by French immigrants in Holland after the revocation of the Edict of Nantes in 1685, and constituted a weapon in the hands of those opposed to Louis XIV’s regime. Cf. L. André, 1947, p. 71. He may also have launched the fashion for ‘political testaments’: thus the Testament politique de . . . Colbert (1693) and a Testament politique de . . . Louvois were published, both of which were apocryphal, written by Courtilz de Sandras. And Boisguilbert himself published an edition of his works in 1707 under the title of Testament politique de Monsieur de Vauban. The authenticity of Richelieu’s Testament was contested, although today it no longer gives rise to doubt (cf. L. André, 1947, and also Henri Hauser, 1944). 45 Boisguilbert refers to Richelieu with praise on numerous occasions. This proves that he must have read the Testament politique (even though to my knowledge he never mentions it), and that he only knew of Richelieu’s action through his writings; for it was under his ministry that taxes experienced a huge increase, and that all the practices condemned by Boisguilbert were accentuated. On the other hand, in the Testament the cardinal criticises the courtesans strongly, inveighs against the traitants, claims that there are ‘proportions’ to respect between the burden of taxation and the capacities of the contributors and even proposes to reduce, or abolish, the taille! . . . Without considering the British authors, it is in Richelieu (amongst others) that Boisguilbert might have read that ‘gold and silver are the tyrants of the world and, although their possession and their Empire is unjust in itself,

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it is sometimes so reasonable that its domination must be suffered, and sometimes it is so disorderly that it is impossible not to despise the yoke as entirely unbearable’ (1632-8, p. 428). We have already referred to Richelieu’s attitude towards the possessions of the Church. The cardinal also criticises ‘library people’ and wishes to accord the greatest care to the choice of councillors. 46 See, for example, the writings of P. Goubert. 47 Cited by H. Méthivier, 1981, p. 283. 48 Cf. Scipion de Gramont, 1620, pp. 294–6. 49 This would be a compromise between the strict thesis defended by L. Goldmann (1955) and the wider one suggested by R. Mandrou (1957, pp. 308–9), according to which Jansenism was the ideological expression of the entire bourgeois class. The hypothesis proposed by G. Huppert at the end of his book would thus occupy an intermediary place (which is very plausible). This does not conflict with what P. Goubert, for example, wrote about the spread of Jansenist thought (1966, p. 185). 50 On the problem of values and social hierarchies, see in particular A. Jouanna (1977), G. Huppert (1977) and the reflections of D. Richet (1969 and 1973). 51 ‘Personal merit, which is worth nothing or almost nothing in society, ought to be all in it.’ 3 Equilibrium (I): The social classes approach: from the ‘state of innocence’ to the ‘polished and magnificent state’ 1 Notably: De la faiblesse de l’homme and Des moyens de conserver la paix avec les hommes. 2 The Anglo-Saxon authors emphasised this filiation. See, for example, Jacob Viner, 1953, and T. A. Horne, 1978, Chapter II (‘Mandeville and the French Moral Tradition’), to cite only two texts among a copious production. 3 In Le Droit public (since the Traité des lois adopted Nicole’s ideas). 4 Furthermore, technical agrarian literature was almost non-existent in France until the eighteenth century. Interest in ‘the fields’ reflects a collective attitude adopted long before by the sixteenth-century gentry: ‘Country life was the symbol of lost innocence, an imaginary past which was a stranger to all complications, the source to which one was supposed to return in order to counterbalance the pressure of politics and business’ (G. Huppert, 1977, p. 154; cf. also p. 149). ‘In terms of the land, the lacunae in the literature and the stagnation in techniques is surprising. If one excludes the art of gardening, hunting and jam making, the French did not write a single work on agriculture from 1601 to 1750: they contented themselves with re-printing or plagiarising La Maison Rustique by Estienne and Liébault, forgetting all too soon Le Théâtre d’Agriculture. During this time, English agronomic literature flourished, stimulated by the national experience of enclosure and the Flemish model. The less voluble Flemish and Dutch increased their experiments and successes, but awakened no echo in France’ (P. Goubert, 1966, pp. 55–6). 5 Charles Paul Hurault de l’Hôpital, seigneur de Belesbat, descendent of an illustrious family of the robe, about whom Saint-Simon wrote: ‘He was a kind of elephant in facial appearance, an ox of the mind, who was accustomed to considering himself a courtesan, following the King in all his voyages to war and the frontier, and being no more

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7

8 9

10

11

175

advanced than this. His fathers were of the robe; he was neither robe nor sword, was mocked quite often, and occasionally spat out rather amusing coarse comments’ (Mémoires, volume V, p. 149). Contrary to the attitude he adopts in relation to Vauban or Boisguilbert, Saint-Simon does not speak about Belesbat’s ideas for reform, although they were similar to his own. From 1692 to 1702 Belesbat presented various memoirs to the king, on widely different subjects concerning the politics and administration of the kingdom (cf. Schatz and Caillemer, 1906, pp. 31–3). Six memoirs, presented in 1692, seem particularly important: Réflexions sur les liaisons de la France avec la Hollande à cause du commerce, Traité de l’origine de la vénalité des charges de judicature et de finance, De l’origine des biens d’Eglise et de leur usage, Traité des droits et prétentions de la Cour de Rome, Preuves de l’union inséparable des intérêts du Roi et de ceux de ses sujets and Des intérêts de la France à l’égard des princes et États de l’Europe. To my knowledge, Belesbat’s memoirs are still unpublished. But this in no way means that they did not circulate; on the contrary. Works of this sort were often copied by the milieu interested in them and distributed in manuscript form. As Rothkrug notes (1965, p. 329), many copies or extracts of these memoirs are to be found in Paris, Rouen, Grenoble, Nantes etc. Furthermore, Belesbat participated in the ephemeral ‘Luxemburg Academy’ organised at the home of his cousin, the extravagant abbé François-Timoléon de Choisy, at the beginning of 1692 (Rothkrug, 1965, p. 330, note 72; Niderst, 1972, pp. 359ff.). Fontenelle (Boisguilbert’s cousin) even collaborated occasionally in this ancestor of political salons in France. It is possible that Boisguilbert became aware of Belesbat’s memoirs through Fontenelle. Cited by Schatz and Caillemer, 1906, pp. 393–4. To reconstruct the climate in which Boisguilbert’s work developed, reference should be made to the tradition of merchant demands and to their increasing ‘power’ after Colbert’s death. On this, cf. L Rothkrug (1965) who presents many interesting facts, despite some confusion on the level of theory. In Fénelon’s famous letter to Louis XIV, a draft with a terrible, repetitive style, the following expression is found: ‘France is no more than a great abandoned hospital without provisions’ (cf. 1920, p. 150). Cf. also Vauban, 1707, p. 7: ‘in recent times, nearly a tenth of the people are reduced to begging, and indeed beg for a living . . . of the other nine parts, five of them are in no state to give alms to them, because they themselves are very nearly reduced to this unfortunate condition; of the four remaining parts, three of them are very poor, caught up in debts and law suits; and in the tenth, where I place the people of the sword, the robe, clergy and lay, all the high and distinguished nobility, those with military and civil responsibilities, the good merchants, the most comfortably off bourgeois with rentes, one cannot count a hundred thousand families and I do not believe that I am wrong in saying that of them there are not ten thousand great or small who could be described as being extremely well off.’ Cf. Vauban, 1707, p. 6, who, after 40 years of ‘wandering life’, intends to research the cause of the country’s poverty. ‘Which having undertaken with great care, I found to correspond perfectly to what the author of the Détail de la France wrote about it, who developed and brought to light entirely naturally the abuses and mis-practices which take

176

12 13

14 15 16

17

18 19

Notes to Chapter 3 place in taxation and the levying of the tailles, the aides and the provincial customs duties. If only he had done as much in relation to extraordinary affairs, the capitation, and the vast number of exemptions which currently exist in the kingdom, and which have caused it hardly less harm than the three other plagues, which he described to us so well.’ Boisguilbert and Vauban knew each other. On their encounters, cf. J. Hecht, 1966a. Emile Coornaert seems to me to be unjust in regard to Boisguilbert when he declares in the preface of the re-publication of Projet d’une Dîme Royale, 1933, p. xi, that Vauban was ‘far more daring than his friend’. Coornaert apparently had only a rather superficial idea of Boisguilbert’s works. Cf. above, Chapter 1; cf. also N.O. Keohane, 1980, pp. 341–2. In the context of this type of approach, the work of Henri Gouhier, 1977, should be noted. J.-B. Say (no publication date, p. 346): ‘Did Fénelon have to establish magistrates in Salente to whom all merchants were due to give an account of their commercial affairs and undertakings, and who prohibited them from risking more than half of their goods? Is this not to advocate an attack on property and an outrage for the freedom of industry? And without property or industry, what would have happened to the prosperity of Salente? Even with his despotism and wars Louis XIV will never have done the evil which would result from the advice of the good Fénelon, apostle and martyr for the virtue and good of men. He believes himself to be the defender of the freedom of trade, yet he prohibits foreign commodities; he regulates clothing, food, furniture, the grandeur and ornamentation of houses, for all the different conditions.’ Cf. Boisguilbert, 1705c: ‘Finally, it can be said that to be perfectly happy not only in relation to bare necessities, such as bread, but even in regard to superfluities, France has only to laisser faire nature which has distributed it better than any land on earth’ (p. 795). Cf. also 1695, pp. 582–3: France’s strength derives ‘from the fact that, producing in fairly great abundance all sorts of items necessary to life, not only for feeding the large number of inhabitants it houses, but also for sharing with those lacking in them, at the same time it finds itself surrounded by neighbours who, without the same advantages, exhaust their lands finding something suited to delights and the superfluous, in order to exchange it for what is necessary; and still this does not suffice their needs so that they find themselves obliged to become its carriers, to travel to collect these same superfluities in the farthest away lands, so as to draw the same necessities from them.’ In other words the only fruit of the country; cf. 1704d, p. 965: ‘no other produce grows there’. The words poli, politesse (polite/polished, politeness) relate to urban, social, civilised life. Polir [to polish] ‘is used figuratively for everything which serves to cultivate, embellish and soften the mind and manners, making them more suited to the ordinary commerce of the world’. Poli ‘is also an adjective, signifying soft, civil, honest and obliging, which undertakes with fine grace everything related to exterior civil life’. Honnête (honest), as an adjective, ‘also signifies suiting reason, befitting the condition, profession and age of the person’. ‘Sometimes one also calls honnête homme, a man in whom one considers only the pleasant qualities and worldly manners: and in this sense, honnête homme means no more than a gallant man, a good conversationalist, a man who is good company’ (Dictionnaire de l’Académie française, 1694). See what Boisguilbert says about ‘politesse’ here below, Chapter 5.

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20 An apparent restriction may be found in Boisguilbert’s writings (1704b, p. 871) when he claims to be ‘the organ or the orator of the labourers and the inhabitants of the fields, or rather of the land itself and nature’. But this restriction concerns only the context from which the quotation is taken, which is the Traité des grains. 21 The arts and trades ‘do not have a function of equal necessity, without which the world absolutely cannot exist: some provide what is necessary, such as the first and coarsest subsistence, in other words bread and liqueurs; others, something extra, such as the slightest dish; others, meats, amongst which there are many different degrees, such as the delicate, the sensual, the superfluous, and finally the fantastic and the absolutely useless’ (1704b, p. 837); this applies to all sectors. 22 Cf., for example, 1707b, p. 991. 23 Cf., for example, Jean Molinier (1958, 1966), who gives two slightly different presentations of a global revenus circuit in Boisguilbert’s theory. For Molinier, in Boisguilbert ‘is found the first analysis of the circuit and an outline of Quesnay’s Tableau économique’ (1958, p. 3). 24 Boisguilbert’s state of peace existing after the Fall, and the connection between money and social classes, may be reminiscent of Locke, whose second treatise on civil government appeared in a French translation in 1691 (Locke, 1690). However, the analogy should not be pushed too far. Indeed, in Locke the money–class relation is the opposite of the one described by Boisguilbert. 4 Equilibrium (II): The market approach: the foundations of equilibrium and of free trade 1

See ibid., p. 585: ‘these same biens only in fonds, both real, as in land, or by accident, as in the charges, greffes [clerk’s fees], péages and moulins [miller’s fee]’.

2 Boisguilbert, 1705b, pp. 697–9 and 727–8. 3 ‘there are only three kinds of biens in France, like everywhere else: the revenus en fonds, in other words the land, rentes, charges and even billets courants form the first type; the second is trade, both wholesale and retail, whether the products are manufactured by the seller or simply bought; and finally the third which is the manual labour of simple day labourers who are paid for their work by the piece or by the day, with no interest in the commodity for their part’ (ibid., p. 697). 4

There is no doubt that Boisguilbert’s classifications have been forced to say too much, through a neglect of the particular contexts in which they were made. Cf., for example, Molinier (1958, 1966) and Nagels (1970) for attempts at this type of interpretation. Cf. also, J. Wolff, 1973, note 3, p. 196.

5

Cf. pp. 851–2: ‘the two great enemies, namely, the depreciation of grain prices and their excessive dearness, which are perpetually opposed, are in constant battle, and . . . they have neither peace nor patience so long as they bring each other down, to be born again later as a phoenix from its own ashes, appearing more violent than before.’

6

Hazel van Dyke Roberts (1935, note 25, p. 43) claims that the immeubles designate capital, while the meubles designate income. The idea is taken up again by Molinier (1958, note 3, p. 21) who claims elsewhere (1966, note 3, p. 93) that ‘the classification according to revenus des fonds and revenus d’industrie corresponds to a distinction

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Notes to Chapter 4 between capital income . . . and work income understood in the wide sense’. My position differs to the opinions of these two authors.

7

‘All biens can be divided into two types: immeubles, which includes land rent, rentes constituées à prix d’argent [annuities] and the other biens in this group, such as offices [fees] and several droits [rights]; and meubles and effets mobiliers, including gold, silver, precious stones, commodities of all sorts, active debts [créances, claims], industry profits and all other biens which are not immeuble.’ (Domat, 1697, p. 72).

8

The problem of money and the origin of its value was taken up again by analogy by the philosophers of the time in their consideration of language. Cf., for example, Marcelo Dascal, 1976, who deals with this analogy in the work of Bacon, Hobbes and Leibniz.

9

See, for example, Henri Poullain, 1621, Traité des Monnaies, a collection of memoirs drawn up some ten years previously, some of which had already been published separately.

10 Cf., for example, L. Monnier, 1974. 11 Gramont expands on the subject by giving the example of France during King Jean’s detention, when pieces of leather circulated; leather money was also used elsewhere (by Frederic II during the Italian wars, for example). Money was also made of lead and pewter. In Angola it is a ‘cloth woven of strands of a grass’, the ‘nuts of a fruit which those in the country call cacao’ in Mexico, coca leaves in Peru, etc. There then follow the examples of iron balls in Sparta, ‘pepper and mine salt’ in Ethiopia, and in ‘Bengala and the Gangetic Gulf’, ‘certain shells which are collected from particular islands’ (ibid., pp. 16– 21). 12 ‘if like money, all the goods necessary to life had a definite price, unaltered by time, or if the varying degrees of perfection which each particular one has did not conceal the true estimate, so that they had a current price every time one needed them . . . then exchange would take place immediately, as it did in the beginning of the world’ (Boisguilbert, 1695, p. 618). That is, all commodities would be money. 13 Ibid., p. 975; see also, for example, 1695, pp. 617–18. 14 See Boisguilbert, 1707a, p. 890; 1707b, p. 978; 1704d, p. 966. 15 See also the passages already quoted where it is a matter of dead and living money. 16 See, for example, Boisguilbert, 1707b, p. 1006. 17 Other uses of precious metals are: ‘magnificence, where gold and silversmiths are in first place’, ‘the fabrication and embellishing of temples and houses’ and, equally, the money sent to far away countries from which it does not return (foreign trade) (1704d, p. 967). Cf. 1707b, p. 987: because of bills of exchange, silver money becomes useless for exchange and ‘in order not to remain idle, it is forced to offer its service to the household and to magnificence, and to have recourse to silversmiths and for other works’. 18 Boisguilbert employs other examples as well, notably the rentes for the Hôtel de Ville. 19 See also ibid., p. 704. 20 The reference to ‘indirect interests’ will be made explicit later on. 21 See also, for example, 1705c, pp. 748 and 753; 1707a, p. 896. 22 Cf. 1707a, p. 896: ‘If the first ploughman, exchanging only with the shepherd, had not wanted to give him enough corn to feed himself, while demanding all the necessary

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clothing from him, taken from the hide of the beasts, not only would he have caused him to die of hunger, but he would himself have perished from cold later, by killing the only labourer for the pressing need of clothing.’ 23 Cf. also ibid., p. 896: ‘And this harmony, which is so indispensable for these two men, is the same obligation for the more than two hundred professions found today in France. The good or evil which occurs to any individual is not independent of all the others, just as the slightest indisposition in one member of the human body soon causes all the rest, and thus the subject too, to perish if it is not seen to forthwith.’ 24 Curiously it is in the name of competition that Domat justified the loss of ranks and titles of nobilty because of involvement in trade: the ‘prohibition’ to trade imposed on the nobles and officiers was supposedly due to the inequality of weight and importance which these people would introduce into the bargaining; cf. 1696, pp. 148–9. 25 ‘There is no worker who does not try with all his strength to sell his goods for three times more than they are worth, and to get his neighbour’s good at a third of what it cost to produce’ (ibid.) 26 The word ménager (manager) or ménagement (management) should be taken in its meaning of the time. It relates to administration, managing and management. Boisguilbert uses it frequently: he speaks of a ‘good manager of his land’, of ‘corn well-managed’, etc. 5 Destabilising shocks (I): Court language and merchant truth 1

‘when trade is good, the worst situation for a merchant is to have his money uselessly in his coffers, since it produces nothing for him there.’

2

In economic literature, the vocabulary of ‘proportions’ applies firstly to currencies, in the context of bimetallism: it was a matter of conserving certain proportions of convertibility between gold and silver currency. The expression is also used in relation to taxation. From the proportions between the different types of currency, Bouteroue shifted to proportions between the currency and commodities. Finally, Boisguilbert seems to generalise the expression of proportions among all the commodities, i.e. to the system of relative prices. However, the term ‘proportion’ also retains a very wide meaning in his work, designating the ‘harmony’ which must reign everywhere. This is very clear in the Détail de la France, where Boisguilbert speaks of a ‘lack of proportion in an edict’.

3

‘Providence desired . . . [that] the rich and poor be reciprocally necessary to each other

4

Cf. Richelieu, 1632–8, pp. 254–5: ‘But there is a certain point which cannot be exceeded

to survive.’ without injustice, common sense telling us all that there must be a proportion between the burden and the strength of those who carry it.’ 5

Domat (1697, p. 82) refers to two types of taxation distinguished by their return (certain/ uncertain): direct contributions were effectively allocation rather than fixed-rate taxes. ‘The result is . . . that while for personal contributions and those of funds, the prince may fix his due at the amount he wishes to tax, he cannot regulate what he draws from

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Notes to Chapter 5 contributions on produce and commodities in the same way, since each year changes

6 7

8

9

10 11 12 13

occur making it impossible to fix these rights at a certain and precise amount.’ Through this Domat justified the leasing out of ‘indirect’ contributions: ‘it is for this reason that these sorts of contributions are farmed out through auctioned leases, or by traitants for a particular price’ (ibid.). Admittedly he adds: ‘he could also give the personal and real taille contributions to traitants for a set fee, if circumstances of time and the conditions of the treaties made them more advantageous than they would be in the recovery from the hands of the officiers responsible for them’ (ibid.). Along with other fiscal reformers, Boisguilbert demanded the exact opposite through the abolition of indirect circuits of tax collection. However, Boisguilbert never analyses the effects of the tax on salt, although this contribution was widely discussed: this silence is surprising and has been remarked upon. Cf. 1705c, p. 750 in particular. Boisguilbert gives many examples: a commodity may carry as many as eleven different duties, while a vessel’s burden may be ‘twenty six duties or declarations’ (1707a, pp. 924–5). Just like the stone in the fable which causes the fall which breaks the jug of milk, a poor taxation system ruins the countryside, for: ‘It is the same in the countryside: a 3 denier egg gives a chicken; this chicken, a fat hen sold at 30 to 40 sols; these 30 to 40 sols buy two suckling pigs; once these two piglets are fattened up, which is easily done at little expense, they are worth 60 livres; these 60 livres buy a horse, with which half a plough is set up, or one establishes a small haberdashery trade, which can produce very great riches. Although these details may appear somewhat ridiculous taken literally, it is nevertheless absolutely true, and every day one sees rich labourers and merchants who began by carrying their shop and tools on their shoulders for many years.’ (1705a, pp. 367–8). Cf. ibid., pp. 979–80: ‘Thus this running off with all kinds of produce during these occasions, severely upsets the equilibrium which ought to exist between gold, silver and all other things. The difficulties experienced to attain the one, and the profusion of the other, inflates one up to the clouds, and lowers the other to the abyss. Here then the slave of trade becomes its tyrant . . . and it is certain that almost all infamies would be banished in a state if the same could be done with this fatal metal; the slight service it renders trade . . . is not worth a hundred part of the evil it causes.’ This passage in particular may have caused Boisguilbert to be taken as an advocate of a return to the ‘state of innocence’ and hence to bartering. ‘If all properties resulted in the produce necessary to life, then brigands would lose these two means of thieving, for they would only be able to take away a small quantity of the goods at a time, and even to carry them it would be necessary for them to have a large number of horses and carriages which would be impossible to hide, because they would be easily recognised, and consequently easily discovered’ (Boisguilbert, 1707b, p. 980). See, for example, Boisguilbert, 1704b, 1706. See also the characteristic passage which takes up the theme of the tower of Babel (1704b, p. 828). Ibid., see also 1703a, p. 297. ‘Politesse alone produced the disorder which, by entirely ruining the line of communication which ought to exist throughout the members of a state, breached all liaisons, so that a

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15

16

17

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corpulent and perfectly well composed body became paralytic in its parts, since the blood could not flow freely in the vessels to carry to each part what was necessary to its maintenance, and so that some having too much and others too little, some perished by an excess of plenitude and others through weakness.’ (1705c, p. 764). The Factum de la France (1707a) gives a history of the increase in ‘individual interests’ introduced during the three regencies, i.e. the ‘patches’ to the French monarchy. Cf. in particular pp. 908–11. ‘A blindfold is put over their eyes to suggest that the guarantee or personal ministry of people who have absolutely nothing of themselves is absolutely necessary for making those who own everything pay, and that this cruel service can never be bought at a high enough price’ (1707b, p. 1002). ‘In terms of taxation, an écu is no longer called an écu, and a pistole a pistole, as has always been the case since then; instead all dues took on a war name: they are named dreams, high passes, failings, the trépas [death] of Loire, the denier Saint-André, the ceinture de la Reine [the Queen’s belt], parisis sol denier, big, little, old and new droit [due or fee for a right], pied-fourchée [forked foot], and many others which are too long to list in detail, which have all survived until now, forming the great skill of finance, which no one has yet mastered entirely, because it is impossible. All these obscurities or mysteries are up for debate amongst the boatmen, drivers and carriers who have no knowledge of writing, and the agents who have no public table in their office for the demand of dues (as there used to be) . . . One should not be surprised that a hundred thousand men are employed to raise these taxes, and ten thousand judges are required to determine the inseparable disagreements, causing the ruin of half the goods of the kingdom, which have been destroyed by the constant increase of such causes’ (1707c, pp. 821–2). See Pierre Goubert, 1977, pp. 22–3 (cf. also Daniel Dessert, 1985): ‘At least 80% of Louis XIV financiers were nobles of recent nobility, usually descendants of families of officiers of the royal finances . . . With few exceptions, they were Parisians, or men from the Bassin Parisien, or Champenois like Colbert, or else from Rouen, Tour, Blois and Orléans. They were almost all related to each other, particularly through their wives, which is less apparent. What is even more surprising is that, hidden well behind them, were other men and women who discretely advanced them the gold and silver necessary to the implementation of their undertakings. Naturally these discrete lenders were those with the greatest fortunes in the kingdom: prelates, grand seigneurs, ladies of the Court, marshals of France, presidents in the parliament, ministers and secretaries of state. The most powerful in the kingdom, such as the chancellor Séguier, the duchesse de Longueville and the illustrious Turenne were all financiers, fermiers, trafiquants; right up to the Great King himself who, at least once, participated in the farming of his own gabelles . . . The greatest of all was of course Mazarin, so well positioned to sign permission for himself to raise the taxes he determined . . . Colbert, his worthy disciple who had previously been an intendant, was involved in most schemes, through intervening cousins or strawmen. In short, those with money and those in the government were roughly one and the same . . . But there was also the following mentality trait: it was necessary to hide these financial activities carefully, and to spread the opinion . . . that they were the acts of people from nowhere, lowly commoners, previous lackeys, strangers or Huguenots.’ As we have seen, Boisguilbert himself was fooled by this.

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6 Destabilising shocks (II): Market strategies: the propagation of disequilibrium 1

2 3

Cf. 1706, p. 801: ‘a first payment, whether made or not made, promised, expected or delayed, produces the same effect in relation to the two hundred thousand people waiting one after the other, mouths open wide, dependent on this first element for their food, so that all events affecting it concern them individually, without giving them any quarter or credit.’ Cf., in particular, ibid., pp. 674 and 675, where the role of forecasts is emphasised. See also pp. 732–3.

Appendix 1

2

3 4 5

6

In a letter to N. C. Thieriot dated 10 August 1763, Voltaire attributes Vauban’s work to Georges Guillet de Saint-Georges, who was known as La Guilletière (Voltaire, 1973–5, vol. CX, 1973, D 11351). On the 10 December 1764, a correspondent informed him that ‘Boisguilbert wrote the testament of Vauban’ (ibid., vol. CXII, D 12235): this was indeed Boisguilbert’s work published in 1707 under this title. From then on, Voltaire also attributed Dîme Royale to Boisguilbert. Mirabeau makes an ingenuous remark: ‘This opinion, which takes the year 1660 as the time when the ruin of France began seems very paradoxical. For our part, just when we were discovering this excellent work [Factum de la France] we believed ourselves to be the restorers of truth and inventors of the art of reasoning in the economic policy of states according to simple principles; we did indeed touch on this matter, but we thought it best to do so extremely lightly, without assigning any date, for fear of shocking too overtly the inbred prejudices which are confirmed in prose and verse by the eloquent verbiage of the immense order of parasites. Indeed, we are weary of hearing about the history of the previous reign, which is presented as the glorious century for France, and it was precisely in the year 1660 that this age of splendour is supposed to have started, which, according to historians, reached its peak at the treaty of Nimègue in 1679, later to decline and fall entirely at the beginning of our century on account of causes which included the cloistered old age of the Prince, the incompetence of the ministers, the poor choice of generals and finally the calamities which befell the royal household and the entire populace’ (1758–59, pp. 118–19). Mirabeau’s notes were published by Georges Weulersse in 1910. Weulersse dates them to the end of 1758 or the beginning of 1759 (in Mirabeau 1758–9, pp. 113–14). He notes, however, that Boisguilbert does not mention the gabelle. This included the Détail de la France, the Factum, the Traité des grains and the Dissertation (Économistes financiers du XVIIIe siècle, published by E. Daire, Collection des Principaux Économistes, Paris, Guillaumin, 1843, pp. 157– 424). Boislisle’s unfinished memoir which was presented to the competition at the Académie des sciences morales et politiques is still unpublished. But see Boisguilbert et les contrôleurs généraux, appendix (2nd part, XII) in volume XIV (Paris, Hachette, 1899, pp. 573–99) of his edition of Saint-Simon’s Mémoires. See also the notes to the Correspondance des

Notes to Appendix

7

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9 10 11 12 13 14 15

16 17 18

19

20

183

contrôleurs généraux. Boislisle describes Boisguilbert as a ‘precursor of the Économistes lost in the midst of the century of Louis XIV’ (1899, p. 573). See also Cadet (1870) for whom Boisguilbert’s negligent style is to be explained by those to whom the writings were destined! ‘He is addressing the people, and he knows how to speak to them in a truly popular language, in other words, one which is both figurative and sensitive’ (ibid., p. 114). See ibid., p. 31: ‘If not consciously, at least in matter of fact, Boisguilbert himself resolves the exchange value of the commodity in labour time when he determines the “just value” by the exact proportion, in which the labour time of individuals is spread amongst the specific branches of industry, and he represents competition as the social process which establishes this proportion.’ See Hazel van Dyke Roberts, 1935, annex, p. 345. See note 5 in the introduction to this essay. See, for example, ibid., pp. 204–5. Boisguilbert’s attacks on Colbert are a ‘denial of justice’ (p. 208). In particular De l’état et succès des affaires de France (revised edition, 1580) by Bernard de Girard du Haillan; Le secret des finances de la France, 1581, by N. Froumenteau. See ibid., p. 297: ‘fortunately, Boisguilbert has a highly developed critical sense: the errors of others led him to correct or to abandon his own mistakes’. ‘The remark appears to us to be perfectly well founded, whatever Boisguilbert’s intelligent publisher and annotator says [Daire, 1843, p. 401]. Today we are able to discuss the comparative advantages of large or small capital. Nowadays one can doubt, hesitate and ask oneself whether, from the point of view of the community, a million francs handled by a single industrialist or one company is more or less productive of utility than a million francs handled by a hundred small industrialists. Although concentrated capital is very active and restless, sometimes too restless, in our days, personally, I would hesitate to pronounce myself in its favour against fragmentary capital . . . . The thesis . . . was hardly up for discussion in Boisguilbert’s time. At that time, concentrated capital was fatally inert; fragmented capital, in all times and situations, is necessarily active and rolling’ (Horn, 1867, pp. 314–15). An author such as Henri Hauser, for example, does not mention Boisguilbert. Henri Curmond (1900), Maurice Frotier de la Messelière (1903), Albert Talbot (1903) and René Durand (1922). For example, Alexander Gray’s critique of Roberts’ book (Gray, 1934–7) attracted Schumpeter’s attention to the 1935 work and led him to change his mind about Boisguilbert. See Schumpeter, 1954, p. 216. On this point the authors accept Boisguilbert’s own words and even go so far as to write that ‘he must have created a situation himself and even if his post allowed him some comfort, nevertheless, previously he had been obliged to involve himself in agriculture and trade in order to live’ (M. Frotier de la Messelière, 1903, p. 44). This is in the tradition of J. Michelet, for whom the ‘little judge’ Boisguilbert lost his ‘livelihood’ because of his ideas. See ibid., p. 55: ‘We ought not therefore to ascribe too much importance to the argument Boisguilbert draws from the existence of natural laws; it is not always good “to let nature act”. In his work these are only arguments of the moment which should not be taken for absolute principles.’

184 21

Notes to Appendix Rothkrug (1965) discredits this book. But he discredits almost everybody, most of the time unjustly. Although he is a good historian, Rothkrug’s work nevertheless leaves something to be desired in terms of economic arguments.

22

In particular, Roberts draws a parallel between the structure and ideas of the 1707 Dissertation and those of the Wealth of Nations.

23 The author cites Witotd von Skarzinski, Pierre de Boisguilbert und seine Beziehung zur neueren Volkswirtschaftslehre (Berlin, 1873) which interprets these passages as the premises of liberalism and socialism, of both Bastiat and Proudhon: ‘Here at the threshold of the science itself we find the germ of all the theories, the elements of all the philosophies of life conceived or developed later . . . If we sum up briefly the theories of Boisguilbert concerning the solidarity and harmony of interests among the different classes, and if we strike a balance between the things which are practical and rational, and those which are idealistic and utopian, we find that in his confusion and in his gropings, Boisguilbert has instinctively touched about all the sides of the controversial problems which are yet unsolved; that he has grasped correctly the great law of the intimate relation, of the mutual reaction of the most diversified interests of society. But whether the interdependence of different classes would itself finally lead to harmony, or whether harmony would first have to be created, he has left unsolved’ (Skarzinski, 1873, cited by Roberts, 1935, p. 165). 24 Roberts emphasises that Boisguilbert is not a socialist in the modern sense of the term. He only proposes reforms. But one cannot ignore the weight he grants to the opposition between the productive class and the idle class: ‘Fundamentally, Boisguilbert fought a system – a system based upon the exploitation of one class or group by another. In doing so he established a theory based upon non exploitation and economic justice. It was upon such a foundation that later radical thought was to build’ (pp. 166–7). 25 The question of Boisguilbert’s vocabulary is complicated by the question of which edition is used. Thus, M. Leduc (1960) falls victim to the Guillaumin edition when he emphasises the modernity of his vocabulary, in particular the expression ‘national revenue’, which was in fact introduced by Eugène Daire for the publication in the Principaux Économistes collection. 26

The reasons proposed by J. Spengler may be added to this, namely the low price elasticity in the demand for corn, etc. (1966, p. 13).

27

Several authors have attempted to adopt an intermediary position on this topic; however, their remarks are ambiguous (see, for example, Spengler, 1966, p. 12).

28

Lucien Goldmann (1955). For a criticism of Goldmann’s thesis, one may refer particularly to R. Mandrou (1957), R. Taveneaux (1965) or J. Delumeau (1971).

29

A reconsideration of the monetary theme can also be noted (M. Herland, 1981, pp. 106– 112 situates Boisguilbert as a point of departure for a lineage which ends with Keynes and includes Proudhon and Gesell), as well as the theme of the state (Rosanvallon, 1982). Finally, Jacques Wolff (1973, Chapter VII) and T. W. Hutchison (1988) provide new syntheses.

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Index

Adam, 9, 24, 38, 52, 65 Alceste, one of Molière’s characters in Le Misanthrope, 1, 6 Amelot de la Houssaye, 13 Andilly: see Arnauld d’Andilly André, Louis, 173 Anne of Austria, Queen of France, 173 Aristotle, 17 Arnauld, Antoine, said ‘le Grand Arnauld’, 4, 22, 23, 167, 171, 172 Arnauld d’Andilly, Robert, 165 Augustine: see Saint Augustine Augustus, Roman emperor, 49, 68 Bacon, Francis, 178 Barcos, Martin de, 23 Bastiat, Frédéric, 151, 184 Baudelot, Bernard, 48, 171 Beaussant, Philippe, 166 Belesbat, Charles Paul Hurault de l’Hôpital de, 59, 174, 175 Berger, Guy, 169, 171 Bernard-Béchariés, Jean-François, 160, 161 Bérulle, cardinal Pierre de, 22 Beuvron, marquis de, 2 Bignon, Jérôme, 165 Bignon, Thierry, 165 Bodin, Jean, 11, 30, 31, 35, 38, 39, 41, 42–43, 45, 48, 49, 80, 82, 110, 166, 169, 172 Boileau, Nicolas Despréaux said, 22, 48, 173 Boislisle, A. de, 148, 154, 182, 183 Bossuet, Jacques-Bénigne, 22, 23, 170 Bouhours, abbé, 4 Bouteroue, Claude, 179 Brossette, Claude, 48, 173

Cadet, Félix, 4, 5, 148, 150–151, 154, 155, 164, 165, 183 Caillemer, Robert, 59, 60, 175 Cantillon, Richard, 143 Cartelier, Jean, 164 Catherine de Médicis, Queen of France, 173 Chamillart, Michel de, 2, 6, 7, 165, 171, 173 Chanteur, Janine, 172 Chedozeau, Bernard, 55 Child, Josiah, 13 Choisy, François-Timoléon de, 175 Christ: see Jesus Christ Cognet, Louis, 166 Colbert, Jean-Baptiste, 6, 49, 53, 59, 91, 144, 164, 165, 169, 173, 175, 181, 183 Cole, Charles Woolsey, 154, 155 Columbus, 3, 148 Condillac, Étienne Bonnot de, 142 Coornaert, Émile, 176 Copernicus, Nicolaj Kopernik said, 3, 154 Coquille, Guy, 172 Corneille, Pierre, 148 Courtilz de Sandras, 173 Croix, Émeric de la, said Émeric Crucé, 49, 169 Cureau de la Chambre, 29 Curmond, Henri, 183 Daire, Eugène, 148, 182, 183, 184 Dascal, Marcelo, 178 Davanzati, Bernardo, 154 Delumeau, Jean, 166, 184 Derathé, Robert, 172 Descartes, René, 15, 17, 21, 22, 29, 166, 167 Desmarets de Saint-Sorlin, Jean, 16 Desmaretz, Nicolas, 6, 93, 102, 165

196

Index

Dessert, Daniel, 181 Domat, Jean, 11, 22, 23–27, 29, 30, 31, 32–33, 34–35, 37–39, 43, 48, 49, 52, 55, 57, 58, 61, 64, 72, 78, 99, 100, 138, 166, 167, 168, 169, 170, 171, 178, 179, 180 Droz, Jacques, 150 Dubos or Du Bos, abbé Jean-Baptiste, 166 Duguet, abbé Jacques-Joseph, 23, 55, 58, 168 Dühring, Eugen, 150 Dumont, Louis, 169 Dupont, Pierre Samuel, said Dupont de Nemours, 144, 146, 147 Dupuigrenet-Desroussilles, Guy, 164 Durand, René, 156, 157, 183 Estienne, Charles, 174 Faccarello, Gilbert, 164 Faucher, Léon, 148 Fénelon, François de Pons de Salignac de la Motte, 22, 38, 58, 59, 60, 61, 62, 63, 168, 175, 176 Fernandès, Santiago, 164 Fernandez-Diaz, Osvaldo, 164 Féry, Jean, 160 Fleury, Claude, 58 Fontenelle, Bernard Le Bovier de, 16, 175 Forbonnais, François Véron de, 144, 145–146 Forge, Louis de la, 29 Fournel, V., 4 François Ier, King of France, 40, 49, 72 Frederic II, German Emperor, 178 Frotier de la Messelière, Maurice, 155, 183 Froumenteau, Nicolas, 183 Galiani, Ferdinando, 139, 163 Gerson, Jean Charlier said Jean de, 13 Gesell, Silvio, 184 Girard du Haillan, Bernard de, 183 Goldmann, Lucien, 163, 164, 174, 184 Goubert, Pierre, 174, 181 Gouhier, Henri, 176 Gramont, Scipion de, 54, 81, 82, 174 Gray, Alexander, 183 Grotius, Hugo de Groot said, 48 Guillet de Saint-Georges, Georges, said La Guilletière, 182 Harsin, Paul, 154 Hauser, Henri, 173, 183

Hay du Châtelet, 60 Hecht, Jacqueline, 2, 36, 155, 164, 166, 176 Henri IV, King of France, 49, 72 Herbert, Claude-Jacques, 144 Herland, Michel, 184 Herodien, 165 Hirschman, Albert O., 169 Hobbes, Thomas, 16, 30, 48, 168, 178 Hodgskin, Thomas, 149 Horn, Ignace Einhorn, 148, 150, 151–154, 155, 156, 157, 183 Horne, Thomas A., 174 Huppert, George, 55, 174 Hutchison, Terence W., 184 Ivanciu, Nocolae-Vàleanu, 164 James, E.D., 166, 168, 169 Janssen: see Jansenius Jansenius, Cornelius Janssen or Janszoon said, 14, 22 Jean, King of France, 178 Jesus Christ, 24, 34, 151 Jouanna, Arlette, 174 Keohane, Nannerl O., 29, 164, 169, 176 Keynes, John Maynard, 161, 163, 184 Kubota, Akiteru, 161 Kuczynski, Marguerite, 164 La Bruyère, Jean de, 22, 56 La Guilletière: see Guillet de Saint-Georges La Rochefoucault, François duc de, 22, 169 Law, John, 154 Le Branchu, Jean-Yves, 154 Le Bret, Cardin, 40, 41, 81 Le Gendre, Thomas, 91 Le Nain de Tillemont, Louis Sébastien, 165 Leduc, Michel, 161, 163, 184 Leibniz, Gottfried Wilhelm, 178 Liébault, Jean, 174 Locke, John, 13, 48, 177 Longueville, Anne Geneviève de BourbonCondé, duchesse de, 15, 181 Louis XIII, King of France, 72, 163 Louis XIV, King of France, 52, 54, 56, 57, 60, 144, 147, 148, 149, 157, 164, 172, 173, 175, 176, 181, 183 Louvois, François Michel Le Tellier, marquis de, 173 Loyseau, 40, 41 Lutfalla, Michel, 160, 162, 163 Luynes, duc de, 55

Index Machiavelli, Niccolò, 29 Maistre, Joseph de, 4 Malebranche, Nicolas, 29 Malestroit, Jehann Cherruyt de, 80, 82 Malthus, Thomas Robert, 155, 158 Mandeville, Bernard de, 58, 174 Mandrou, Robert, 167, 174, 184 Marie de Médicis, Queen of France, 173 Marrou, Henri-Irénée, 168 Marshall, Alfred, 158 Marx, Karl, 100, 148, 149, 163, 164 Maspétiol, Roland, 171 Matteuci, Nicola, 171 Mazarin, cardinal Jules, 49, 144, 164, 168, 181 McDonald, Stephen, 161—163 Mentor, one of Fénelon’s characters in Les aventures de Télémaque, 62, 63 Mesnard, Jean, 166 Mesnard, Pierre, 170 Méthivier, Hubert, 172, 174 Michelet, Jules, 148, 183 Mirabeau, Victor Riqueti, marquis de, 36, 144, 145, 146—147, 148, 150, 182 Molinier, Jean, 160, 161, 163, 177 Monnier, Louis, 178 Montchrétien, Antoine de, 169 Montesquieu, Charles-Louis Secondat de la Brède de, 31 Montherlant, Henry de, 4 More, Thomas, 49, 152 Mousnier, Roland, 61 Nagels, Jacques, 160, 163, 164, 177 Nicole, Pierre, 3, 4, 11, 14, 16, 21–33, 34–35, 36, 37, 39, 43, 46–47, 52, 53, 55, 58, 61, 64, 72, 98, 99, 100, 102, 110, 138, 151, 164, 166, 167, 168, 169, 170, 174 Niderst, Alain, 175 Nourrisson, Paul, 171, 173 Oncken, August, 150 Oresme, Nicolas, 80 Pascal, Blaise, 3, 22, 23, 33, 35, 36, 39, 48, 49, 52, 55, 61, 72, 166, 167, 168, 170, 171 Paumier, François, 172 Perrot, Jean-Claude, 164 Petty, William, 13 Phaëton, 17 Plato, 17, 49, 62, 151

197

Pontchartrain, Louis Phélypeaux de, 1, 165 Poullain, Henri, 178 Proudhon, Pierre-Joseph, 184 Pythagorus, 17 Quesnay, François, 142, 145,146, 151, 163, 177 Quesnel, Pasquier, 23, 172 Racine, Jean, 16, 165, 167 Ragot de Beaumont, abbé, 60 Ravenstone, Piercy, 149 Raymond, Marcel, 169 Richelieu, Armand Jean du Plessis, cardinal duc de, 11, 23, 44, 45, 49, 51, 52, 56, 57, 60, 106, 121, 164, 169, 172, 173, 174, 179 Richet, Denis, 61, 173, 174 Riese, Walter, 169 Roberts, Hazel Van Dyke, 155, 157–159, 162, 164, 177, 183, 184 Rodis-Lewis, Geneviève, 167 Rosanvallon, Pierre, 184 Rothkrug, Lionel, 58, 59, 60, 155, 164, 169, 175, 184 Saint Augustine, 21, 22, 23, 33, 167, 168 Saint-Cyran, Jean Duvergier de Hauranne, abbé de, 4, 22, 23 Saint Michael, 3 Saint-Simon, Louis de Rouvroy, duc de, 1, 148, 165, 174, 175, 183 Sainte-Beuve, Jacques de, 13 Sainte-Beuve, Charles-Augustin, 165 Salleron, Louis, 160 Say,Jean-Baptiste, 61, 150, 151, 160, 161, 163, 176 Schatz, Albert, 59, 60, 175 Schelle, Gustave, 154 Schumpeter, Joseph Alois, 160, 183 Séguier, Pierre, chancellor, 181 Selden, John, 30, 168 Senault, Jean-François, 29 Sévigné, Marie de Rabutin-Chantal, marquise de, 3, 4, 151 Singlin, Antoine, 15, 24 Sismondi, Jean Charles Léonard Simonde de, 149 Skarzinski, Witold von, 184 Smith, Adam, 10, 28, 87, 142, 150, 151, 157, 158, 168 Spengler, Joseph J., 155, 160, 161, 184 Spiegel, Henry William, 160

198

Index

Sully, Maximilien de Béthune, duc de, 6, 7, 49, 121 Talbot, Albert, 155, 156, 157, 165, 183 Tans, J.A.G., 170 Taveneaux, René, 24, 164, 166, 167, 171, 172, 184 Temple, William, 13 Thieriot, N. C., 182 Tuck, Richard, 168 Turenne, Henri de la Tour d’Auvergne, vicomte de, 181 Turgot, Anne-Robert-Jacques, 142, 154 Vauban, Sébastien Le Prêtre de, 1, 2, 60, 144, 153, 173, 175, 176, 182

Vaubourg, Desmaretz’s brother and Colbert’s nephew, 2, 165 Vignes, Jean-Baptiste Maurice, 60, 107, 171, 172 Viner, Jacob, 168, 171, 174 Virgil, 167 Voeltzel, René-Frédéric, 171 Voltaire, François-Marie Arouet said, 144, 148, 169, 182 Walras, Léon, 160, 161, 163 Weulersse, Georges, 154, 182 Wolfe, Martin, 172 Wolff, Jacques, 166, 177, 184 Zoïle,

148

* The name ‘Boisguilbert’ has been omitted.