Jean Baptiste Say.

A treatise on political economy; or, The production, distribution and consumption of wealth online

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writings always afterwards displayed; genius united with eru-
dition, carefulness in always ascending to the nature of things;
and an animated and elegant style.

One of the most striking peculiarities of this work, is its con-
taining some of the rudiments of the doctrine of Adam Smith,
and, among others, that labour is the sole creator of the value
of things or of wealth;ta principle although not rigorously true,

* Breve Trattato delle cause die possono far ahondare Uregni d'oro et d'ar-
gento dove non sono miniere.

-j- " Entro ora a dire della fatica, la quale, non solo in tutte le opere que
sono intieramente dell' arte come lepitture, sculture, intagli, etc., ma anchi
in molti corpi, come sono i mineral!, i sasci, le piante spontanee delle selve,
etc. e I'unica che da valore alia cosa. La quantita della materia non per


as will be made manifest in the course of this work, but which,
pushed to its ultimate consequences, would have put Galiani in
the way of discovering and completely unfolding the phenome-
na of production. Dr. Smith, who was about the same time a
professor in the university of Glasgow, and then taught this
doctrine, which has since acquired so much celebrity, in all
probability had no knowledge of a work in the Italian lan-
guage published at Naples by a young man then hardly known,
and whom he has never quoted. But even had he known it, a
truth can not with so much propriety be said to belong to its
fortunate discoverer, as to the inquirer who first demonstrates
that it must be so, and perceives its consequences. Although
the existence of universal gravitation had been previously con-
jectured by Kepler and Pascal, the discovery does not the less
oelong to Newton.*

In Spain, Mvarez Osorio and Martinez-de-mata have de-
livered discourses on Political Economy, the publication of
which we owe to the enlightened patriotism of Campomanes.
Moncada, Navarrette, Ustaritz, Ward, and Ulloa have
written on the same subject. These esteemed authors, like
those of Italy, entertained many sound views, verified various
important facts, and supplied a number of laborious calcula-
tions; but from their inability to establish them upon the fun-
damental principles of the science, which Avere not then
known, they have often been mistaken both as to the end as
well as the means of prosecuting this stud}-; and amidst a va-
riety of useless disquisitions have only cast an uncertain and
deceptive light.t

altro coopera in questi corpi al valore se non parche aumeiita o seetna la
fatica." (Galiani, della Moneta. Lib. I, cap. 2.)

"In relation to labour I will remark, that not only in tlie productions
which are entii-ely the work of art, as in painting, sculpture, engraving-, Sec.
but likewise in the productions of nature, as on metals, minerals and plants,
their value is entirely derived from tlie labour bestowed on tiieir creation.
The quantity of matter aft'ects the value of things only so far as it requires
more or less labour."

In the same chapter Galiani also remarks, that irian, that is to say his la-
bour, is the only correct measure of value. This, also, according- to Dr.
Smith, is a principle; although considered by me as an error.

* This same Galiani, in the same work remarks, that whatever is gained
by some must necessarily be lost by others; in this way proving, that a very
ingenious writer may not even know how to deduce the most simple conclu-
sions, and may pass by the truth without perceiving it. For, if wealth can
be created by labour, there may then be a new description of wealth in the
world, not taken from any body. Indeed this author, in his Dialogues on
the Corn Trade, published in France a longtime afterwards, has himself, in a
very peculiar manner, pronounced his own condemnation. " A truth," he
observes, "which is brought to light by pure accident, like a musiiroom in
a meadow, is of no value; we can not make use of it, if we are ignorant of its
origin and consequences; or how and by what chain of reasoning it is de-

f From my own inability of judging of tlie merits of such of tliese writers
whose works have not been translatecl, I have availed myself of the opinions
of one of the translators of this Treatise into the Spanish language, Don Jose


In France the science of Political Economy, at first, was only-
considered in its application to public finances. Sully remarks
correctly enough, that agriculture and commerce are the two
teats of the state; but from a vague and indistinct conception of
the truth. The same observation may be applied to Vauban,
a man of a sound practical mind, who, although in the army,
was a philosopher and the friend of peace, and who be-
ing deeply afflicted with the misery into which his country had
been plunged by the vain glory of Louis the Fourteenth, pro-
posed a more equitable assessment of the taxes, as a means of
alleviating the public burdens.

Under the influence of the Regent, opinions became unset-
tled; bank notes, supposed to be an inexhaustible source of
wealth, were but the means of swallowing up capital, of ex-
pending what had never been earned, and of making a bank-
ruptcy of all debts. Moderation and economy were turned in-
to ridicule. The courtiers of the prince, either by persuasion
or corruption, encouraged him in every species of extrava-
gance. At this period, the maxim that a state is enriched by
luxury was reduced to system. All the talents and learning of
the day were exerted in gravely maintaining such a paradox in
prose, or in embellishing it with the more attractive charms of
poetry. The dissipation of the national treasures was really
supposed to merit the public gratitude. This ignorance of first
principles, with the debauchery and licentiousness of the duke
of Orleans, conspired to effect the ruin of the kingdom. During
the long peace maintained by cardinal Fleury, France recover-
ed a little; the insignificant administration of this weak minis-
ter at least proving, that the ruler of a nation may achieve
much good by abstaining from the commission of evil.

The steadily increasing progress of diflferent branches of in-
dustry, the advancement of the sciences, whose influence up-
on wealth we shall have occasion hereafter to notice, and the
direction of public opinion, at length estimating national pros-
perity as being of some importance, caused the science of Po-
litical Economy to enter into the contemplation of a great num-
ber of writers. Its true principles were not then known; but
since, according to the observation of Fontenelle, our condi-
tion is such, that we are not permitted at once to arrive at the
truth, but must previously pass through various species of er-
rors and various grades of follies, ought these false steps to be
considered as altogether useless, which have taught us to ad-
vance with more steadiness and certainty?

Montesquieu, who was desirous of considering laws in all
their relations, inquired into their influence on national wealth.
The nature and origin of wealth he should first have ascertain-
ed; of which, however, he did not form any opinion. We are,
nevertheless, indebted to this distinguished author for the first

(^ueypo, an individual alike distinguished by his abilities and patriotism,
whose remarks I have only copied.


philosophical e^camination of the principles of legislation; and,
in this point of view, he, perhaps, may be considered as the
master of the English writers, who now are so generally es-
teemed as being ours; just in the same manner as v oltaire has
been the master of their best historians, who now furnish us
with models worthy of imitation.

About the middle of the eighteenth century, certain princi-
ples in relation to the origin of wealth, advanced by Doctor
Quesnay, made a great number of proselytes. The enthusi-
astic admiration these persons manifested for their founder,
the scrupulous exactness with which they have uniformly
since followed the same dogmas, and the energy and zeal they
displayed in maintaining them, have caused them to be consi-
dered as a sect, which lias received the name of Economists.
Instead of first observing the nature of things, or the manner
in which they take place, of classifying these observations and
deducing from them general propositions, they commenced
by laying down some abstract general positions, which they
styled axioms, from supposing them to contain intuitive evi-
dence of their own truth. They then endeavoured to accommo-
date the particular facts to them, and to infer from them their
laws; thus involving themselves in the defence of maxims evi-
dently at variance with common sense and universal experi-
ence,* as will appear hereafter in various parts of this work.
Their opponents had not themselves formed any more correct
views of the subjects in controversy. With considerable learning
and talents on both sides, they were cither wrong or right by
chance. Points were contested that should have been con-
ceded, and opinions, unquestionably false, acquiesced in; in
short, they combated in the clouds. P'olt aire, who so well knew
how to detect the ridiculous, wherever it was to be found, in
his Homme aux quarante tcus, satirized the system of the
Economists; yet, in exposing the tiresome trash of Mercier de
la Hivihre and the absurdities contained in Mirabeaii's L'ainl
des Hommes, was himself unable to point out the errors of

The economists, by promulgating some important truths, by
directing a more general attention to objects of public utility,
and by exciting discussions, which although at that time of no
advantage, have since led to more accurate investigations, have
unc^uestionably done much good.t In representing agricultu-
ral mdustry as productive of wealth, they were not deceived;
and, perhaps, the necessity they were in of unfolding the na-
ture of production, has caused the further examination of this

* When they maintain, for example, that a fall in the price of food is a pub-
lic calamity.

f Among the discussions they provoked, we must not forget the entertain-
ing Dialogues on the Corn Trade by the Abbe Gallani, in which the sci-
ence of Political Economy is treated in the humorous manner of Tristram
Shandy. An important truth is asserted, and when the autlioris called up-
on for its proof, he replies with some ingenious pleasantry.


important phenomenon, which has conducted their successors
to its entire development. On the other hand, the labours of the
Economists have been attended with serious evils; the many-
useful maxims they decryed, their sectarian spirit, the dogmati-
cal and abstract language of the greater part of their writings,
and the tone of inspiration pervading them, gave currency to
the opinion, that all who were engaged in such studies were
but idle dreamers, whose theories, at best only gratifying lite-
rary curiosity, were wholly inapplicable in practice.*

No one, however, has ever denied that the writings of the
Economists have uniformly been favourable to the strictest
morality and to the liberty, which every human being ought
to possess, of disposing of his person, fortune and talents, ac-
cording to the bent of his inclination; without which, individu-
al happiness and national prosperity are but empty and un-
meaning sounds. These opinions alone entitle their authors
to universal gratitude and esteem. I do not, moreover, be-
lieve that a dishonest man or bad citizen can be found among
their number.

This is doubtless the reason why, since the year 1760, al-
most all the French writers of any celebrity on subjects con-
nected with Political Economy, without absolutely being en-
rolled under the banners of the Economists, have, neverthe-
less, been influenced by their opinions. Raynal, Condorcet,
besides many others, will be found among this number. Con-
dillac may also be enumerated among them, notwithstanding
his endeavours to found a system of his own in relation to a
subject which he did not understand. Many useful hints may-
be collected from amidst the ingenious trifling of his work;t
but, like the Economists, he almost invariably founds a prin-
ciple upon some gratuitous assumption. Now, an hypotnesis
may indeed be resorted to, in order to exemplify and elucidate
the correctness of the general reasoning, but never can be suf-

• The belief that moral and political science is founded upon chimerical
theories, arises chiefly from our almost continually confounding- questions of
right \v\th matters of fact. Of what consequence, for instance, "is the ques-
tion so long agitated in the writings of the Economists, whether the sovereign
power in a country is, or is not, the co-proprietor of the soil? The fact is,
that in every country the government takes, or in the shape of taxes the
people are compelled to furnish it, witli a part of the revenue drawn from
real estate. Here then is a fact, and an important one; the consequence of
certain facts, which we can trace up, as the cause of other facts (such as
the rise in tlie price of commodities) to which we are led with certainty.
Questions of right are always more or less matters of opinion; matters of fact.
on the contrary, are susceptible of proof and demonstration. The former
exercise but little influence over the fortunes of mankind; while the latter,
inasmuch as facts grow out of each other, are deeply interesting to them;
and, as it is of importance to us that some results should take place in prefer-
ence to others, it is, therefore, essential to ascertain the means by which these
may be obtained. The Social Contract of J. J. Rousseau, from being almost
entirely founded upon questions of right, has thereby become, what I feel
no hesitation in avowing, a work of at least but little practical utility.

f Lw Commerce et du Governement consid^r^s I'un relativement H I'autre,


ficient to establish a fundamental truth. Political Economy has
only become a science, since it has been confined to the results
of inductive investigation.

Turgot was himself too good a citizen, not sincerely to es-
teem as good citizens as the Economists; and, accordingly,
when in power, he deemed it advantageous to countenance
them. The Economists, in their turn, found their account in
passing off so enlightened an individual and minister of state
as one of their adepts; but the opinions of Turgot, however,
were not borrowed from their school, but derived from the
nature of things; and although on many important points of
doctrine he may have been deceived, the measures of his ad-
ministration, either planned or executed, are amongst the most
brilliant ever conceived by any statesman. There can not
therefore be a stronger proof of the incapacity of his sovereign,
than his inability to appreciate such exertions, or if capable of
appreciating them, in not knowing how to afford them support.

The Economists not only exercised a particular sway over
French writers; but also had a very remarkable influence over
many Italian authors, who even went beyond them. Beccaria,
in a course of public lectures at Milan,* first analysed the true
functions of productive capital. The Count de Verri, the
countryman and friend of Beccaria, and worthy of being so,
both a man of business and an accomplished scholar, in his
Meditazione suW Econotnia politica, published in 1771, ap-
proached nearer than any other writer before Dr. Smith, to the
real laws which regulate the production and consumption of
wealth. Filangieri, whose treatise on political and economi-
cal laws was not given to the public until the year 1780, ap-
pears not to have been acquainted with the work of Dr. Smith,
published four years before. The principles de Verri laid down
are followed by Filangieri, and even received from him a
more complete development; but although guided by the torch
of analysis and deduction, he did not proceed from the most
fortunate premises to the immediate consequences which con-
firm them, at the same time that they exhibit their application
and utility.

None of these inquiries could lead to any important result.
How, indeed, was it possible to become acquainted with the
causes of national prosperity, when no clear or distinct notions
had been formed respecting the nature of wealth itself? The
object of our investigations must be thoroughly perceived be-
fore the means of attaining it are sought after. In the year
3 776, Adam Smith, educated in that school in Scotland which
has produced so many scholars, historians and philosophers of
the highest celebrity, published his Inquiry into the Nature

• See the syllabus of his lectures, which was printed for the first time, in
the year 1804, in the valuable collection published at Tililan by Pictro Cus-
todi, under the title of Scriitori classid italiani di Economia politica. It was
unknown to me until after the publication of the first edition of this work
in 1803.


and Causes of the Wealth of Nations. In this work, its au-
thor demonstrated that wealth was the exchangeable value of
things; that its extent was proportional to the number of things
in our possession having value; and, that inasmuch as value
could be given or added to matter, that wealth could be cre-
ated and engrafted on things previously destitute of value, and
there be preserved, accumulated or destroyed.*

In inquiring into the origin of value. Dr. Smith found it to
be derived fom the labour of man, which he ought to have
denominated industry, from its being a more comprehensive
and significant term than labour. From this fruitful demon-
stration he deduced numerous and important conclusions re-
specting the causes which, from checking the development
of the productive powers of labour, are prejudicial to the
growth of wealth; and as they are rigorous deductions from
an indisputable principle, they have only been assailed by in-
dividuals, either too careless to have thoroughly understood
the principle, or of such perverted understandings as to be
wholly incapable of seizing the connexion or relation between
any two ideas. Whenever the Inquiry into the Wealth of
Nations is perused with the attention it so well merits, it will
be perceived, that until the epoch of its publication the science
of Political Economy did not exist.

From this period gold and silver coin were considered as
constituting only a portion, and but a small portion, of Na-
tional Wealth; a portion the less important, because less suscep-
tible of increase, and because its uses can be more easily sup-
plied than those of many other articles equally valuable ; and
hence it results that a community, as well as its individual
members, are in no way interested in obtaining metallic mo-
ney beyond the extent of this limited demand.

These views, we conceive, first enabled Dr. Smith to ascer-
tain, in their whole extent, the true functions of money; and
the applications of them, which he made to bank notes and pa-
per money, are of the utmost importance in practice. They
afibrd him the means of demonstrating, that productive capi-
tal does not consist of a sum of money, but in the value of the
objects made use of in production. He arranged and analysed

* During the same year that Dr. Smith's work appeared, and immediate-
ly before its publication, Browne Dignan, publislied in I^ondon, written in
the French lang-uag-e, his Essai sur les principes de I'Uconomie publique, con-
taining the following remarkable passage: " The class of reproducers in-
cludes all who, uniting their labour to that of the vegetative power of the
soil, or modifying the productions of nature in the processes of their sevei'al
arts, create in some sort a new value, of which the sum total forms what is
called the annual reproduction."

This striking passage, in which reproduction is more clearly characterised
than in any part of Dr. Smith's writings, did not lead its author to any im-
portant conclusions, but merely gave birth to a few scattered hints. A want
of connexion in his views, and of precision in his terms, have rendered his
Essay so vague and obscure, that no instruction whatever can be derived
from it.


the elements of which productive capital is composed, and
pointed out their true functions.*

Many principles strictly correct had often been advanced
prior to the time of Dr. Smith ;t he, however, was the first
author who established their truth. Nor is this all: he has
furnished us, also, with the true method of detecting errors;
he has applied to Political Economy the new mode of scienti-
fic investigation, namely, of not looking for principles abstract-
ly, but by ascending from facts the most constantly observed
to the general laws which govern them. As every fact may
be said to have a particular cause, it is in the spirit of sys-
tem to determine the cause; it is in the spirit of analysis, to
be solicitous to know why a particular cause has produced this
efiect, in order to be satisfied that it could not have been pro-
duced by any other cause. The work of Dr. Smith is a suc-
cession of demonstrations, which has elevated many proposi-
tions to the rank of indisputable principles, and plunged a still
greater number into that imaginary gulph, into which extrava-
gant hypotheses and vague opinions for a certain period strug-
gle, before being forever swallowed up.

It has been said that Dr. Smith was under heavy obligations
to Steuart,X an author whom he has not once quoted, even
for the purpose of refuting him. I can not perceive in what these
obligations consist. In the conception of his subject. Dr. Smith
displays the elevation and comprehensiveness of his views,
whilst the researches of Steuart exhibit but a narrow and in-
significant scope. Steuart has supported a system already main-
tained by Colbert, adopted afterwards by all the French wri-
ters on commerce, and steadily followed by most European
governments; a system which considers national wealth as
depending, not upon the sum total of its productions, but upon
the amount of its sales to foreign countries. One of the most
important portions of Dr. Smith's work is devoted to the re-
futation 01 this theory. If he has not particularly refuted
Steuart, it is from the latter not being considered by him as

• This difficult and abstrase subject has not, perhaps, been treated by Dr.
Smith with sufficient method and perspicuity. Owing- to this circum-
stance, his inteUigent and acute countryman, lord Lauderdale, has compo-
sed an entire treatise, in order to pi'ove that his lordship had completely
failed in comprehending' this part of the Wealth of Nations.

•)- In the article Grains, in the Encyclopedic, Quesnay had remarked,
that " commodities, iwAjcA can he sold, ought always to be considered with-
out distinction, either as pecuniary or real wealth, applicable to the pur-
poses of whoever may make use of it." This, in reahty, is Dr. Smith's ex-
changeable value. De Verri had observed, (chapter 3,) that reproduction
was nothing more than the reproduction of value, and that the value of things
constituted wealth. Galiani, as has been already noticed, had saidj that la-
bour was the source of all value,- but Dr. Smith, nevertheless, made these
views his own, by exhibiting, as we see, their connexion with all the other
important phenomena, and in demonstrating them even by their consequen-

^ Sir James Steuart, author of a treatise on Political Economy.


the father of his school, and from having deemed it of more
importance to overthrow an opinion, then universally receiv-
ed, than to confute the doctrines of an author, which, in them-
selves, contained nothing peculiar.

The Economists have also pretended, that Dr. Smith was
under obligations to them. But to what do such pretensions
amount? A man of genius is indebted to every thing around
him; to the scattered lights which he has concentrated, to the
errors which he has overthrown, and even to the enemies by
whom he has been assailed; inasmuch as they all contribute to
the formation of his opinions. But when out of these mate-
rials he afterwards forms enlarged views, useful to his contem-
poraries and posterity, it rather behoves us to acknowledge
the extent of our own obligations, than to reproach him with
what he has been supplied by others. Moreover, Dr. Smith
has not been backward in acknowledging the advantages he
had derived from his intercourse with tfie most enlightened
men in France, and from his intimate correspondence with his

Online LibraryJean Baptiste SayA treatise on political economy; or, The production, distribution and consumption of wealth → online text (page 4 of 62)