EKIP– Expert Club for Economics and Politics A Different Opinion
Many young libertarians are familiar with Frédéric Bastiat, but few are familiar with his most significant predecessor, who is also one of the greatest "classical" economists - Jean-Baptiste Say. Today, Say is one of those figures in the history of economics who is systematically ignored, despite having had a huge influence on its development. Say was also one of Murray Rothbard's favorite economists, who considered him the most significant predecessor of the Austrian School of Economics (before Bastiat), developing a theory that could be considered an early version of Austrian praxeology.
Early years and first steps in economics and politics
Jean-Baptiste Say was born on 5 January 1767 in Lyon, France. He was initially intended to pursue a commercial career and in 1785 was sent with his brother to study in England. After completing his education at a private school in Croydon, Say began working for a merchant in London. In 1787, he returned to France and began working for an insurance firm. He also began writing on topics such as politics and economics. His first pamphlet, on freedom of speech, was written in 1789. In 1793, he became secretary to the then Minister of Finance of France. A year later, he became the first editor of the journal "La Decade Philosophique", which was the main publication of the most influential laissez-faire group of intellectuals in France at the time - the so-called "philosophes" (philosophers).
It was while he was editor of the journal, until 1800, that Say began to disseminate and develop the theories of Adam Smith. The Frenchman became famous not only as a dedicated defender of laissez-faire economics, but also as one of the first strong supporters of industrialization, at a time when the intellectual climate was still significantly more favorable to agriculture, due to the significant influence of the Physiocrats.
At the time, the journal's staff called themselves " ideologues " because they focused on the study of " ideology ", which for them meant the science concerning all forms of human action (this was most likely the original narrow meaning of the word "ideology"). This intellectual group, and especially Say and his close friend Antoine Destue de Tracy, had a significant influence on the American revolutionary and president Thomas Jefferson. Jefferson himself took on the task of importing and popularizing many of the laissez-faire ideas of La Decade Philosophique to America .
Publication of "Treatise on Political Economy" and opposition to Napoleon
In 1799, Say became a member of the ruling tribune during Napoleon's consular regime. There, he tried to exert as much influence as possible on the policies of the French state in the direction of laissez-faire. However, this was a difficult task, given that the future emperor was looking for ways to centralize more and more power in the hands of the state. Because he was unwilling to compromise his own beliefs in support of Napoleon, Say was removed from the tribune in 1804.
In the same year he published his magnum opus - “ Traité d'économie politique ou simple exposition de la manière dont se forment, se distribuent et se composent les richesse” (known in Bulgarian as "Treatise on Political Economy"). The treatise was republished six times during Say's lifetime. By its sixth edition in 1829, its size had doubled and it had been translated into the language of every major European nation. During the reign of Napoleon, publication of the second edition was blocked until 1814 (when Napoleon fell from power) because a chapter was considered offensive to the emperor and his policies. After being removed from public office for his ideas, Say became a cotton manufacturer and became one of the most successful industrialists in France at the time.
For the rest of his life, Say's treatise was very influential throughout continental Europe, especially in Germany, Italy and Spain. It was less well received in Britain, however, where most intellectuals considered him an imitator of Smith. The treatise did, however, influence James Mill (the father of John Stuart Mill), through his intellectual mentor Dr. Brown. Mill was the first economist in Britain to promulgate Say's Law (also known as the "Law of the Market"). The French economist was a staunch supporter of free trade, following the tradition established by Adam Smith, and in his writings he emphasized the harm of tariffs and trade barriers, no matter how low they were. In this respect, he was probably also influenced by James Mill, who was one of the great advocates of free trade in Britain.
The difference between Say and Smith (and other British economists)
Although many Britons think of him as simply a French Adam Smith, Jean-Baptiste Say's economic theory was quite different in many ways. First, he was a much clearer and more accessible writer - in fact, the accessibility of his language and the ease with which he could explain otherwise complex ideas in simple language were noted by a number of other economists at the time. This is why his treatise became the standard economics textbook in American universities in the first half of the 19th century. Unlike Smith, who tended to describe the economy as a purely mechanical process, Say emphasized the role of the entrepreneur-capitalist. Say also did not share Smith's overwhelming emphasis on agriculture as the main source of wealth, and believed that new technologies and industrialization were equally, if not more, important.
There is also a great difference between Say and Smith, and all British economists, regarding the theory of economic value. The British, following Smith and Ricardo, defended the thesis that economic value is a derivative of the costs of producing each good and the economy. Say, on the other hand, believed that the value of goods and services depends entirely on the subjective preferences of consumers in the market. He was in fact somewhat ahead of his time and defended an early version of the theory of marginal utility, which was developed after 1870 by a number of European economists, including the founder of the Austrian School - Carl Menger. Say was a predecessor of the "Austrians" also in terms of his methodology. He believed that economics was primarily a deductive science and emphasized above all the importance of the logical consistency of economic theories.
And of course, Say is most famous for his "Law of the Market," which states that the demand for goods and services represents the supply of other goods and services, with money serving as an intermediate good for exchange between the two. The implication of this law is that there can be no "total surplus" in the market - surpluses can only occur in certain sectors, but never in all at once. A hundred years later, the infamous John Maynard Keynes would become most famous for his supposed "refutation" of Say's Law. But in fact, what Keynes does is present a mutilated and misleading version of Say's thesis (via the famous phrase "supply creates its own demand") and then attack and "refute" this dummy. Many other economists criticize Keynes for his misunderstanding of Say's Law. One famous example is Ludwig von Mises, in his essay "Lord Keynes and Say's Law."
Let's not forget Sei's legacy
Unfortunately, despite being one of the greatest economists of his time, and among the greatest classical liberals of France, Say has been largely forgotten and ignored by many contemporary economists. Fortunately, his legacy is still alive, for it survives through the writings of a number of free-market advocates and economists of the Austrian and Monetarist (Chicago) schools. Let us hope that it survives into the future.
