France Economic History

France Economic History

Economic Thought in France and Belgium, From 1870 To World War II

The first real economists, the Physiocrats, were Frenchmen, and to France belongs an honorable part in the founding of the science of political economy. But with the close of the eighteenth century, it will be remembered, England took the lead, and after Say, France neither produced any important works nor possessed a school of economists until about 1845, though French idealistic or Utopian Socialism nourished.

French "Traditionalism": Individualism, Optimism, Absolutism

At length, near the middle of the nineteenth century, there arose a revival of Classicism, marked by the advent of such men as Dunoyer and Bastiat. English influence was decidedly dominant, and after 1860, when tariff barriers between England and France were largely removed, the "Manchester School" carried the day with a high hand. (The commercial agreement just alluded to was largely influenced by Cobden and the French economist and statesman, Chevalier.) Individualistic philosophy and deductive methods reigned supreme.
The typical French economist was highly optimistic and absolute in his thought. This period, extending down through 1878, has been called one of traditionalism. Bastiat was its dominating spirit.

The statistical work of Quetelet was not historical, and not inconsistent with absolutism in thought.

As Professor Gide has pointed out, it is well to note here that the French school of Liberalists has never been quite identical with the English in its thought. From Mercier de la Riviere to Leroy-Beaulieu, their optimism has been underlain by a belief in the beneficence of "natural law." Their optimism has concerned the future, that is, the possible future. Evils they recognize; but these arise, they believe, from failing to observe the natural law — in not leaving industry free and untrammeled.

Some reasons for this optimistic tendency have been suggested in connection with Bastiat's thought. If to these reasons there be added the fact that until well into the present century the prevalence of small farms and industrial enterprises in France made individualism more natural and reasonable than elsewhere, it will be easier to understand the tenacious hold of an old school in the land of the Physiocrats.

To be sure, there were exceptions among French-writing economists; Rossi (1787-1848), Sismondi, Cherbuliez (1797-1869), and Le Play were such. But Rossi was an Italian; Sismondi and Cherbuliez were Swiss; and, if Le Play was inductive and something of a romanticist reactionary, still he does not fall in the enemy's camp. The work of Cournot and Walras was rejected by the dominant school, the latter having been virtually an exile in Switzerland.
Such was the situation in 1878, when a new movement became effective in France, as, in various ways, it had been working in other countries. But the French Classical economics was too much in accord with the culture and institutions of France to be cast off quickly or even be greatly changed. It continued to prevail in public affairs. The Liberalists (economic conservatives) are still found in certain universities. Moreover, it reigned in the dominant Academie des Sciences Morales et Politiques and spoke through such journals as Le Temps, Les Debats, Revue des deux mondes, and the venerable Journal des economistes. So, too, with the Economiste frangais and the Monde economique. Among its adherents have been numbered Courcelle-Seneuil (1813-1892), Leon Say (1826-1896), Block, Molinari, Passy, Levasseur (1828-1911), Baudrillart (1821-1892), Juglar (1819-1905), Colson, Schatz, Schelle, Stourm, Leroy-Beaulieu, Yves Guyot, De Foville, Neymarck, Cheysson (d. 1910), and Beauregard (1853-1919).

This list may be divided into two groups. One, the older individualists, may be represented by Frederic Passy and Gustav de Molinari. Passy (1822-1912) was an idealist, and strongly emphasized property rights. He also considered ethical ideas, and is widely known for his activity in promoting international peace. Molinari (1819-1912) made individualism the keynote of his thought, but was optimistic to the verge of Utopianism. He appeared to simplify the complexities of society unduly when he virtually reduced all activities to the sway of three laws: self-interest, competition, and value. He was long the editor of the Journal des economistes. Simile Levasseur (d. 1911) may also be classed here, though his realism and the wonderful grasp of facts shown in his numerous writings, somewhat differentiate him. He was influenced by Roscher, and perhaps his best work was done in the fields of statistics and geography. He was an optimist, though his latest work showed some signs of wavering.

The younger group of individualists would include Leroy-Beaulieu (1843-1916), Yves Guyot (1843-1928), De Foville (1842-1913), Neymarck (1848-1921), G. Schelle (1845-1927), and J. Lescure (b. 1882) as its chief representatives. These men were mostly statesmen and statisticians. Though not without differences of opinion among themselves, they were all united in their hostility to Socialism, protectionism, and state intervention; but gave some recognition to recent developments in the theory of price. Guyot was the most extreme and uncompromising. Leroy-Beaulieu accepted more government intervention, and showed some of the influence of the Historical School. He did good work in public finance.

Among the important later products of the thought of this group was Colson's comprehensive Cours d'economie politique, the publication of which began in 1901. This work is eclectic, and in many respects resembles Marshall's Neo-Classicism. It is one of the earlier French works to expound the doctrines of the Mathematical School. M. Colson, an engineer, is well known as the author of a valuable treatise on transportation (Transports et tarifs).

In addition to these earlier men, certain economists active during the first half of the present century who may be classed as "French Liberalists" are: A. Bechaux (1854-1922), L. Baudin, O. Noel (1846-1917 or 1918), C. Perreau (d.1937), M. Rouxel, E. Villey, B. Nogaro, and J. Lescure. Jean Lescure's thought shows a frank and vigorous Liberalism. He accepts the law of supply and demand, attributes capital formation to voluntary private saving, and concludes that "good money is gold money."2 Louis Baudin, too, though giving some attention to monopoly and imperfect competition, is a strong individualist who accepts Neo-Classical value theory, defends a free gold standard, and sees "the individual, master of velocity, triumphing over the state, master of volume."

There is naturally a considerable body of eclectic thought by economists who combine Classical doctrines with more modern ideas such as marginal utility. Noel, Truchy, Perreau, and Ansiaux (Belgian) are worthy of note in this connection as producers of substantial works.
The chief development in the thought of the Liberalists has been a more practical tendency. The members of the Acadimie came to defend Liberalism on other than merely a priori grounds, and their work became largely concrete and descriptive.