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Jean-Baptiste Say, 1767-1832.
Leading 19th C. French Classical economist, often considered the father of the French Liberal School
Jean-Baptiste Say was born in Lyons to a family of textile merchants of Huguenot extraction. The Say family was originally from Nimes, but had to move to Geneva after Louis XIV ended toleration of protestants in 1685. Jean-Baptiste's father, Jean-Estienne Say, returned to France in the 1750s, settling down in Lyons and entering the silk trade. Jean-Baptiste was born in Lyons on January 5, 1767. At the age of nine, Jean-Baptiste Say was sent to an unorthodox school in Écully (outside of Lyons), but his education was cut short when the school was shut down by ecclesiastical authorities. His father's business difficulties soon forced the family to relocate to Paris in 1780/82, where his father tried to reinvent himself as a currency trader . At the age of fifteen, Jean-Baptiste was apprenticed to a banking house in Paris, and in 1785, now eighteen, Jean-Baptiste and his brother Horace were sent by to England to complete their commercial education. After two years in England apprenticed to a overseas trading company in Croydon, Jean-Baptiste Say returned to France in 1787 and took a job at an insurance company in Paris run by Étienne Clavière. A Genevan Protestant like himself, Clavière was to be highly influential on the formation of young Say, and instilled in the latter his radical revolutionary notions. It was Clavière who urged Say to study political economy, and lent him his copy of Adam Smith's Wealth of Nations, which made a deep impression on the young Say. (Claviere would later serve as Minister of Finance in the brief Girondiste ministry of the Spring of 1792, and appointed Jean-Baptiste's father, Jean-Etienne Say, to the board overseeing the issue of assignats - just as their value was about to collapse dramatically, ruining Say a second time.)
Jean-Baptiste Say was overjoyed by the French Revolution, and took to print immediately in 1789 with a pamphlet defending the freedom of the press - a pamphlet he later derided as immature scribblings. Nonetheless, it brought him to the attention of the Comte de Mirabeau, who hired Say on the staff for his newspaper, Le Courrier de Provence. In 1792, now an ardent republican, Say enlisted as a volunteer in Parisian military company and served in a military campaign in Champagne to repulse the allied armies from France. After his return from service, in May 1793, Say married Julie Jourdel-Deloches, the daughter of a prominent Parisian lawyer. This was at the height of the Terror period, and Say and his new bride took refuge in the small village of Noisy-le-Sec (near Paris). There Say entertained the notion of establishing a school, before some of his friends, aware of his aspirations as a writer, persuaded him to join their project of establishing a new literary review.
In 1794, Say became one of the founders and managing editor of La Décade philosophique, arguably the first significant review to emerge after the Terror period. Politically, it was a refuge for the young republican intelligentsia, eager to preserve the gains of the revolution from both extremes of Royalism and Jacobinism. Intellectually, it harked back to reviving the Enlightenment spirit in republican France. The journal served as the bastion of the idéologues, in the tradition of Condillac and Destutt de Tracy, who sought to base the study of man and society in the sciences, albeit looking to physiology (rather than mechanics or mathematics) for inspiration. Unlike other comparable periodicals, the Décade placed a heavy emphasis on articles reviewing works in the natural sciences and especially medicine and physiology. The liberal, scientifically-oriented Decade maintained a heated rivalry with the conservative and more literary-minded Mercure de France of Fontanes and Chateaubriand (although both would eventually merge in 1807, forming the Revue philosophique).
The ideologues flourished during the Directorate period of the late 1790s, many of them were drafted as government consultants or into important positions in the ministries. At the helm of the Decade as editor-in-chief from 1794 to 1799, Say wrote about everything (under a variety of pen-names, e.g. "Boniface Véridick"). The economic articles in the Décade were in Enlightenment liberal tradition and usually supportive of Directory policies. His 1800 essay, Olbie, was submitted to a contest run by the Institut de France.
But the ideologues began losing their access to power with the advent of Napoleon Bonaparte's Consulate in late 1799. At the outset, they perceived Napoleon sympathetically, a champion against the extremes, and Napoleon appointed legions of ideologues to the newly-formed Tribunate in early 1800, a council of intellectual notables responsible for reviewing legislation before it was submitted for a vote. Jean-Baptiste Say was one of these, appointed as Tribune in December, 1799, attached to the section of finances. He would serve as a Tribune until 1804. But the honeymoon between Bonaparte and ideologues did not last long. The intellectuals in the Tribunate, led by Benjamin Constant, wary of the growing dictatorship, soon formed a locus of political opposition to the new regime. Although Say survived Napoleon's 1802 purge of the Tribunate, he grew disenchanted with the direction things were heading, in particular the rising taxes, public debt and gradual abandonment of free trade principles by the Bonapartist regime.
It was partly in the hope of setting things right again that Jean-Baptiste Say wrote his great opus, the Traité d'économie politique in 1803. Already in his 1800 essay, Olbie, which was written and submitted to a contest run by the Institut de France, before he became tribune, Say had emphasized the importance of education in political economy, and lamented the lack of an good treatise that would make economics accessible to the general public (p.10n). The Traité was intended to fill that vacuum. It became a very successful treatise, arguably the first popular textbook on economics. It would go through several editions (1803, 1814, 1817, 1819, 1826, etc.), with great revisions of content, and would be translated into multiple languages (an English translation of the fourth edition appeared in 1821). Say's treatise is frequently (but unfairly) characterized as merely a popularization of Adam Smith's economics. This is partly because of the clarity and simplicity of Say's writing style, which has led critics to accuse him of superficiality or vulgarization. But, as Schumpeter notes, the truth is the reverse: Say's treatise is profundity parading as triviality, that its deceptive simplicity conceals its deep original insights and that Say's economics owes less to Smith and more to the French tradition of Cantillon and Turgot (Rothbard calls it "the French tradition in Smithian clothing"). The old Physiocrat Dupont de Nemours, writing to Say in 1815, believed it consonant to his own work.
Say's distinctive economics was an outcome of a muddled marriage of Condillac's utility theory of demand and Adam Smith's cost theory of supply. Value, Say claimed (with some inconsistency), was the outcome of the interaction of these two. In this respect, it departs considerably from the Classical School, where value is determined purely from the cost side. Say's approach would be later taken up by French Liberal School and he can be considered a precursor of the Marginalist Revolution. Like Cantillon before him and the Austrian School after him, Say also placed great emphasis on the risk-taking entrepreneur and even tried to include him as the "fourth" factor of production in his analysis.
It was also in the Treatise that Say outlined his famous "Law of Markets". Roughly stated, Say's Law claims that total demand in an economy cannot exceed or fall below total supply in that economy or as James Mill was to restate it, "supply creates its own demand." In Say's language, "products are paid for with products" (1803: p.153) or "a glut can take place only when there are too many means of production applied to one kind of product and not enough to another", (1803: p.178-9.). Or:
"It is worth while to remark, that a product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value. When the producer has put the finishing hand to his product, he is most anxious to sell it immediately, lest its value should diminish in his hands. Nor is he less anxious to dispose of the money he may get for it; for the value of money is also perishable. But the only way of getting rid of money is in the purchase of some product or other. Thus the mere circumstance of creation of one product immediately opens a vent for other products." (J.B. Say, 1803: p.138-9)
The radical laissez-faire notions expounded in the 1803 Treatise caught the attention of Napoleon Bonaparte himself. Summoning Say to a private meeting, Napoleon demanded that Say rewrite parts of the Treatise to conform with his attempt at creating a war economy, built on protectionism and regulation. Say refused. Napoleon proscribed the Treatise and had Say ousted from the Tribunate in 1804.
Although offered another government post in the taxation bureaucracy as compensation, Say was too disgusted by the imperial regime to consider it, and decided to strike out as private entrepreneur. In July 1804, Say set about establishing a cotton-spinning mill at Maubuisson Abbey in the Val d'Oise (northwest of Paris), then, before the end of the year, decided to move to northern France to set up a larger cotton mill with an associate at Auchy-les-Hesdins (near Pas-de-Calais). Say and his family would remain in Auchy for the next few years, concentrating on his business and growing fabulously rich. Say's enterprise nonetheless felt the pinch of the wartime Continental blockade. In 1812, Say sold his shares to his partner, and returned to Paris, living as a speculator.
After the fall of Napoleon in 1814, Say finally published a much-revised and enlarged second edition of the Traité He then spent some time in England, ostensibly to observe the state of post-war industry. There, Say met Ricardo, Bentham, Malthus and Godwin, and, upon his return in 1815, published his reflections on England and the English. Around the same time, Say published a small tract, the Catéchisme, a simple exposition and conveyance of economic principles for the general public, in the form of questions and answers.
Although virulently opposed to Bonaparte, Say was not enthusiastic about the restoration of the monarchy, and contemplated emigrating to America. He open a correspondence with American ex-president Thomas Jefferson in 1815, inquiring about conditions in Virginia, but now approaching fifty, realized it would be a difficult transition. Despite his old republican credentials, the restored Bourbon government showered Say with numerous dignities and honors. In 1816, he was invited him to deliver a course of lectures on economics at l'Athénée Royale, a private college. In 1819, Say was appointed as Chair of Industrial Economy at the Conservatoire National des Arts et Metiers. His popular lectures at the Conservatoire would be published in 1828 (Cours complet).
Say's Law of Markets came to divide economists in the General Glut Controversy, which broke out around 1819-20. Say joined in the fray, attacking the underconsumption thesis in his letters to Malthus (1820) and in his 1824 exchange with rival countryman Simonde de Sismondi in the Revue Encyclopédique. The centrality of Say's contributions in this debate led finally to the first English translation of Say's treatise in 1821. Say was dissatisfied with the British translator Prinsep, who had taken the liberty of inserting editorial notes connecting Say arguments to Ricardo, and translating terms in a way that gave the Treatise an overtly Ricardian tinge. Say much preferred the contemporary American translation by Biddle.
In March 1831, Say was granted a chair (the first in political economy) at the prestigious Collège de France in Paris. He gave a full course of lectures in 1831-32, but died a few weeks into his second year. The French Liberal School followed up on Say.
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