Say, Jean-Baptiste (1767-1832): French political economist.
Jean-Baptiste Say experienced a lifetime of major political change including the French Revolution, the Reign of Terror, Bonaparte’s Empire and the restoration of the monarchy. Born in Lyon in 1767, to a Protestant family of textile merchants of Huguenot origin, Say died in Paris in 1832.
In 1785, his parents sent him to England to learn English and to acquire business training. Upon his return, Say wrote his first publication, “Sur la liberté de la presse” in 1789, almost a century before the establishment of freedom of the press in France with “La loi du 29 juillet 1881 sur la liberté de la presse.” In 1792, Say served in a French military service campaign against the Allied armies. He then married, lived forty years with his wife and had two sons and two daughters. According to Forget (1999), Say was influenced not only by Smith, Adam and his contemporary economists, but also by his own experiences and French political realities, from the fall of the French monarchy to its restoration, and by Republican thinkers. In The Social Economics of Jean-Baptiste Say, Markets and Virtue (1999), Forget indicates the fundamental question behind Say’s work entitled Olbie, ou essai sur les moyens de reformer les moeurs d’une nation, is to examine whether social order functions because of legislation and social institutions or because of individual intentions.
Unlike Smith, Adam who places the individual at the center, for Say, it is the social order which is central and the individual complies to maintain a healthy society. This causes healthy, spontaneous order as a consequence. According to Say, this top-down interventionism may come from the state, the family or from different organizations. Public education in this environment becomes a fundamental means for the transmission of such an ideology (Forget, 1999). Although Say believed in interventionism in social matters, he was less inclined to do so in political economy. In his Treatise on Political Economy published in 1803, Say claims “any laws that prevent the purchase of commodities, also restrict sales” (Forget, 1999). Say appears to rupture with state interventionism in business matters. This concept attracted Republican thinkers and Bonaparte, Napoleon for different reasons. When the Emperor asked for the rewriting of treaties to accommodate his intentions of protectionism and regulation, Say refused and continued to believe in peace and prosperity. For him, even the victors are impoverished by wars (Forget, 1999).
According to Say, the notion which underlines saving limits and reduces consumption is false. Once savings are reinvested, they are reproduced in the shape of that investment or in productive employment favorable for further consumption. In their reproduction, savings generate value, and value, Say claims, is “the outcome of the interaction between demand and supply” (Kitchener, 2001). It is not determined only from the cost side as the Classical Ricardian School claims, but “the value is the work of time and labor, besides other ingredients,” (Kitchener, 2001) such as the interaction between supply and demand. When producers consume values, they produce new ones simultaneously. When more value is produced than consumed, the producers contribute to collective and to individual wealth. The more values saved and reinvested, the more society is prosperous. Say stresses the utility of value for its users rather than its related labor (Kitchener, 2001).
Say also believes that supply creates its own demands, meaning those consuming or/and producing a supply are at the same time engaged in demanding more supplies. The better the manual labor and the bigger the purchasing power, the more goods will be consumed and therefore supplied. In his opinion, total demand in an economy cannot exceed or fall below total supply except when too many means of production are applied to one kind of crop or product and not enough to another (Kitchener, 2001). The lack of diversification in the means of production allocation can lead to economic crisis. This will have a domino effect on the national economy as a whole and maybe on other nations as well. Say believed that “all nations share in good, as in bad, fortune” (Forget, 1999).
Despite the limits of Say's approach to the self-regulating system of markets, the concept was taken up by the French Liberal School, emphasizing a laissez-faire attitude in lieu of government intervention and regulation. Disgusted by Bonaparte, Napoleon’s imperial protectionist regime and politics of war, Say moved to Pas-de-Calais and set up a cotton factory at Auchy-les-Hesdins. There, he realized the importance of location in manufacturing as well as risk-taking, which he tried to add as the “fourth” factor of production in his analysis. In Pas-de-Calais, Say became rich and decided to move back to Paris and live as a speculator. In 1831, the July Monarchy offered Say a chair in Political Economy at the Collège de France and he devoted himself to teaching and writing until his death in 1832.
Evelyn L. Forget, Social Economics of Jean-Baptiste Say, Markets and Virtue, 1999.
Jean-Baptiste Say, A Treatise on Political Economy or, The Production, Distribution & Consumption of Wealth, Kitchener 2001.
College of Charleston