Say, Jean Baptists

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Say, Jean Baptists

Jean Baptiste Say (1767-1832) was born in Lyons of a cultivated Protestant merchant family. After a sound education and a two-year stay in England, he joined an insurance company. Say was an enthusiastic supporter of the ideas of the French Revolution and took part as a volunteer in the military campaign of 1792. Bookish and inclined to philosophy, in 1793 he joined the editorial board of a new magazine entitled La décade philosophique littéraire et politique, par une société de républicains, which took as its motto “Enlightenment and morality are as much needed for preserving the Republic as courage was needed for winning it.” He soon became the editor-in-chief of the journal, which announced that its aim was “to keep the public informed on everything new concerning literature, science, agriculture, and the arts.”

In 1799 Say was appointed a member of the Tribunate, under the Consulate. He took part in a competition arranged by the Institut de France on the subject “By what means and what institutions can morality be established in a people?” His contribution, “Olbie: Ou, essai sur les moyens de réformer les moeurs d’une nation,” gave promise of his gifts as a moralist and economist. Following up his thesis that “the first book on morality for the Olbians should be a good Treatise on Political Economy” (Oeuvres diverses, p. 593), he set about composing such a work, inspired to a great extent by the ideas expounded by Adam Smith in his celebrated Inquiry Into the Nature and Causes of the Wealth of Nations, with which Say had become acquainted as early as 1789. Say’s book appeared in 1803 and soon had considerable success.

In the meantime, Say’s disapproval of the Napoleonic regime led to his dismissal from the Tribunate. He moved to a small town in northern France, Auchy-les-Hesdin, to set up a cotton-spinning plant. He stayed there seven years before he sold out in 1813 and returned to Paris. The fall of the empire and the return of the Bourbons permitted him to resume intellectual activity aimed at the general public. In 1815 he began to teach at the Athéndée what was probably the first public course of political economy ever given in France, and in the same year he published his Catéchisme d’économie politique. Two years later the government established a chair of industrial economy for him (the term political economy still irightened people) at the Conservatoire des Arts et Metiers. Finally, in 1830, the aged master did become professor of political economy at the College de France, in the first chair of its kind to be established. Meanwhile, he had published his Cours complet d’économie politique pratique (1828-1829) in six volumes, a work, as the long subtitle indicates, “designed to teach statesmen, landowners and capitalists, men of learning, agriculturalists, manufacturers, businessmen, and in general all citizens, about political economy.”

Although it has been alleged that Say was a mere expositor and popularizer of Adam Smith’s ideas, he did more than merely transmit these ideas. He did, of course, present the ideas that he borrowed from Smith with typical French order and clarity, and he justly complained of obscurity and confusion in Smith’s own statements in The Wealth of Nations. Say wanted to produce what he described as “a work in which sound observations were reduced to general principles that could be accepted by any judicious man; in which those observations and principles were so completed and coordinated as to reinforce one another, so that they could fruitfully be studied at any time and in any place” (1803, p. xlviii in 1860 English edition). And this was not merely an interpretative work: at important points Say showed originality, and he undoubtedly contributed to advancing the science of economics.

Philosophical position. In his basic philosophy, Say was strongly influenced by the ideological ambience of his time. Like many of his contemporaries, he was at once deist, liberal, and rationalist. In the realm of scientific and doctrinal convictions, however, he showed little toleration but instead a dogmatism that may have been related to his authoritarian nature. This is one of several ways in which he differed sharply from Adam Smith: he was never touched by doubt. As a disciple of the Encyclopedists, he was an intransigent scientist, even a passionate one, and convinced of the predominant influence of economic phenomena in the life of the whole society. On this point, as in the case of the preponderant role of industrial activity in production as a whole, it may be possible to establish a connection between Say’s ideas and certain theories of Karl Marx, and in any event, with those of Saint-Simon and the Saint-Simonians.

His belief in economics as a science led Say to try to reconcile his naturalism and his rationalism. He was able to do so because he conceived of the laws of nature as necessarily rational (or providential); in this respect, he was adopting a point of view the physiocrats had developed a half century earlier. But it is noteworthy that Say went on to establish similarities between the science of economics and physiology, transposing the latter from the individual to the social level and preferring a biological model of the economy to a purely mechanical one. He was later to be followed on the same track by Alfred Marshall, the great English economist. It should be pointed out, however, that Say’s method was never made rigorously explicit. While asserting the sovereignty of facts in scientific matters, he nonetheless interpreted them according to the results that he intended to reach. Thus, he appeared as an “ideologue” to some of his contemporaries.

Relationship to Adam Smith. Say deeply admired the work of Adam Smith. Of The Wealth of Nations he said, “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” (1803, p. xxxviii in 1860 English edition). But Say was not content merely to repeat or rethink the ideas of his master. He filtered them, clarified them, and at several points went beyond them. He made a more systematic critique of physiocratic ideas, based on an expansion of the concept of productivity and the inclusion of immaterial products among the positive results of economic activity. Say gave greater depth to value theory by introducing the notions of need and utility. As a true precursor of the marginalist school, he noted that the needs of men may be classified according to their urgency in scales of preference, that they give rise to utility, which in turn determines demand. Demand then interacts with supply, which in turn is determined by the cost of production. For Say, however, in contrast to Ricardo, for example, utility is the stronger determining factor in prices; the cost of production enters only as a kind of restrictive condition. There too Say appears to have anticipated Alfred Marshall’s well-known theory. It is of interest to see that Say realized perfectly that the explanation of the phenomena of value and price is not to be sought in terms of unilateral causal relationships but in terms of the concept of interdependence.

Even more than Adam Smith, Say strongly emphasized that the role of science is primarily one of observation and explanation. Where Smith, following the physiocrats, came forward as a physician for society, Say aimed exclusively at being a naturalist. His Traité professes to be a “simple exposition” of a body of exact knowledge, applicable under all circumstances.

Although agriculture still had a predominant position for Smith, it no longer did for Say. To be sure, the half-century separating their work witnessed the entire industrial revolution in Britain, and in France its beginning. Say was in a position to observe its first manifestations, in the seven years that he devoted to business. Thus he made industry and even commerce as important as agriculture in the total productive activity of society.

Major contributions. Say appreciated the importance of the entrepreneur in economic life, a role Smith had neglected to define and which has remained, since Say’s time, a permanent feature of economic analysis. This essential actor has functions that are quite distinct from those of the capitalist strictly so called (British authors confused these two conceptions). The entrepreneur, whether he be an industrialist, businessman, or farmer, has a truly strategic position in economic life, in that he is par excellence the intermediary between landowners, capitalists, workers, and consumers. He is also pictured as performing a truly creative function as the organizer responsible for production, striving unceasingly to improve it, especially in the industrial sector. Over a century later, Schumpeter was to take up and perfect this dynamic conception of the role of the true entrepreneur, the creator of new combinations (innovations).

Say’s development of the theory of the distribution of the social product, deduced from the previous analysis, was a marked advance over current theories. Say coordinated this theory precisely and harmoniously with the theories of exchange and production. The entrepreneur, a buyer of productive services at known prices (the services of men, capital, and lands) and a seller of products at uncertain prices, is thus seen as assuming a set of fundamental functions, as presiding in a way over activity that is both production and distribution. His specific share is the profit, a share that is described as essential, residual, and precarious. This brings us to the very threshold of Walras’s grand conception of economic equilibrium.

Another of Say’s highly original contributions to economic analysis is his famous law of markets, which undoubtedly did more to make its author celebrated than all the rest of his work. This law (cf. Schumpeter in History of Economic Analysis 1954, pp. 615-626) may be interpreted in many different ways. We know its very simple, almost lapidary content: “Products are exchanged for products.” This may be taken as meaning that the role of money in the economy is, after all, secondary (the conception of the “monetary veil"). But one may also infer that everyone taking part in an exchange is interested in the prosperity of his partner, whether it be an individual or a nation, a thesis that goes counter to the mercantilist conception that “one gains only what the other loses.” Finally, the law may imply a theory of crises, based on rejection of the concepts of general overproduction and underconsumption and the assertion of the essentially transitory and limited nature of these imbalances. The remedy is therefore not the limiting of production but its expansion. “Produce, produce, that is the whole thing” Say concluded, in his Cours complet, that although “there is an excess in certain products, there is a shortage in others."

Importance and influence. All in all, it would appear that Say’s work, without bearing the marks of really great genius, does give its author an eminent place in the development of economic thought. Say was not entirely an innovator, even in fields where he was not following Adam Smith and did show real originality: on many points he links up to a tradition solidly rooted in France. As Schumpeter remarked judiciously (1954, p. 492): “Say’s work is the most important of the links in the chain that leads from Cantillon and Turgot to Walras.”

He opened up new paths, but later authors followed them with more success than he. This was the case with the members of the marginalist school—Carl Menger, Stanley Jevons, and especially Leon Walras—who were able to employ the notion of utility in a much more precise and scientifically valid manner than their common precursor, Say. (Walras tended to minimize his debt to Say, but it was nevertheless important.) Again, the fine effort at synthesis made by Alfred Marshall and the neoclassical school is not entirely untouched by the teachings of Say. His influence can be traced beyond the general equilibrium school to such essentially modern authors as Schumpeter.

It is true that in the eyes of many of our contemporaries Say is seen primarily as the author of the law of markets, one of the favorite butts of Keynesian and Neo-Keynesian criticism, and this “law,” interpreted and misinterpreted as it has been, may remain his chief title to fame. But perhaps he will be remembered for his power to build on established intellectual traditions and to stimulate other thinkers: there lay his true merit, which only time will confirm.

Gaston Leduc

[For the historical context of Say’s work, seeEconomic thought, article onphysiocratic thought; and the biographies ofSaint-Simon; Smith, Adam. For discussion of the subsequent development of his ideas, seeDemand and supply; Entrepreneurship; Utility; and the biographies ofJevons; Marshall; Menger; Schumpeter; Walras.]

WORKS BY SAY

(1803) 1964 A Treatise on Political Economy: Or, the Production, Distribution and Consumption of Wealth. New York: Kelley. → First published as Traité d’économie politique: Ou, simple exposition de la maniere dont se forment, se distribuent, et se consomment les richesses. Translation of extract in text provided by the editors.

(1815) 1816 Catechism of Political Economy: Or, Familiar Conversations on the Manner in Which Wealth Is Produced, Distributed, and Consumed in Society. London: Sherwood. → First published as Catechisme d’économie politique.

(1828-1829) 1852 Cours complet d’économie politique pratique. 2 vols. 3d ed., enl. With notes by Horace Say. Paris: Guillaumiri. → First published in 6 volumes. Translation of extracts in text provided by the editors.

Oeuvres diverses. Paris: Guillaumin, 1848. → Translation of extract in text provided by the editors.