History of political economy in Europe

Front matter

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Chapter I. Pagb

Political economy more ancient than supposed. The Greeks and Romans had theirs. Its resemblance to that of our time. Differences between them. Successive modifications this science has experienced. General view of the subject • 5

Chapter II

Political economy among the Greeks. Their ideas on slavery. Ad- . ministration of their finances. They live by the labor of slaves and the tributes of their allies. The theorikon. The Kleruchiae. Each citizen considered himself a joint-owner of the state. What a family needed in order to live. Public lands. Mines. Money, The temple at Delphi a virtual l)ank of deposit. The interest of money in Greece. Importance attached to the finances. Habits of the Athenians. . . 24

Chapter III

Economic systems attempted or proposed in Greece. Laws of Lykurgus. Republic of Plato. Econofnics of Xenophon. Politics of Aristotle. ...........

Chapter IV

The Greek colonies and their relations to the mother country. They contributed to extend over a great part of Europe the ideas whose centre was at Athens and Sparta. They were founded, like ours, by emigrations, but they enjoyed a greater independence. . , . 46

Chapter V

Political economy among the Romans, in the different ages. They are essentially warriors and pillagers under the Republic, Engineer*

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XVIU CONTENTS.

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and administrators under the Empire. Their contempt for labor. Immense devastations they commit. Fall of Carthage. First attempts at organization under the emperors. . , . . . . . .51

Chapter VI

The Political Economy of the Romans from the commencement of the empire. Abuse of conquests. Contempt for commerce. Condition of the laboring classes. Insolent aristocracy. Famished populace. They take to celibacy. Public and private selfishness. Absence ot manufactures. Utility sacrificed to grandeur. ..... 58

Chapter VII. *

Importance of means of communication among the Romans. Sei-- vices their great roads might have rendered to civilization and to commerce. Sketch of the principal Roman laws in matters of political economy. General view of their commerce. . . • , .69

Chapter VIII

Rapid decline of the empire. Its principal causes. First appearance of Christianity. Influence of Asiatic customs at Constantinople. Modification of the civil, religious, industrial and commercial ideas. . 76

Chapter IX

Changes brought about in the social economy of Europe through the influence of Christianity. Its vigorous and intelligent organiz£iion. The monasteries create community life. The religious principle gives rise to hospitals and asylums. The priest to-day unequal to his cask. Opinion on this subject. . ..,...« 86

Chapter X

Economic consequences of the invasion of the Barbarians and the dismemberment of the Roman»empire. New elements introduced into the social organization. ......... loo

Chapter XI

Last rays of civilization at Constantinople under Justinian. This emperor sums up all the legislation of the Romans. His Code. The Pandects. The Institutes, The laws of Justinian are the archives of the past; the Capiiulaties of Charlemagne, the programme of the future. ............ 106

Chapter XV

Considerations on the situation and influence of the Jews in the middle ages. Nature of the services they rendered to political economy. Were they the first founders of credit? Origin of the bill of exchange and of monts-de-pi^te'. .......... 145

Chapter XVI

The Hanse tovi^ns. Object of their association. Singular organization of their counting-houses. Importance of the entrepot of Bruges. Origin of the Commission-trade. ........ 155

Chapter XVII

The aifranchisement of the communes and its influence on the course of economic and social progress. . . . . . . . .164

Chapter XVIII

The economic legislation of the first kings of France of the third race. Ordinances on the Jews. On moneys. Against the exportation of coin. The commerce in grain. Sumptuary laws. Oflicial origin of our commercial prejudices. . . . . . . .176

Chapter XIX

Organization of corporations during the reign of Saint-Louis. The Book of Trades, by Etienne Boyleau. General view of the system of , corporations. Its former advantages and present disadvantages. . . 189

Chapter XX. *

The impulse given to political economy by the Italian republics of the middle ages. Increasing influence of labor. Increase in personal property. Resulting changes in the European social state. Foundation of credit. Bank of Venice. Origin of the modern prohibitory system 208

XX CONTENTS.

Chapter XXI. Page

The revolution brought about by Charles V in the course of political economy. The spirit of conquest substituted for the commercial spirit. Official establishment of the restrictive system. Slave trade. Financial operations. Convents and pauperism. Opposition of protestantism. ............ 2i8

Chapter XXII

The protestant reformation and its influence on the course of political economy. Secularization of the inonks. Sale of church property. Its importance in England at that period. Poor laws. Increase in number of working-days. , . . . . ... . . . 228

Chapter XXIII

Consequences of the discovery of the New World, and the colonial system of the Europeans in both Indies. ...... 241

Chapter XXIV

The various monetary systems which have prevailed in Europe, from the ancients to the discovery of the mines of the New World. Economic results of the discovery of these mines. General view of the works that have been published on moneys. . . . . 262

Chapter XXV

Some bad results from the discovery of the American mines. First appearance of paupers in England. Ministry of Sully. His financial reforms. His erroneous ideas on manufactures and commerce. He is the most ardent propagator of the ?nercantile system. His inclination for sumptuary laws. His severe attacks on financial abuses. Definitive results of his administration. ....... 278

CHAPER XXVI.

The ministry of Colbert and its economic consequences. Edict and tariff of 1664. Its real aim. Edict of 1667. Encouragements to marriage. Fine instructions given to ambassadors. The real doctrines of Colbert. H[e is wrongly considered the founder of the prohibitory sj'stem. . , ... . . . . . . . . 2gi

Chapter XXVII

Political economy under Louis XIV. Commercial ordinances. The Marine. Waters and forests. Black code. Councils ol prud'hotnnies. Poor-laws. Establishment of asylums for foundlings. . Creation of commercial companies. Opinions of the contemporary economists : Vauban, Boisguilbert, the Abbe' of Saint-Pierre 304

CONTENTS. xxi

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Propagation of the mercantile system in Europe, under the name of Colbertisvi. It is neutralized by contrabandage. Influence of contra- L/ bandage on the solution of economic questions. . j . . . 313

Chapter XXIX

The first contest of the mercantile system with freedom of trade, between England and Holland. Disastrous effects of that contest. Navigation Act. Eloquent philippic of M. D'Hauterive against the restrictive system. . . . . . . . . . , .321

Chapter XXXIV

The labors of Adam Smith and their influence on the progress of political economy. The differences between his doctrines and those of the Economists. Exposition of the creations due to him. His fine definitions of value, labor, capital and money. Immense results from his discoveries. ... .......

Chapter XXXV

The system of Malthus on population. Exposition of his formulae. Presentation of his conclusions. Doctrine of Godwin. It has the fault

XXll CONTENTS.

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of being as absolute as that of Malthus. It is more humane. RemarW able boldness of the book of Godwin. Various writings on the same question. New ideas on population, by Mr. Everett. The book on Charity, by M. Duchatel. Christian political economy, by M. de Villeneuve-Bargemont. Protests of M. de Sismondi and of the Abbe de la Mennais. ............ 408

Chapter XXXVI

The influence of the writers of the eighteenth century on the course of political economy in Europe. Spirit of the Laws, Economic works of J. J. Rousseau. Economic opinions of Voltaire. The Abbe Raynal. 418

Chapter XXXVII

Economic doctrines of the French revolution. They have all a social rather than industrial character. They are cosmopolitan in theory and restrictive in practice. The Convention and the Empire use them as weapons of war. General V(iew of the results of the continental blockade. It existed in fact before decreed. Fatal prejudices it has spread abroad in Europe. . . . . . . ■ . . . 429

Chapter Xxxviii

The economic revolution brought about in England by the discoveries of Watt and Arkwright. Economic consequences of the independence of the United States. Reaction of the French Revolution on the financial system of England. Increase of taxes. Suspension of payments by the bank. Development and abuses of credit. Enormity of the public debt. Consequences of the general peace. .... 441

Chapter XXXIX

J. B. Say and his doctrines. Important consequences of his theorj' of openings for trade. Exposition of the services that writer has rendered to science. Character of his school. It is that which has popularized political economy in Europe. ....... 453

Chapter XL

Political economy in England since the beginning of the nineteenth century. System of Pitt, maintained by Thornton, attacked by Cobbett. Doctrine of Ricardo. Writings of James Mill. Of Mr. Torrens. Of Mr. McCulloch. Of Mr. Tooke. Labors of Mr. Huskisson. Of Sir Henry Parnell. Treatises of Mr. Wade. Of Mr. Poulett Scrope. Economy of Mamifactures, by Babbage. Philosophy of Manufactures, by Dr. Ure. Great popularity of political economy in England. . , . . . . , . . . . . 46/

CONTENTS. xxiii

Chapter XLI. Page

The social economists of the French school. New Principles of Political Ecotiomy, by M. de Sismondi. New Treatise on Social Econony, by M. Dunoyer. Christian Political Economy, by M. de Villeneuve-Bargemont. Treatise oft Legislation, by M. Ch. Comte. Political Economy, by M. Droz. ........ 484

Chapter XLII

Eclectic political economy and its principal representatives. M. Storch. M. Ganilh. M. de Laborde. M. Florez Estrada. . . 494

Chapter XLIII

Saint Simonian political economy. First writings of Saint Simon. Boldness of his attacks. Theory of his disciples. The Producteur. What they meant by Industrialism. They found a church. Their attacks upon inheritance. General view and estimate of their labors. . 507

Chapter XLIV

The Utopian economists. The Societary system of Fourier. Review of his principal works. Fundamental idea of his doctrine. Developments it appears susceptible of receiving. The social system of Mr. Owen. Unsuccessful attempts made by him at New-Lanark and at New-Harmony. Sketch of the views of that economist. . . . 520

Chapter XLV

General view of the systems in political economy. National characteristics of the various schools. Italian school. Spanish school. French school. English school. German school. . . . -534

Chapter XLVI

Economic complications resulting from the industrial affranchisement since 1789. Disadvantages of competition. Contradiction between facts and laws. Necessity of bringing them in harmony. Revolutions which have been brought about in commercial relations since the nineteenth century. Resulting modifications in political economy. . 549

AUTHOR'S INTRODUCTION.

It may perhaps be well to state here the motive which induced me to undertake this work. When called, about twelve years ago,* to the chair of History and Political Economy which I occupy to-day in the school of commerce, I was not long in perceiving that there existed between these two sciences relations so intimate that a person could not study the one without the other, nor thoroughly understand them separately. They lend each other constant support ; the first furnishes the facts ; the second explains their causes and deduces the consequences from them. As I advanced in the exposition of doctrines, examples were wanting; and the study of events was in its turn incomplete, until political economy cast its light upon them. Gradually, while combining the labors of my two courses and strengthening them by each other, I came upon a multitude of prejudices which passed for truths, even among the the best instructed and most advanced men. Thus, the authors of all the treatises on political economy, without exception, traced its origin no farther back than the first attempts of Quesnay and Turgot ; as if never, before the works of these celebrated men, had any systematic writing called the attention of savants and statesmen td the phenomena of the production of wealth.

*■■ The firsc edition was published in 1837.

xxvi AUTHOR'S INTRODUCTION.

From this time, I devoted myself earnestly to researches among the historians of all ages for the facts of most interest in the study of economic and social questions. I had soon found paupers at Rome and at Athens, as there are at Paris and at London ; and I must confess that privileges, taxes, and iiscal vexations were no more rare among the ancients than in our day. Then, as now, the least ray of peace and liberty was followed by a shower of riches and prosperity ; the same causes, in short, produced the same effects, notwithstanding the difference of customs and institutions. The distress of the people may always be recognized by the inequality of the burdens, the vicious distribution of the profits of labor, and the prevailing tendency of a few designing classes to place abuses under the protection of law.

But the world did not always remain indifferent, in the presence of these social calamities ; and more than once, in the course of the centuries, magnanimous protests were made in favor of the disregarded rights of humanity. A few noble sovereigns aided in these efforts, which were sometimes perseveringly followed up, at others interrupted by the misfortunes of the times. There was, then, a political economy among the ancients, as there is among the moderns ; not a systematic and formulated political economy, but one arising from facts, and practiced before being written. Such has been, moreover, the course of all sciences since the origin of society. The first comers conceive, act, execute ; the later ones reason, and improve and complete the work of their predecessors. To well appreciate the labors of modern economists, we must then become acquainted with the principal phases of the social movement which has been going on since the ancients, by means of revolutions, and which presents in its progress so many sudden and glorious enthusiasms and so many dramatic catastrophes.

It is this movement which I have attempted to trace in the work I ofTer to the public. The great states of author's introduction.

xxvu antiquity and those of the middle ages did not fail without a cause ; so great wealth was neither created nor destroyed without its creation or its annihilation being connected with causes susceptible of analysis and worthy of meditation. It is impossible not to recognize the finger of Providence in these successive transformations of the social principle, which takes refuge now in one institution, now in another, without distinction either of time or place, as if to hold itself continually at the disposition and service of humanity. Here, it is a great man who preserves the sacred fire ; in another place a slave rekindles it; Sokrates at Athens, Spartacus at Rome. From the very depths of barbarism issue the first rays of labor and of order; Charlemagne conquered the wave which had born him along ; the Hanse towns arose from the depths of marshes which served as a retreat for piracy.

The feudal system, so fatal to the laborers, who were enslaved to the land, is full of instruction valtiable to the political economist. It was the extreme division of sovereignty, as we to-day behold the extreme division of property. The Roman Empire, momentarily reconstructed by Charlemagne, had seen centralization carried to its last degree : the feudal system shows us that great political power reduced to atoms. On the one hand, we see gigantic syntheses ; on the other, almost microscopic analyses. What a difference must there not be between the poHtical economy of the chief of forty millions of subjects and that of a country squire looking down upon the country from the height of his castle keep ! But, from hatred of this castle, the bourgeois begin to settle down in cities, to organize themselves into brotherhoods, to make themselves respected by their numbers. Their money is no longer taken from them, it is borrowed from them ; and this apparently insignificant fact affords to the economist an explanation of an entirely new social order.

I have followed these great events step by step, and it has seemed to me that the political economy of the an-

XXVlll AUTHOR S INTRODUCTION.

cients had no other pretensions than that of the moderns. In all the revolutions, there have been but two parties confronting each other ; that of the people who wish to live by their own labor, and that of those who would live by the labor of others. These two classes dispute with each other the powers and the honors only in order to repose in that beatific region where the conquering party never lets the conquered sleep in tranquillity. Patricians and plebeians^ slaves and freemen, guelphs and gJiibellines, red roses and zv/iite roses, cavaliers and round heads, liberals and serviles, are only varieties of the same species. The question that divides them is always that of their well-being, each one wishing, if I may be permitted a common expression, to draw the coverlid over himself at the risk of uncovering his neighbor. So. in one country the fruit of his labor is taken from the workman by taxes, under pretence of the zvelfare of the state ; in another, by privileges, declaring labor a royal concession, and making one pay dearly for the right to devote himself to it. The same abuse is reproduced under forms more indirect, but not less oppressive, when, by means of custom-duties, the state shares with the privileged industries the benefits of the taxes imposed on non-privileged classes.

See the Romans in their conquered countries and the Spanish in their American colonies : more than a thousand years apart, you find the same contempt for human life, the same abominable paradoxes on the necessity of some being worked for the profit of others. This is more distressing than what happens among animals, where the devouring species live on the devoured without at least erecting their voracity into a system, and because they cannot do otherwise. All these horrible social iniquities have been propagated for ages, under various forms, sometimes tempered by the progress of human reason, but always alive at the bottom, and everywhere sustained, sometimes with audacity, sometimes with hypocrisy. At one time, it is the clergy who seize all the author's introduction.

XXIX property and deign to give alms to the dispossessed human race, threatening with anathema whoever dare trouble the repose of the house of God. Farther on, the tithe belongs to the lords, because they are lords, and because there are no lords without tithes. Peasants are still sold in Russia,-'^ like agricultural implements, and the English aristocracy haggle with the poor Irish about a few -blades of straw and the scanty supply of potatoes which they share with the cattle.

It is not, then, so far as one may think from the Greek and Roman political economy, cruel, insatiable, inexora;ble, to the political economy of more than one country in Europe. In our beautiful France, so rich in vines and harvests, several millions of men eat no bread, and drink only water. Salt abounds under their feet, but the tax weighs on their heads, and the gabelleiir, the odious taxgatherer of the middle ages, has only changed his name and dress. If one discovers a new plant, tobacco, for example, the law will forbid its cultivation. We may well exclaim with Rousseau : " Everything is good when it comes from the hand of the Creator : everything degenerates in the hand of man." Those poor girls of Lyons whose fairy fingers weave satin and poplin, have no chemises ; the canuts who decorate with their magnificent tapestry our palaces and our temples, are often without sabots.

No, this is not the final word of Providence, for of those who formerly would have been bound, strugglinofor breath, to the soil, not a few live to-day in the bosom of opulence, and this number is constantly increasino-. There is not an important event of history which does not concur in this great result. After the crusades, land begins to be divided; maritime commerce opens new sources of profit; the arts and manufactures emancipate thousands of vassals. Listen to to the sad complaints of the people: what do they ask, when they raise their

* All this is now fortunately changed, though the spirit of tyranny still lingers as recent events (May, 1879) testify. Ireland, too, breathes a freer air than when Blanqui wrote.

XXX AUTHOR'S INTRODUCTION.

voices? Reductions of the taxes. What wished those wild peasants of the Jacquerie^''' weary of seeing themselves decimated by famine, by leprosy, and by despair? A more equitable distribution of the profits of labor. They were still more modest ; they asked people who did not work, to at least let them live from the humblest part of the fruit of their toil. The first who had that audacity perished under torture, as might have happened at Rome if any slave had dared to ask the least right of his master.

Thus appear to the economist all the struggles whose sanguinary details fill the pages of history. It would be a great error to suppose that the truly religious thought of the general welfare passed unperceived through these two thousand years of wars and continued efforts for its triumph. We shall see in the course of this work, that more than once the cloud which hid it from the eyes of people, was dispelled for the best governments, charged with the destinies of civilization. Most of these were obliged to act in an empirical manner, and without proclaiming their projects, for fear of causing them to fail : others obeyed, without suspecting it, the law of progress, which led them on in spite of themselves : but never has there been a complete dearth of courageous men to accelerate this great work ; and I have been more than once surprised, in taking a survey of history, at the boldness and clearness of their views.

The Capitularies of Charlemagne, the Institutions of Saint Louis, the maxims of the commercial government of the Italian republics, are all full of clear and definite provisions, having for their aim the development of public wealth, according to the intelligence and the prejudices of the times, to be sure, but with the most generous and lofty intentions. In private and public assemblies which discussed affairs, remarkable opinions were often

* An insurrection of the peasantry, which broke out in 1358, when the French king was prisoner in England and the country was in a state of anarchy. The peasants burned castles, murdered noblemen and committed other outrages, doing, they said, as had been done to them. — 7'rans.

AUTHOR S INTRODUCTION. xxxi

enunciated ; I have had occasion to quote very curious fragments of these scientific opinions. If these productions are no longer known, it is because, down to our time, readers have preferred the narration of facts to a strict analysis of the causes which brought them about. Besides, these writings, examined separately, do not seem of great importance ; it is only when compared with each other and studied methodically, that they truly represent the links of a chain of economic doctrines adopted by governments at each memorable epoch, as a rule of conduct. Sometimes, when after long discords, the two principles of exploitation and of liberty seem near succumbing before each other, and make, so to speak, a final summation, the social problem appears in all its simplicity, just as our fathers laid it down on the famous night of August 4, 1789; as the insurgent communes of Spain had already submitted it to Charles V by Padilla ; * as, in short, it tends to become formulated before the Commons of England since the reform of 1832. All the theories of political economy, then, may be reduced to short maxims which clearly sum it up in the view of the people : freedom to work : freedom to have the profits of one's labor. The protestant reformation, the insurrection in the Netherlands against Philip II, the independence of the colonies of North and South America, the civil wars and the foreign wars, are only symptoms of this irresistible movement which bears humanity along. I have thought it better to point out carefully its principal economic phases, than to neglect entirely European history and make a science as ancient as society commence almost with our century.

Such a course would have been prescribed me by a simple feeling of justice, even if the nature of my subject had not made it a duty. It is an error to believe that, even if we take no account of the systems attempted by governments, political economy dates simply from the * See Chap. xxi.

xxxii author's introduction.

second half of the i8th century. More than two hundred years before, Italy had very remarkable treatises on a multitude of special subjects which depend upon it. The republics of Venice, Genoa, and Florence, knew too well how riches are multiplied, not to have left good examples to follow and good books to consult. Several accounts rendered by their doges and their podestats might be placed on a par with the most complete messages of American presidents. I have quoted * a discourse of the doge Moncenigo marked by the most judicious economic maxims, and a budget of Florence, more clear and more circumstantial in its brevity than are ours with their indecipherable columns. And the system of Law, which our authors affect to reject in the heroic times of political economy, what was it, pray, if not the uncertain dawn of public and private credit as developed in our day? What! Should the fine financial reforms of Sully, the bold attempts of Colbert, the famous Navigation Act of the English, as well as the revolution effected by the crusades, the vast operations of the Jews, and the monetary convulsion which followed the discovery of the New-World, pass unheeded!

If the study of the causes which have retarded or developed the progress of public wealth were nothing but a simple affair of arithmetic, it would not perhaps be necessary to go back so far ; I could have counted for nothing the advent of Christianity and have limited myself to a simple recital of the fine dissertations of the economists on value and utility. But because I think I have seen in political economy a science truly social, rather than a theory of finance, I have wished to show, as far as the vison of man can extend, the providential thread which guides nations in the accomplishment of their destiny. I firmly believe that some day there will be no more pariahs at the banquet of life, and I find the source of that hope in the study of history, which shows

* Chap. XX.

AUTHOR S INTRODUCTION. xxxiil

US the generations marching from conquest to conquest in the career of civilization. By the progress that has been made, I judge of that yet to be ; and when I see labor, extricat&d from the Roman galleys, take refuge in feudal servitude, then organize into corporations and fly across the seas on the wings of commerce, to rest at length in the shadow of political liberty, I feel that there is in economic science something besides a question of words, and I trust I shall be pardoned for having sketched in bold outlines the history of its progress through nations and ages.*

The first volume contains such an exposition from the time of the ancients to the ministry of Colbert. More than once, in tracing it, I have experienced regret for having circumscribed my subject within the limits which I had imposed upon myself. The materials which I had at hand were immense in quantity, for the most part unpublished, though extracted from works well-known. A simple list of them arranged in order would alone form an economic monograph extremely curious ; and more than one well-informed reader would be very much; astonished to find, in these too long-neglected documents,. an inexhaustible mine for study and meditation. Such facts are not what we ordinarily look for among historians, and most of the latter have at all times so well understood the indifference of the public to facts of this kind,, that they have been very quiet about them, and feared so much to burden their annals with them, that we are obliged to obtain them mostly by induction. Armies and courts occupy the foreground ; the human species, that which neither kills nor pillages, hardly figures even in thebackground, and that at a distance so obscure that one scarcely knows what became of it for thirty centuries.

The writers on political economy must be excused for having shared in that respect the general indifference, or,, if one prefers, the general ingratitude. They almost all

* In the French editions, the work is divided into two volumes. — Trans,

^XXIV AUTHOR S INTRODUCTION.

date from the eighteenth century, because it was then, for the first time, that humanity really asked for its accounts and laid out in clear terms the programme of the future. But, in truth, that science did not spring fully armed from the brain of the economists during that century. In proof, I should wish but their gropings, their disputes, and their unfortunate attempts. It was reserved for their successors of the English school to lay the true foundations of the economic edifice and to prepare the way for the reform which is to be accomplished in our day. The history of that period, so rich in productions forever celebrated in the annals of science, forms the second part of my book. It will be perceived what efforts I have had to make to keep from exceeding the limits necessary to the unity of my recital. I use this word intentionally, to justify myself in advance from a reproach which I fear to have incurred from some exacting minds. I had two routes to take : I could follow the beaten track, develop the preliminary discourses of J. B. Say, M. de Sismondi, and Mr. McCulloch on the course of political economy since Quesnay, adding a few words of politeness for the preceding centuries, or I could go further back, and connect political economy with general history, noting their reciprocal influence from the ancients to our day.