Jean-Baptiste Say

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Jean-Baptiste Say
Jean-baptiste Say.jpg
Born(1767-01-05)5 January 1767
Died15 November 1832(1832-11-15) (aged 65)
NationalityFrench
FieldPolitical economy
School or
tradition
Classical liberalism
InfluencesRichard Cantillon, Adam Smith, Pietro Verri
ContributionsSay's law

Jean-Baptiste Say (French: [ʒãbatist sɛ]; 5 January 1767 – 15 November 1832) was a French economist and businessman who had classically liberal views and argued in favor of competition, free trade and lifting restraints on business. He is best known for Say's law, also known as the law of markets, which he popularized. Scholars disagree on the surprisingly subtle question of whether it was Say who first stated what is now called Say's law.[1][2]

Biography[edit]

Map of Croydon, drawn by the 18-year-old Say in 1785

Say was born in Lyon. His father Jean-Etienne Say was born to a Protestant family, which had moved from Nîmes to Geneva for some time in consequence of the revocation of the Edict of Nantes. Say was intended to follow a commercial career and in 1785 was sent with his brother Horace to complete his education in England. He lodged for a time in Croydon and afterwards (following a return visit to France) in Fulham. During the latter period, he was employed successively by two London-based firms of sugar merchants, James Baillie & Co and Samuel and William Hibbert.[3][4] At the end of 1786, he accompanied Samuel Hibbert on a voyage to France which ended in December with Hibbert's death in Nantes. Say returned to Paris, where he found employment in the office of a life assurance company directed by Étienne Clavière. His brother Louis Auguste (1774–1840) also became an economist.

Say's first literary attempt was a pamphlet on the liberty of the press, published in 1789. He later worked under Mirabeau on the Courrier de Provence. In 1792, he took part as a volunteer in the campaign of Champagne. In 1793, he assumed in keeping with French Revolutionary fashion the pseudonym Atticus and became secretary to Clavière, then finance minister.

In 1793, Say married Mlle Deloche, daughter of a former lawyer. From 1794 to 1800, he edited a periodical, entitled La Decade philosophique, litteraire, et politique, in which he expounded the doctrines of Adam Smith. He had by this time established his reputation as a publicist and when the consular government was established in 1799 he was selected as one of the 100 members of the Tribunat, resigning the editorship of the Decade. In 1800, Say published Olbie, ou essai sur les moyens de réformer les mœurs d'une nation. In 1803, he published his principal work, the Traité d'économie politique ou simple exposition de la manière dont se forment, se distribuent et se composent les richesses. Having proved unwilling to compromise his convictions in the interests of Napoleon, Say was removed from the office of tribune in 1804. He turned to industrial activities and after having familiarised himself with the processes of cotton manufacture he established a spinning-mill at Auchy-lès-Hesdin in the Pas de Calais, which employed some 400–500 people, mainly women and children. He devoted his leisure time to revising his economic treatise, which had been out of print for some time, but the system of state censorship in place prevented him from republishing it. In 1814, Say "availed himself" (to use his own words) of the relative liberty arising from the entrance of the allied powers into France to bring out a second edition of the work dedicated to the emperor Alexander I of Russia, who had professed himself his pupil. In the same year, the French government sent him to study the economic condition of the United Kingdom. The results of his observations appeared in a tract, De l'Angleterre et des Anglais.

Say's tomb in the Père Lachaise Cemetery in Paris, France

A third edition of the Traité appeared in 1817. A chair of industrial economy was established for him in 1819 at the Conservatoire des Arts et Métiers. Also in 1819, he was one of the founders of the École spéciale de commerce et d'industrie, which became the first business school in the world.[5] In 1831, he was made professor of political economy at the Collège de France. In 1828–1830, he published his Cours complet d'economie politique pratique. In 1826, he was elected a foreign member of the Royal Swedish Academy of Sciences. In his later years, Say became subject to attacks of nervous apoplexy. He lost his wife in January 1830 and from that time his health constantly declined. When the revolution of that year broke out, he was named a member of the council-general of the department of the Seine, but found it necessary to resign.

On 15 November 1832, Say died in Paris and was buried in the Père Lachaise Cemetery.

Say's law[edit]

Say is well known for Say's law, or the law of markets, often controversially summarised as such:

Say's law is instead uncontroversially summarized as such:

  • "Supply constitutes its own demand"
  • "Inherent in supply is the wherewithal for its own consumption" (direct translation from French Traité d'économie politique)

The exact phrase "supply creates its own demand" was coined by John Maynard Keynes, who criticized it as in the former two, equating all four of these statements to mean the same thing. Some economists, including some advocates of Say's law who dispute this characterization as a misrepresentation,[6] have disputed his interpretation, claiming that Say's law can actually be summarized more accurately as "production precedes consumption" and that Say was claiming that in order to consume one must produce something of value so that one can trade this (either in the form of money or barter) in order to consume later.[7]

Similar sentiments through different wordings appear in the work of John Stuart Mill (1848) and his father James Mill (1808). The Scottish classical economist James Mill restates Say's law in 1808, writing that "production of commodities creates, and is the one and universal cause which creates a market for the commodities produced".[8]

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, pp. 178–179). Explaining his point at length, he wrote the following:[9]

It is worthwhile 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.[10]

Say also wrote that it is not the abundance of money, but the abundance of other products in general that facilitates sales:[11]

Money performs but a momentary function in this double exchange; and when the transaction is finally closed, it will always be found, that one kind of commodity has been exchanged for another.

Say's law may also have been culled from Ecclesiastes 5:11 – "When goods increase, they are increased that eat them: and what good is there to the owners thereof, saving the beholding of them with their eyes?" (KJV). Say's law has been considered by John Kenneth Galbraith as "the most distinguished example of the stability of economic ideas, including when they are wrong".[12]

Quotes[edit]

Title page of Say's Lettres à M. Malthus, sur différens sujets d'économie politique, published in 1820
On taxes
On property rights

References[edit]

  1. ^ Thweatt, William O. "Early Formulators of Say's Law". In Wood, John Cunningham (editor); Kates, Steven (editor) (2000). Jean-Baptiste Say: Critical Assessments. V. London: Routledge. pp. 78–93.CS1 maint: Extra text: authors list (link)
  2. ^ Braudel, Fernand (1979). The Wheels of Commerce: Civilisation and Capitalism 15th–18th Century. p. 181.
  3. ^ Lancaster, Brian (March 2012), "Jean-Baptiste Say's 1785 Croydon street plan", Croydon Natural History & Scientific Society Bulletin, 144: 2–5
  4. ^ Lancaster, Brian (2015). "Jean-Baptiste Say's First Visit to England (1785/6)". History of European Ideas. 41 (7): 922–930.
  5. ^ Kaplan, Andreas (2014). "European management and European business schools: Insights from the history of business schools". European Management Journal. 32 (4): 529–534. doi:10.1016/j.emj.2014.03.006.
  6. ^ (Clower 2004, p. 92)
  7. ^ Bylund, Per. "Say's Law (the Law of Markets)".
  8. ^ Mill, James (1808). Commerce Defended. "Chapter VI: Consumption". p. 81.
  9. ^ "Information on Jean-Baptiste Say". Archived 26 March 2009 at the Wayback Machine
  10. ^ Say, Jean-Baptiste (1803). A Treatise on Political Economy. pp. 138–139.
  11. ^ Say, Jean-Baptiste (1803). A Treatise on Political Economy. Translated from the fourth edition of the French in 2001. Batoche Books Kitchener. p. 57.
  12. ^ Galbraith, John Kenneth (1975), Money: Whence It Came, Where It Went, Boston: Houghton Mifflin, ISBN 0-395-19843-7.

Further reading[edit]

External links[edit]