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Chapter Three The Paradox of the Physiocrats: State Building and Agrarian Capitalism in Eighteenth-Century France
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Agromania and Anglomania: The Discovery of English Agronomy and Political Economy

Throughout the eighteenth century the central contradiction of French absolutism remained unresolved: on the one hand, economic prosperity presupposed an agricultural revival which could break the recurrent cycle of inflation and depression; on the other hand, to meet the increasing costs of royal administration the state incessantly ground the agricultural producers beneath a growing burden of taxation. Consequently, the immediate fiscal policies of the state eroded the possibility of any lasting prosperity. Following the collapse of Law's system in 1720, the state debt had increased once again. The introduction of the cinquantième in 1725, a second dixième in 1733, and a vingtième in both 1749 and 1756 all failed to tap nobles' income to a degree adequate to overcome the long-term crisis of the absolutist state. The tax burden continued to fall on the rural producers. After a brief respite around midcentury, France found itself back in the midst of severe difficulties by the late 1750s. The French military suffered a humiliating defeat in the Seven Years' War. Under the impact of war, foreign trade slumped dramatically—from 25 percent of gross physical product in the years 1751–1755 to a mere 12 percent in 1758.[14] That same year, the payment of inscriptions was halted, and people were called on to bring in their silver and gold for minting.

It was in these circumstances that the intellectual movement known as the French Enlightenment reached its apex. The Enlightenment represented a movement by French intellectuals (from the clergy, the aristocracy, and the bourgeoisie), originating in the first quarter of the century, to elaborate economic and political solutions to the crisis of French society and the state. In formulating such theoretical solutions, they took their main inspiration from England. England, after all, appeared to offer a sharp contrast to the illness afflicting France. Yet however much England's political arrangements may have fascinated theorists like Voltaire and Montesquieu, it was her economic prosperity that French thinkers most envied. In their minds, there was little doubt as to the basis of that prosperity: it was, they believed, the superiority of English agriculture which under-


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pinned her wealth and power. Thus, in his influential Lettres d'un Français sur les Anglais, the abbé Le Blanc told his readers eager for a knowledge of England that

Whoever has eyes, must be struck with the beauties of the country, the care taken to improve lands, the richness of the pastures, the numerous flocks that 6cover them, and the air of plenty and cleanliness which reigns in the smallest villages.

The reason England enjoys such comfort and wealth, he claimed, has to do with the attitude towards agriculture of her ruling class:

What makes the English love planting more than we do, is that those who by birth or riches, are of the greatest distinction in the State, live in the country more than those of the same rank in France.... As the nobility sets the fashion to their inferiors, so the farmer plants in imitation of his landlord.[15]

It was through agricultural improvement that the English nobility had elevated their country, Le Blanc wrote; the French would do well to emulate them.

The year after the publication of Le Blanc's Lettres Montesquieu's Esprit des lois appeared. Public interest in problems of political economy is often said to date from the publication of this work. The year 1748 also saw the appearance of Dupin's Mémoires des blés . In 1750 Duhamel du Monceau popularized the methods and techniques of England's agricultural revolution with his Traité de la culture des terres, suivant des principes de M. Tull, Anglais . The following year the first volume of the Encyclopédie rolled off the press. The first economic article, written by Diderot himself, was entitled "Agriculture" and reflected an awareness of the growing discussion of the new husbandry. But it was Duhamel above all who stimulated discussion of problems of rural economy. For this reason, he has generally been considered to be the father of French agronomy.

Duhamel's treatise advanced a program for a complete reform of traditional husbandry: careful tillage and cultivation; saving of seed; maximization of output; scientific crop rotation and abandonment of the fallow system; use of artificial fodder; improvement of implements, harvesting, and storage.[16] His crusade struck a responsive chord. Five volumes of his work were published between 1751 and 1756, containing reports of practical results sent by Duhamel's correspondents and the author's comments upon them. The efforts of Duhamel and his enthusiasts inspired a growing agronomical move-


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ment. In 1757 the first agricultural society was founded in Rennes. During the next decade such societies were formed in every region of France. They published pamphlets, held contests, and experimented with new seeds, livestocks, implements, and techniques.

The French agronomes drew their exemplary models from England. Occasionally exiled British writers—particularly Jacobites from Scotland—contributed to the theoretical discussion of French agriculture. Such was the case with the English-born author Henry Patullo, whose Essai sur l'amélioration des terres was published in 1765. Patullo was linked closely with the Physiocrats and dedicated his work to Madame de Pompadour, patroness of the group. While focusing on the theory of rotative culture, Patullo also raised the central question of enclosure of land as integral to a program of agricultural improvement: "The practice of enclosing lands began long ago in England and is now nearly widespread there. It was felt that this advantage in itself would not fail to double the value of property."[17]

Beginning about 1760 and lasting some seventeen years, a definite movement developed towards clearing of lands, partitioning of commons, and enclosure. In 1761 a royal edict granted privileges to those who undertook to break up and reclaim land. Companies of capitalists formed by contract with the government to initiate such défrichements . In Lorraine, the chancellor, La Galaizière, grouped the tenures on his estates and partitioned the common lands on the seigneuries —allegedly with the consent of the inhabitants. These operations were registered by council in 1771. Indeed, Marc Bloch suggested that this registration resembled an English bill of enclosure.[18] The trend towards suspension of common rights and in the direction of enclosure picked up steam around the middle of the 1760s. In 1766 the Estates of Languedoc obtained a judgement from the Parlement of Toulouse against compulsory collective grazing through large parts of the province. Similar acts were passed by the Parlements of Rouen and Paris and the Council of Rousillon. During 1766 and 1767, a series of edicts granted freedom of enclosure in Lorraine, the Three Bishoprics, the Barrois, Hainault, Flanders, the Boulonnais, Champagne, Burgundy, Franche-Comté, Rousillon, Béarn, Bigorre, and Corsica.[19]

As significant as these developments were, moves towards enclosure remained confined to a minuscule percentage of estates. A full-scale agricultural revolution is more than a technical reorganiza-


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tion of farming (as we have noted in chapter 2); it involves a transformation of the social relations of agricultural production. The sophisticated scientific arguments of the agronomes ran headfirst into the real-life constraints that the social structure of eighteenth-century France imposed upon such transformation. In a very real sense, the agronomes had formulated a program for "primitive accumulation" of capital without taking into account the specific sociohistorical processes such a program presupposed. As André Bourde has noted, enclosure, consolidation of holdings, and extension of farms all implied "the conversion of the peasant proprietor into a paid agricultural labourer."[20]

An agrarian revolution of this character—a revolution not only of technique but, more important, of social relations of production—required more than enlightened propaganda. It would have required a transformation of the relation between the absolutist state and society. For, as we have demonstrated in chapter 2, the absolutist state safeguarded the social position of the peasantry. As a result, "customary rules were too well established and the perpetual character of the tenures presented too many obstacles, for the movement towards integration of plots to result in enclosure on a vast scale"[21] For this reason, those writers concerned with agricultural improvement were forced to confront the problem of the state and its relationship to social classes and the economy as a whole. Increasingly the recognition dawned that France's ailment was as much political as economic; that the structure of state and economy required radical reform if France were to follow the English road to wealth and power. For this reason, many of the agronomes were impelled from consideration of problems of rural economy to deliberation upon problems of political economy. Thus, with the discovery of English agronomy came the simultaneous discovery of English political economy.

The shift towards political economy was impelled also by the related debate over the grain trade. Throughout the eighteenth century, France maintained the traditional policy of provision, according to which government had the right—indeed, the duty—to direct, regulate, and control the production, transportation, marketing, price, and export of grain in order to avoid dearth and the inevitable social unrest which accompanied it. Under the terms of regulated trade, all dealers in grain had to register with the government; particular groups were prohibited from dealing in grain; and all grain


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purchases and sales had to be certified by the government. Yet regulation of the grain trade did not eliminate the recurring problem of poor harvests and rising prices, which were followed invariably by rising yields, falling prices, and economic crises for many producers.

Subsistence crises occurred in the Paris region in 1709, 1725–1726, 1738–1742, and 1765–1775.[22] Responding to the failure of regulation of the grain trade, a growing body of writing favoured a policy of economic liberalization—abolition of state regulation to allow free commerce in grain to increase prices and output to equilibrium levels which would ensure abundance of supply and reasonably high and stable prices for the agricultural producers. Central to these arguments was an approach to the grain trade which treated it like any other productive activity by focusing not principally upon the immediate interests of the consumers but rather upon the economic needs of the producers.

One of the most important liberal tracts on the grain trade was Claude-Jacques Herbert's Essai sur la police générale des grains (1753). The essay went through six editions in the four years after its publication and popularized many of the economic arguments for liberalization which came to the fore in the 1760s and 1770s. Central to Herbert's position was the view that human beings were motivated fundamentally by "personal interest" and that, if only grain were treated as an "object of commerce" like any other, its supply and its price would readily adjust themselves to the market—thereby stimulating production and eliminating the problem of scarcity. The price of bread would settle ultimately at a reasonable level, but not one so low as to discourage industry on the part of the poor. Herbert's views were echoed in part by Forbonnais, whose Eléments du commerce (1754) denounced regulation of the grain trade as "against the order of nature" and advocated a "just equilibrium" of the interests of the consumer and the producer rather than oppression of the latter to serve the former.[23]

The most difficult question for those advocating liberalization of the grain trade was the freedom to export grain. It followed logically that such freedom should be granted if the object was to expand the market for grain to maximize demand and, thereby, the incentive to produce. This, as we have seen, was Boisguilbert's position. But an unqualified right to export grain required accepting the view that even in cases of dearth or famine (which most economic liberalizers


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discounted as a serious possibility under conditions of free trade) the state would not intervene to assert the priority of subsistence over liberty of commerce—a position which required aggressively asserting the absolute freedom of markets regardless of the conditions of the poor. Yet this was precisely the position taken by the growing "liberty lobby" of the 1750s and 1760s, as well as that taken by the Physiocrats. Moreover, the government itself adopted this position for a time in the 1760s and again in the 1770s—before an aggressive campaign on behalf of traditional policy forced the government to retreat.[24]

Clearly, any attempt to move in the direction of a complete liberalization of the grain trade—and the radical break with traditional policy such a move implied—required the backing of a rigorous and persuasive argument designed to demonstrate the economic, social, and political superiority of markets over regulation. Any such argument had to be constructed, not at the level of special pleading, but in terms of a comprehensive analysis of the general or natural laws of economic life. Thus, as did the debate over enclosure and agricultural improvement, the debate over the grain trade moved in the direction of systematic discussion of political economy. Here again, French writers drew initially upon English economic thought.

The French encounter with English political economy dates also from about 1750. As we have noted above, interest in English political thought grew after the appearance of Montesquieu's Esprit des lois . In fact, as early as 1746 Dupré had introduced Locke's economic ideas in the Essay on Money . Vincent Gournay, who became intendant de commerce in 1751 and who decisively influenced Turgot (among other leading intellectuals), translated essays by Child and Gee, Interest of Money and Causes of the Decline of Commerce respectively. Throughout the early 1750s the economic writings of Locke, Petty, Child, Davenant, Tucker, and Hume became increasingly well known. Yet, as Weulerrse has argued, "more profound and more remarkable has been the influence of Cantillon."[25] The latter's Essai sur la nature du commerce en général appeared in 1755 (although it had been written perhaps twenty-five years earlier). Cantillon is the great link between seventeenth-century English political economy and the system of the Physiocrats. It is no overstatement to say that he constituted the direct connection between the writings of Petty and Quesnay. As Schumpeter wrote, "Few sequences in the history of


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economic analysis are so important for us to see, to understand, and to fix in our minds as is the sequence: Petty-Cantillon-Quesnay."[26]

Richard Cantillon (1697–1734) went to Paris in 1716 and traded there in wine, silk, and copper. He made his fortune, however, in banking, particularly during the period 1716–1720 when he is reported to have profited enormously through Law's system. By age twenty, Cantillon was a financial success. He returned to London in 1720 and lived there for six years, although he continued to travel widely. He was often in Paris between 1729 and 1733, during which period he appears to have written the Essai .[27]

Cantillon brought to political economy a unique combination of practical business experience, broad acquaintance with the literature of political economy (the Essai refers to Petty, Davenant, Locke, and Vauban, among others), and a consciously scientific approach to economic analysis (as Higgs pointed out, Cantillon sought to discern the "natural" or "inevitable sequence of effect upon cause" in economic phenomena). Numerous commentators have pointed out that Petty was the major theoretical influence upon Cantillon—upon his general concepts, conceptual framework, and mode of analysis. But although Petty's analysis may have constituted the starting point for many of Cantillon's reflections on economic problems, the Essai represented an important advance upon all previous works in political economy.[28]

The Essai opens with a modified statement of Petty's assertion that land is the mother of wealth and labour its father. "The Land," Cantillon writes, "is the Source or Matter from whence all Wealth is produced. The Labour of man is the Form which produced it." It is upon the surplus—or, as Cantillon calls it, the "overplus"—produced on the land that all nonagricultural professions subsist. Thus, "all the classes and inhabitants of a State live at the expense of the Proprietors of the Land." For this reason, only the landed proprietors can be said to be truly independent members of society; all others are dependent upon the surplus product of the proprietors' land and upon the latter's expenditure of the revenue they receive from ownership of land.[29]

The wealth of society is thus a function of the productivity of agricultural labour. The example of England has shown that agricultural prosperity requires well-to-do husbandmen who can organize and finance production on large farms. Cantillon's model assumes a pat-


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tern of capitalist farming in which the farmer is an "entrepreneur." In fact, he constructs his model upon the assumption that English-style capitalist farming is most advantageous:

when a Farmer has some capital to carry on the management of his Farm the Proprietor who lets him the Farm for a Third of the Produce will be sure of payment and will be better off by such a bargain than if he let his Land at a higher rate to a beggarly Farmer at the risk of losing all his Rent. The larger the Farm the better off the Farmer will be. This is seen in England where Farmers are generally more prosperous than in other countries where the farms are small.[30]

It is on the basis of such a model of large-scale capitalist farming that Cantillon elaborates a notion of the circular flow, which anticipates the main features of Quesnay's Tableau économique . The farmer, he states, produce "three Rents": one goes to the proprietor as payment for the use of land; one covers the costs of agricultural production (including the farmer's subsistence); and one constitutes the profit of the farmer. These three rents are "the mainspring of the circulation of the state." Landlords reside in the towns and spend all their income there; farmers spend one-quarter of their two rents (or one-sixth of the total agricultural output) on urban manufactures. As a result of these expenditures, one-half of the population is able to live in the cities subsisting on the half of the agricultural product (one-third plus one-sixth) spent there. The specific character of the "dependent" professions which subsist upon the expenditure of the agricultural output is determined in large measure by the "Fancy, Methods, and Fashions of life of the Proprietors of the Land in especial."[31] As we shall see below, the basic elements of Quesnay's Tableau are here sketched by Cantillon.

Within the general context of this vision of an agrarian-based circular flow of wealth, Cantillon takes up the problem of value. Here the influence of Petty is most apparent. Following Petty, Cantillon distinguishes between the "market price" of a good (which is determined by the interplay of supply and demand) and its "intrinsic value." On the assumption that "in well-ordered societies the market prices of produce and commodities whose consumption is fairly constant and uniform do not deviate much from the intrinsic value," Cantillon proceeds to investigate intrinsic value.[32] Again, he poses the problem precisely as it had been posed by Petty: "the Price or intrinsic value of a thing is the measure of the quantity of Land and


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Labour entering into its production, having regard to the fertility or produce of the Land and to the quality of the Labour."[33] Cantillon, like Petty, recognizes that such a dualistic theory of value is theoretically unsatisfactory. He undertakes, therefore, the search for a "par or relation between the value of land and the value of labour." Here he acknowledges Petty's priority in the formulation of this problem but he rejects the latter's "solution":

Sir Wm. Petty, in a little manuscript of the year 1685 [the Political Anatomy of Ireland, published in 1691], considers this Par, or Equation between Land and Labour, as the most important consideration in Political Arithmetic, but the research which he has made into it in passing is fanciful and remote from natural laws, because he has attached himself not to causes and principles, but only to effects, as Mr. Locke, Mr. Davenant and all the other English authors who have written on this subject have done after him.[34]

Cantillon attempts to solve this equation between land and labour by expressing labour in terms of land. The value of labour, he claims, is equal to the amount of land necessary for the subsistence of the labourer and two children (assuming that one of the children will die, the usual rate of child mortality, and that the wife manages just to reproduce the value of her own costs of subsistence). What this requires, therefore, is that "the Labour of a free Labourer ... correspond in value to double the produce of Land needed for his maintenance."[35] Thus, since the value of labour is determined by the amount of land necessary to its reproduction, the amount of land and labour entering into the production of a good can be measured by one member of this value-determining pair—land:

The intrinsic value of any thing may be measured by the quantity of Land used in its production and the quantity of Labour which enters into it, in other words by the quantity of Land of which the produce is allotted to those who have worked upon it.[36]

This analysis comes close to a "corn-model" solution, by defining the value of labour in terms of a single subsistence unit of landed production. Whether this resolution of Petty's problem represents a significant advance upon its originator's efforts is open to question. Certainly in The Political Anatomy of Ireland, the very work Cantillon referred to, Petty comes remarkably close to this solution. Whatever the final judgement of this matter, there can be little doubt that with the appearance of Cantillon's Essai in 1755 many of the essential ele-


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ments of the physiocratic system were ready, awaiting merely the grand architectural efforts of François Quesnay. It may be an exaggeration to say, as did Higgs, that "Cantillon is certainly the Father of Physiocracy";[37] it is nonetheless the case that advocacy of capitalist farming along English lines, definition of the agricultural surplus as the basis of circulation of the aggregate social product, and a tableau économique which defines the circular flow of wealth between the different economic classes in society are all to be found in his Essai . François Quesnay had only to add the ingredient of his own distinctive genius to produce the theoretical system of Physiocracy.


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Chapter Three The Paradox of the Physiocrats: State Building and Agrarian Capitalism in Eighteenth-Century France
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