Economics barely existed, as a discipline, when Diderot, et. al, created the Encyclopedie, and just as today in any good reference work you’d find Keynesians and corporate-mercantilists and free-racketeers (I mean free-marketers) waging warfare by definition, here already, at the dawn of a discipline, you find quite a diversity of opinion on economic questions. As one of the Encylclopedie‘s translators notes:
[T]he neomercantilist Forbonnais and the physiocrat Quesnay differ sharply on the function of commerce in the state, Saint-Lambert defends luxury and finds it beneficial to the commonweal, while Jaucourt and other contributors condemn it for its harmful effects, and differences of opinion characterize the discussions on tax policy and other economic subjects.
OK. So. The physiocrats, apparently, were the guys who thought that a country’s land was essentially its only wealth. The neomercantilists believed in a strong central government, lots of exports, as few imports as you can manage: basically, get a big stackful of another country’s money and keep it in a central bank. What’s really at stake in this debate was whose wealth economics would be concerned with. Is a country rich because the king is? Or because it has abundant natural resources? The mercantilists favored one explanation, and the physiocrats the other.
A mercantilist named Forbonnais managed to wangle himself a shot at writing the entry for Commerce, and this is the result:
Infinite Providence, the creator of nature, intended to make men dependent on each other through the diversity of this nature. The Supreme Being forged the bonds of commerce in order to incline the peoples of the earth to keep peace with each other and to love each other, and in order to gather to himself the tribute of their praise; and He revealed His love and His greatness by giving them knowledge of the marvels with which He had filled the universe. Thus human intentions and passions enter into the unalterable order of eternal decrees.
Not exactly the bareknuckle competition that modern economics assumes. And given that neomercantilism, from the summaries I’ve read, seems like little more than a form of intellectual sucking-up to the king (Oh, your Majesty, we’re only wealthy if you are!), Forbonnais’s assumptions about early economic history are also kind of unexpected:
In the earliest times trade took the form of barter. This means that a certain quantity of one commodity was held to be the equivalent of a certain quantity of another. All men were equal and each one produced by his work the equivalent of the help he expected from others. During those years of innocence and peace men thought less about fixing the value of the goods of exchange, than about helping each other.
That’s a downright Occupational anthropology right there.
Unfortunately, men waxed great upon the earth, like Nimrod:
Before and after the Flood exchange must have increased together with the population. Then the abundance or scarcity of certain products, whether produced by art or by nature, increased or reduced the equivalent needed for them. Barter thus became difficult. … Because of the unequal distribution of property by division among children, as well as differences in terrain, in strength, and in industriousness, some men found themselves with a greater surplus than others. Those who needed this surplus had to pay for it either by means of work or by inventing new commodities. Yet the use of this surplus remained limited as long as men were content with the simple things in life.
I’m not sure if I’ve correctly implied the connection between this paragraph and the next. If I understand Forbonnais correctly, surpluses (which arise from differences in natural resources, ability, etc.) start to break up the primal anarchy, but only a little. Then he writes, “From injustice arose the need for legislators. Trust created judges, respect made them stand out above others, and soon fear separated them from their fellow men. Pomp and circumstance formed one of the prerogatives of these powerful men; whatever was scarce was reserved for their use and luxury appeared.” I assume this “injustice” arose from the existence of surplus (if I have lots of figs, I can monopolize), but it sounds like for him the existence of mechanisms to check this injustice led to further injustice. After which, “[t]hose who were inferior made luxury the object of their ambition, for men like to outshine each other. Greed stimulated industry; men traveled far and wide or used their powers of invention in order to obtain a few unnecessary goods. Thus, extreme inequality among men extended even to their needs.”
He then gives a potted economic history: the luxurious Asians; the invention of carry-trade by the sailin’ Phoenicians who also established colonies in Greece, Spain, and even Thule (“which is generally believed to be Iceland”); Babylon, which sacked the Phoenicians’ greatest city and forced them to move all the good stuff to Carthage; the Greeks, who got rich through guts and elbow grease.
Rome got rich the same way the Godfather did:
“But the mistress of the world scorned to gain riches in any other way except by the tributes she exacted from the conquered nations. She was satisfied to foster the commerce of those nations that engaged in it under her protection.”
Protection. Uh-huh.
After the fall of the Empire, sailing plays an important point in reviving commerce: the Phoenicians had had a good idea. “Venice, Genoa, Pisa, Florence vied for dominion of the seas and for supremacy in manufacture. For a long time they competed in carrying on trade with Morea, the Levant, the Black Sea, and, by way of Alexandria, with India and Arabia.” This in turn enriches Flanders, which becomes the place where Italian sailors store their shit during long, multi-part journeys (because otherwise PIRATES!). But then poor political decisionmaking drives the manufacturers out of Flanders in the fourteenth century, whereupon a lot of them jump to Great Britain, which is why that tiny little nation became this huge manufacturing power and also, not incidentally, the birthplace of many of the major eighteenth- and nineteenth-century economists (most of whom were snobs, jerks, and grinders of the faces of the poor).
There’s lots of other stuff in that section about the Dutch and whatnot, but my attention is officially flagging. The fifth great age of commerce, in Forbonnais’s reckoning of things, starts with colonialism, which he describes as a nice, chaste little enterprise where you enrich the mother country by getting natural resources from elsewhere while guaranteeing a captive marketplace for the mo. country’s wares. Nothing about extirpation of natives at all, though lots about the Spanish, Portuguese, Dutch, etc. extirpating each other from India, America, and other places that weren’t theirs. Forbonnais berates his countrymen for missing out on the scramble for colonies: “Yet France, divided against herself by religious wars, remained insensible to any other feeling than that of its own suffering.”
After this, Forbonnais wraps it up with some bullet points:
The history of commerce presents us with three important reflections:
1. We have seen nations make up through industry for the lack of agricultural products and thus possess more conventional wealth than those with natural wealth. However, this has always been achieved by distributing to every country the natural wealth it lacked. On the other hand, no nation has been able without industry to possess an abundance of gold and silver, which constitute conventional wealth.
In other words, industry is more important than agriculture. Suck it, Physiocrats!
2. A nation that does not engage in commerce to its full capacity faces a gradual commercial decline. Every branch of commerce supposes the existence of a need, whether real or conventional; profit from such commerce provides the means for engaging in a new enterprise; and nothing is as dangerous as to force other nations to provide for their needs themselves, or to find a substitute for these needs. …
In other words, the balance of trade should be on your side, not theirs.
3. A large population follows inseparably upon an extensive commerce, since its transactions are always characterized by great wealth. It is well known that the comforts of life are the most powerful lure for men. If we imagine a trading nation surrounded by nations that do not engage in commerce, we shall find that the former will soon have attracted all the foreigners for whom its commerce can provide work and wages.
He continues: “Thus, there is a useful and a useless type of commerce. We shall see the truth of this if we distinguish the merchant’s gain from the gain of the state. If a merchant imports foreign merchandise that reduces the consumption of domestically manufactured goods, he himself will profit from the sale of this merchandise, but the state will lose: (1) the cost of the purchase abroad; (2) the wages that the use of domestically manufactured goods would have provided for various workmen; (3) the value the raw material would have yielded if grown on the land of the nation or its colonies; (4) the benefit from the circulation of all these sums, that is to say, the prosperity in which other subjects would have shared; (5) the income the prince has a right to expect from the prosperity of his subjects. … On the other hand, it can happen that the merchant loses while the state gains. If a trader rashly sends merchandise from his country into another where it does not command a ready market, he may lose on the sale. The state, however, will still gain the sum paid by the foreign buyer, as well as the money paid to the landowner for the raw materials, the wages of the workers who manufactured the merchandise, the cost of shipping if the export took place by sea, the benefit of having money circulate, and the tax that public affluence owes to the nation. The profit the merchant makes on his dealings with the other subjects is of no concern to the state since it does not share in it. On the other hand, such profit does concern the state if it increases the indebtedness of foreigners and furthers other enterprises from which the nation stands to gain.”
So, clearly, after what feels like a pretty neutral beginning, this entry does start to grind its ideological axe. Interestingly, though his economic ideology is implicitly nationalist (France’s wealth is only the French sovereign’s wealth), he talks about how the English are the world’s best economic theorists. Similar to how Voltaire considers both Pascal and Newton’s metaphysics and clearly prefers the latter.
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