WEBVTT NOTE 9. The Liberal Reaction Against Mercantilism in Seventeenth Century France (continuted) 1 00:00:00.000 --> 00:00:06.920 7. Flourie, Fenelon, and the Burgundy Circle 2 00:00:06.920 --> 00:00:17.040 During the early 1670s, the devout Abbé Claude Flourie, 1640-1723, a young theologian, moralist 3 00:00:17.040 --> 00:00:23.520 and man of letters, launched an influential opposition to the absolutism and mercantilism 4 00:00:23.520 --> 00:00:25.880 of Louis XIV. 5 00:00:25.880 --> 00:00:32.800 In a small pamphlet, Pensée Politique, Fleury upheld the agrarian ideal and opposed the 6 00:00:32.800 --> 00:00:36.800 mercantilist forced subsidization of industry. 7 00:00:36.800 --> 00:00:43.560 Furthermore, in a companion work, Reflections on the Works of Machiavelli, Fleury attacked 8 00:00:43.560 --> 00:00:50.020 Montaigne-type skepticism, which resulted in endorsing an unrestrained exercise of power 9 00:00:50.020 --> 00:00:55.400 over depraved men who were virtually devoid of reason. 10 00:00:55.400 --> 00:01:01.720 He also denounced Machiavelli's view that politics should be divorced from ethics. 11 00:01:01.720 --> 00:01:07.720 Combining the latter themes, Fleury contended that man can use reason to take the path of 12 00:01:07.720 --> 00:01:14.580 justice and virtue, while Machiavelli's prince was a godless tyrant who had no desire to 13 00:01:14.580 --> 00:01:17.840 lead his subjects to happiness. 14 00:01:17.840 --> 00:01:24.200 In contrast to Machiavelli's view that men are bad, Fleury countered sensibly that they 15 00:01:24.200 --> 00:01:29.800 They are for the most part neither very bad nor very good, and that the ruler had the 16 00:01:29.800 --> 00:01:33.980 duty to improve their virtue and happiness. 17 00:01:33.980 --> 00:01:40.800 The outstanding clerical opponent of absolutism and mercantilism in late 17th century France, 18 00:01:40.800 --> 00:01:48.840 however, was not so much Fleury as his friend and student, François de Salignac de la Motte, 19 00:01:48.840 --> 00:01:59.560 Archbishop Fenelon of Cambrai, 1651-1715 Fenelon led a powerful cabal at court who 20 00:01:59.560 --> 00:02:05.880 were deeply opposed to the absolutist and mercantilist policies of the king and determined 21 00:02:05.880 --> 00:02:12.720 to reform them in the direction of free trade, limited government and laissez-faire. 22 00:02:12.720 --> 00:02:19.200 By means of his post as religious instructor to the king's mistress, Madame de Matinon, 23 00:02:19.200 --> 00:02:26.240 Fénelon got himself appointed in 1689 as preceptor to the royal children, in particular 24 00:02:26.240 --> 00:02:34.600 the young Duke of Burgundy, grandson of Louis XIV, who seemed destined one day to be king. 25 00:02:34.600 --> 00:02:40.720 Assisted by Fleury, Fénelon made the duke into a disciple, surrounding him with ardent 26 00:02:40.720 --> 00:02:52.600 In 1693, Fenelon, incensed at the continuing wars against the English and Dutch, wrote 27 00:02:52.600 --> 00:02:58.300 the King an impassioned and hard-hitting, though anonymous, letter, which he probably 28 00:02:58.300 --> 00:03:01.920 sent only to Madame de Matinon. 29 00:03:01.920 --> 00:03:05.520 Blaming the King's evil ministers, he declared, 30 00:03:05.520 --> 00:03:11.980 Sire, for the past thirty years your ministers have violated and overturned all the ancient 31 00:03:11.980 --> 00:03:19.020 maxims of state in order to raise your power, which was theirs because it was in their hands 32 00:03:19.020 --> 00:03:21.900 to the highest possible point. 33 00:03:21.900 --> 00:03:25.760 We no longer heard of the state nor of its rules. 34 00:03:25.760 --> 00:03:30.000 They only spoke of the king and his pleasure. 35 00:03:30.000 --> 00:03:34.560 They have increased your revenues and your expenditures to the infinite. 36 00:03:34.560 --> 00:03:40.640 They have elevated you to the heavens and impoverished all of France so as to introduce 37 00:03:40.640 --> 00:03:46.340 and maintain an incurable and monstrous luxury at court. 38 00:03:46.340 --> 00:03:52.360 They wanted to raise you on the ruins of all classes in the state, as if you could become 39 00:03:52.360 --> 00:03:56.440 great by oppressing your subjects. 40 00:03:56.440 --> 00:04:02.800 The king's ministers, Fenelon continued, only wish to crush all who resist. 41 00:04:02.800 --> 00:04:10.040 They have made the king's name odious, have wanted only slaves, and have caused bloody wars. 42 00:04:10.040 --> 00:04:16.120 The wars and their attendant taxes have crushed trade and the poor, driving the people to 43 00:04:16.120 --> 00:04:22.360 desperation by exacting from them for your wars the bread which they have endeavored to 44 00:04:22.360 --> 00:04:26.280 earn with the sweat from their brows. 45 00:04:26.280 --> 00:04:32.440 Fennelon's magnum opus was his political novel Teremach, written for the edification of the 46 00:04:32.440 --> 00:04:38.560 The Young Duke of Burgundy, on whom he and his confrères pinned all the hopes for the 47 00:04:38.560 --> 00:04:42.000 radical liberalization of France. 48 00:04:42.000 --> 00:04:51.680 Télémaque was written during 1695 and 1696 and published without his permission in 1699. 49 00:04:51.680 --> 00:04:57.080 Télémaque was a mythical young prince who traveled through the world of antiquity seeking 50 00:04:57.080 --> 00:05:01.200 instruction on the wisest forms of government. 51 00:05:01.200 --> 00:05:05.840 What Telemach learned were the lessons of pure laissez-faire. 52 00:05:05.840 --> 00:05:12.240 For example, young Telemach asked Mentor, a wise man among the Phoenicians, how that 53 00:05:12.240 --> 00:05:17.920 people was able to flourish so remarkably in world commerce. 54 00:05:17.920 --> 00:05:21.280 Mentor answered, laissez-faire. 55 00:05:21.280 --> 00:05:28.300 Above all, never do anything to interfere with trade in order to turn it to your views. 56 00:05:28.300 --> 00:05:33.780 The prince must not concern himself with trade for fear of hindering it. 57 00:05:33.780 --> 00:05:39.180 He must leave all profits to his subjects who earn them, otherwise they will become 58 00:05:39.180 --> 00:05:41.160 discouraged. 59 00:05:41.160 --> 00:05:43.420 Trade is like certain springs. 60 00:05:43.420 --> 00:05:47.620 If you turn them from their course, they will dry up. 61 00:05:47.620 --> 00:05:52.880 Profit and convenience can alone attract foreigners to your shores. 62 00:05:52.880 --> 00:05:58.320 If you make trade difficult and less useful for them, they will gradually withdraw and 63 00:05:58.320 --> 00:06:00.320 not return. 64 00:06:00.320 --> 00:06:08.160 Similarly, in the land of Salant, the liberty of commerce was entire, by which Fenellon 65 00:06:08.160 --> 00:06:15.500 explicitly meant the absence of state interference in domestic as well as foreign trade. 66 00:06:15.500 --> 00:06:20.100 Every good entered and left the country with complete freedom. 67 00:06:20.100 --> 00:06:24.820 was similar to the ebb and flow of the tide. 68 00:06:24.820 --> 00:06:31.940 In his treatise on the existence of God, Fenelon attacked mercantilist nationalism by stressing 69 00:06:31.940 --> 00:06:36.100 the unity of all peoples dispersed over the earth. 70 00:06:36.100 --> 00:06:42.840 Moreover, he stressed that human reason is independent and above man, and is the same 71 00:06:42.840 --> 00:06:44.980 in all countries. 72 00:06:44.980 --> 00:06:51.600 And just as God unites all peoples through a common and universal reason, so the sea 73 00:06:51.600 --> 00:06:59.300 and the earth unite mankind by providing communication and resources which can be exchanged for one 74 00:06:59.300 --> 00:07:00.300 another. 75 00:07:00.300 --> 00:07:08.800 Fennelon waxed eloquent on natural specialization and free trade uniting all peoples. 76 00:07:08.800 --> 00:07:15.640 It is the effect of a wise overruling providence that no land yields all that is useful to 77 00:07:15.640 --> 00:07:17.520 human life. 78 00:07:17.520 --> 00:07:24.120 For want invites men to commerce in order to supply one another's necessities. 79 00:07:24.120 --> 00:07:29.080 Want therefore is the natural tie of society between nations. 80 00:07:29.080 --> 00:07:35.040 Otherwise, all peoples would be reduced to one sort of food and clothing, and nothing 81 00:07:35.040 --> 00:07:39.880 would invite them to know and visit one another. 82 00:07:39.880 --> 00:07:46.560 Following his mentor Fleury, Fenallon stressed the importance and productivity of agriculture 83 00:07:46.560 --> 00:07:52.640 and attacked rulers for impoverishing the countryside through crippling taxation and 84 00:07:52.640 --> 00:07:58.600 for diverting resources from agriculture to luxury products. 85 00:07:58.600 --> 00:08:03.740 Fenallon was eloquent in his attack on tyranny and absolutism. 86 00:08:03.740 --> 00:08:08.480 Monarchs, he thundered, take all and ruin everything. 87 00:08:08.480 --> 00:08:14.700 They are sole possessors of the entire state, but the whole realm languishes. 88 00:08:14.700 --> 00:08:18.900 The countryside is uncultivated and almost deserted. 89 00:08:18.900 --> 00:08:21.220 Towns diminish every day. 90 00:08:21.220 --> 00:08:22.980 Trade stagnates. 91 00:08:22.980 --> 00:08:28.740 The king's absolute power creates as many slaves as he has subjects. 92 00:08:28.740 --> 00:08:34.680 This monstrous power, swollen to its most violent excess, cannot endure. 93 00:08:34.680 --> 00:08:38.000 It has no support in the heart of the people. 94 00:08:38.000 --> 00:08:43.340 At the first blow, the idol will fall, crack, and be crushed underfoot. 95 00:08:43.340 --> 00:08:51.540 Contempt, hate, vengeance, defiance, in a word, all passions will unite against so odious 96 00:08:51.540 --> 00:08:54.220 a rule. 97 00:08:54.220 --> 00:09:00.500 To Fenallon, war is the greatest of evils, and France's pernicious policy of constant 98 00:09:00.500 --> 00:09:06.020 wars was the result of her nationalist and mercantilist economic policies. 99 00:09:06.020 --> 00:09:12.620 Cursed be those rulers, declared Fenallon, who augment their power at the expense of 100 00:09:12.620 --> 00:09:19.340 other nations, and who seek a monstrous glory in the blood of their fellow men. 101 00:09:19.340 --> 00:09:25.340 To educate the young duke of Burgundy on the evils of war, Fenelon engaged a man who was 102 00:09:25.340 --> 00:09:29.260 called one of the cleverest men of the century. 103 00:09:29.260 --> 00:09:36.940 Francois Leblanc had published a massive treatise on money and coinage in 1690, an historical 104 00:09:36.940 --> 00:09:43.780 treatise on the moneys of France from the beginning of the monarchy until the present. 105 00:09:43.780 --> 00:09:50.620 Here LeBlanc had condemned kings for engaging in debasement for their monetary profit. 106 00:09:50.620 --> 00:09:56.700 Fenelon commissioned LeBlanc to write a tome for the young duke on all the treaties between 107 00:09:56.700 --> 00:10:03.540 the nations of Europe and the causes and consequences of all the wars that ensued, as well as the 108 00:10:03.540 --> 00:10:06.740 ways they might have been avoided. 109 00:10:06.740 --> 00:10:12.620 Unfortunately, LeBlanc died before he could finish this monumental task. 110 00:10:12.620 --> 00:10:20.140 One of the key figures in the Burgundy Circle was Charles de Saint-Maur, the Duke of Montossier. 111 00:10:20.140 --> 00:10:26.580 Montossier was governor of the Royal Dauphin, and Leblanc, before taking on the book, and 112 00:10:26.580 --> 00:10:31.780 Abbé Fleury, were both employees in the service of Montossier. 113 00:10:31.780 --> 00:10:38.860 Leblanc's place in teaching the Duke had been preceded by Pierre-Daniel Huey, bishop of 114 00:10:38.860 --> 00:10:39.860 Avranches. 115 00:10:39.860 --> 00:10:52.860 Wey, a friend of LeBlanc, denounced French mercantilist and protectionist policies in 1694, and praised the free trade that had brought prosperity to the Dutch. 116 00:10:52.860 --> 00:11:06.860 In 1711, the Grand Dauphin, son of Louis XIV, died, and the Burgundy Circle was overjoyed, since the Duke was now in line for the throne to succeed the aged Sun King. 117 00:11:06.860 --> 00:11:13.220 Banking. But tragedy struck the following year, when the duke, his wife, and his eldest 118 00:11:13.220 --> 00:11:21.860 son were all struck dead of measles. All the hopes, all the plans, were cruelly destroyed, 119 00:11:21.860 --> 00:11:28.640 and Fenelon wrote to a friend in despair, Men work by their education to form a subject 120 00:11:28.640 --> 00:11:35.060 full of courage and ornamented by knowledge. Then God comes along to destroy this house 121 00:11:35.060 --> 00:11:37.560 House of Cards. 122 00:11:37.560 --> 00:11:43.940 The tragic end of the Burgundy Circle illuminates a crucial strategic flaw in the plans, not 123 00:11:43.940 --> 00:11:50.300 only of the Burgundy Circle, but also of the physiocrats, Turgot, and other laissez-faire 124 00:11:50.300 --> 00:11:53.640 thinkers of the later 18th century. 125 00:11:53.640 --> 00:11:59.060 For their hopes and their strategic vision were invariably to work within the matrix 126 00:11:59.060 --> 00:12:03.840 of the monarchy and its virtually absolute rule. 127 00:12:03.840 --> 00:12:10.400 The idea, in short, was to get into court, influence the corridors of power, and induce 128 00:12:10.400 --> 00:12:17.840 the king to adopt libertarian ideas, and impose a laissez-faire revolution, so to speak, from 129 00:12:17.840 --> 00:12:19.520 the top. 130 00:12:19.520 --> 00:12:25.700 If the king could not be persuaded directly, then a new king's ideas and values would be 131 00:12:25.700 --> 00:12:31.880 formed from childhood by liberal preceptors and tutors. 132 00:12:31.880 --> 00:12:38.300 Reliance on the good will of the king, however, suffered from several inherent defects. One, 133 00:12:38.300 --> 00:12:43.600 as in the case of the Duke of Burgundy, was reliance on the existence and good health 134 00:12:43.600 --> 00:12:51.600 of one person. A second is a more systemic flaw. Even if one can convince the king that 135 00:12:51.600 --> 00:12:58.120 the interests of his subjects require liberty and laissez-faire, the standard argument that 136 00:12:58.120 --> 00:13:25.120 The way his own revenue will increase proportionately to their prosperity is a shaky one, for the king's revenue might well be maximized, certainly in the short run and even in the long run, by tyrannically sweating his subjects to attain the maximum possible revenue, and relying on the altruism of the monarch is a shaky read at best. 137 00:13:25.120 --> 00:13:31.240 All these reasons, appealing to a monarch to impose laissez-faire from above, can only 138 00:13:31.240 --> 00:13:33.720 be a losing strategy. 139 00:13:33.720 --> 00:13:40.600 A far better strategy would have been to organize a mass opposition from below among the ruled 140 00:13:40.600 --> 00:13:46.840 and exploited masses, an opposition that would have given laissez-faire a far more solid 141 00:13:46.840 --> 00:13:51.960 groundwork in adherence by the bulk of the population. 142 00:13:51.960 --> 00:13:58.120 In the long run, of course, mass opposition, even revolution, was precisely what happened 143 00:13:58.120 --> 00:14:04.840 to France—a revolution from below, that was partially, if not largely, inspired by 144 00:14:04.840 --> 00:14:07.520 laissez-faire ideals. 145 00:14:07.520 --> 00:14:12.400 The erudite and sophisticated laissez-faire thinkers of the seventeenth and eighteenth 146 00:14:12.400 --> 00:14:19.440 centuries, however, would have rebuffed such a suggested strategy as certainly inconvenient 147 00:14:19.440 --> 00:14:26.040 and probably lunatic, especially in the light of the failure of the various inchoate, peasant 148 00:14:26.040 --> 00:14:30.520 and other frond rebellions of the mid-seventeenth century. 149 00:14:30.520 --> 00:14:38.040 Not least of all, men of influential and privileged status themselves are rarely inclined to toss 150 00:14:38.040 --> 00:14:45.000 all their privileges aside to engage in the lonely and dangerous task of working outside 151 00:14:45.000 --> 00:14:47.000 The Inherited Political System 152 00:14:47.000 --> 00:14:56.800 8. The Laissez-faire Utilitarian, the Seigneur de Beleba 153 00:14:56.800 --> 00:15:02.520 One of the influential anti-mercantilist and pro-laisez-faire thinkers of the last decades 154 00:15:02.520 --> 00:15:13.740 of Louis XIV was Charles-Paul Roule de l'Hôpital, Seigneur de Beleba, died 1706. The great-grandson 155 00:15:13.740 --> 00:15:19.940 As the son of a Chancellor of France, Belébat was an influential member during the 1690s 156 00:15:19.940 --> 00:15:25.820 of an oppositional political salon in the Luxembourg Palace, in the Luxembourg Gardens 157 00:15:25.820 --> 00:15:28.080 district of Paris. 158 00:15:28.080 --> 00:15:35.620 The salon met weekly at the home of Belébat's first cousin, François Témolion, the abbé 159 00:15:35.620 --> 00:15:37.280 de Choisi. 160 00:15:37.280 --> 00:15:45.100 In the autumn of 1692, Beleba presented six memoirs to Louis XIV, copies and extracts 161 00:15:45.100 --> 00:15:48.960 of which were reproduced throughout France. 162 00:15:48.960 --> 00:15:55.000 Beleba, too, focused on the wars with the Dutch as being the key to the economic problems 163 00:15:55.000 --> 00:15:57.280 of France. 164 00:15:57.280 --> 00:16:03.440 States became wealthy, advised Beleba, not by seizing or destroying the commerce of other 165 00:16:03.440 --> 00:16:26.720 Bellébat, too, emphasized that God had woven all peoples into an interdependent network 166 00:16:26.720 --> 00:16:32.820 of reciprocal advantage by means of trade and specialization. 167 00:16:32.820 --> 00:16:37.780 There is nothing that one country lacks which the others do not produce. 168 00:16:37.780 --> 00:16:45.000 God, having created men for society, has so well divided them that they cannot do without 169 00:16:45.000 --> 00:16:47.540 one another. 170 00:16:47.540 --> 00:16:52.700 Restrictions on trade by government only crippled this natural interdependence. 171 00:16:52.700 --> 00:16:58.840 Therefore, merchants should be free to pursue the commerce of their choice. 172 00:16:58.840 --> 00:17:04.400 The direction of economic activities in each country is usually determined by the natural 173 00:17:04.400 --> 00:17:09.080 resources and the type of capital investment in that area. 174 00:17:09.080 --> 00:17:16.640 It is not the case, concluded Beléba, that trade in one country benefits one party at 175 00:17:16.640 --> 00:17:18.680 the expense of others. 176 00:17:18.680 --> 00:17:21.640 Instead, the reverse is true. 177 00:17:21.640 --> 00:17:28.540 Moreover, freedom for merchants and domestic trade was as important as in foreign trade. 178 00:17:28.540 --> 00:17:34.060 The network of trade and exchange is internal as well as external. 179 00:17:34.060 --> 00:17:40.660 Furthermore, in a prefigurement of the Hayekian argument for the free market, Beliband noted, 180 00:17:40.660 --> 00:17:47.860 as Professor Rothkruge points out, that every transaction, either domestic or foreign, required 181 00:17:47.860 --> 00:17:53.900 complete freedom because it was carried out in special circumstances by merchants whose 182 00:17:53.900 --> 00:18:00.500 His fortunes depended partially upon the secret and unique procedures by which each conducted 183 00:18:00.500 --> 00:18:02.900 his business. 184 00:18:02.900 --> 00:18:08.760 State regulation, then, far from protecting the market, would cripple the liberty necessary 185 00:18:08.760 --> 00:18:12.260 to any prosperous trade. 186 00:18:12.260 --> 00:18:17.780 Natural resources, Belébá explained, are worthless without people to cultivate them 187 00:18:17.780 --> 00:18:21.340 and to engage in trade and commerce. 188 00:18:21.340 --> 00:18:29.340 Beleba then engaged in a sophisticated analysis of the elements necessary for successful market activity. 189 00:18:29.340 --> 00:18:36.340 We call commerce an exchange between men of the things they mutually need. 190 00:18:36.340 --> 00:18:42.340 In both domestic and foreign trade, the principles for success are the same. 191 00:18:42.340 --> 00:18:49.340 And despite the fact that there is an infinite number of ways in which to practice trade, all different, 192 00:18:49.340 --> 00:18:50.340 are different. 193 00:18:50.340 --> 00:18:56.620 They are founded on a great liberty, large capital investment, a lot of good faith, much 194 00:18:56.620 --> 00:19:00.740 application and a great secrecy. 195 00:19:00.740 --> 00:19:06.660 Each merchant, having his particular views in such a way that he who profits from a sale 196 00:19:06.660 --> 00:19:13.340 of his products does not prevent the one who buys them from profiting considerably by disposing 197 00:19:13.340 --> 00:19:14.760 Banking of them. 198 00:19:14.760 --> 00:19:22.420 Thus the entire success of commerce, consisting, as it does, in liberty, large capital investment, 199 00:19:22.420 --> 00:19:29.180 application and secrecy, prevents princes from ever intervening without destroying the 200 00:19:29.180 --> 00:19:31.140 principles. 201 00:19:31.140 --> 00:19:37.740 Thus belé-bas, in addition to a sensitive appreciation of the role of individual entrepreneurship 202 00:19:37.740 --> 00:19:45.900 and Energy by the Merchant, and of the Mutual Profitability of Exchange, sees, if only vaguely, 203 00:19:45.900 --> 00:19:52.540 that the great variety of individual trade can yet be analyzed correctly in a small number 204 00:19:52.540 --> 00:20:01.340 of formal laws, laws or truths which apply to all entrepreneurship and exchange. 205 00:20:01.340 --> 00:20:08.060 In one vital area, Belébat advanced significantly beyond the laissez-faire views of Fenelon 206 00:20:08.060 --> 00:20:14.300 and others, who were so opposed to the luxury of the absolutist court and the nouveau riche 207 00:20:14.300 --> 00:20:22.020 bureaucracy that they wished the government to restrict luxury production and trade. Belébat 208 00:20:22.020 --> 00:20:29.500 swept away such inconsistent exceptions to laissez-faire. The natural laws of trade, which 209 00:20:29.500 --> 00:20:35.140 which, for him, encompassed considerations of utility, applied to luxury as well as to 210 00:20:35.140 --> 00:20:39.340 all other branches of production and trade. 211 00:20:39.340 --> 00:20:45.580 Bellé-Bas eloquently concluded from his analysis that it must be taken as a principle that 212 00:20:45.580 --> 00:20:52.500 liberty is the soul of commerce, without which good harbors, great rivers and fertile lands 213 00:20:52.500 --> 00:20:54.540 are of no use. 214 00:20:54.540 --> 00:20:59.000 When liberty is absent, nothing is of any avail. 215 00:20:59.000 --> 00:21:03.440 In short, the government should let commerce go where it wishes. 216 00:21:03.440 --> 00:21:08.680 Les en faire le commerce que l'on voudra. 217 00:21:08.680 --> 00:21:14.880 The Seigneur de Beleba made it clear that he grounded his hope of applying libertarianism 218 00:21:14.880 --> 00:21:21.700 in an extreme form of early utilitarianism, a utilitarianism that he expected would be 219 00:21:21.700 --> 00:21:24.320 applied by the king. 220 00:21:24.320 --> 00:21:31.320 The King was urged to channel people's self-interest into free and harmonious activities by seeing 221 00:21:31.320 --> 00:21:39.520 to it that virtue is rewarded and evil, theft and other interference with trade, is punished. 222 00:21:39.520 --> 00:21:44.760 In that way, men would become accustomed to pursue virtue. 223 00:21:44.760 --> 00:21:52.040 Belébá went very far in utilitarianism by maintaining that justice was always and only 224 00:21:52.040 --> 00:22:01.240 A Fatal Weakness in his theory was the confident view that the self-interest of the king, who 225 00:22:01.240 --> 00:22:07.800 was supposed to put all this into effect, was always identical to the harmonious self-interest 226 00:22:07.800 --> 00:22:09.600 of his subjects. 227 00:22:09.600 --> 00:22:17.080 Bellé-Bas also anticipated the later view that Montaigne-type skepticism about reason, 228 00:22:17.080 --> 00:22:23.740 Rather than providing support for going along with state absolutism, teaches men humility 229 00:22:23.740 --> 00:22:27.480 so that they will accept liberty and the free market. 230 00:22:27.480 --> 00:22:34.280 Reason, however, is not the sole and not even the main motive for the drive for the exercise 231 00:22:34.280 --> 00:22:36.560 of power. 232 00:22:36.560 --> 00:22:41.040 Acquisition of wealth and privilege would seem to be motive enough. 233 00:22:41.040 --> 00:22:46.420 And since there will always be people and groups who will seek to seize and aggrandize 234 00:22:46.420 --> 00:23:11.460 9. Bois-Gilbert and laissez-faire 235 00:23:11.460 --> 00:23:18.140 The best known of the late 17th century French advocates of laissez-faire is Pierre Lepesson, 236 00:23:18.140 --> 00:23:24.580 Sur de Bois-Gilbert, 1646 to 1714. 237 00:23:24.580 --> 00:23:31.780 Born in Rouen into a highborn Norman family of judicial officers and a cousin of the poet-dramatist 238 00:23:31.780 --> 00:23:38.220 Cornet brothers, Bois-Gilbert was educated by the Jesuits and eventually purchased two 239 00:23:38.220 --> 00:23:41.280 judicial offices at Rouen. 240 00:23:41.280 --> 00:23:48.400 He served there as Lieutenant General of the Court from 1690 until his death. Bois-Gilbert 241 00:23:48.400 --> 00:23:57.480 was also a large landowner, businessman, literatur, translator, attorney and historian. Bois-Gilbert 242 00:23:57.480 --> 00:24:04.600 was a combination of genius and crank. His first and most important work, Le Detail de 243 00:24:04.600 --> 00:24:12.080 de la France, a detailed account of France, published in 1695, was revealingly subtitled 244 00:24:12.080 --> 00:24:17.080 France Ruined under the Rule of Louis XIV. 245 00:24:17.080 --> 00:24:22.840 Bois-Gilbert penned innumerable letters to successive Controllers General of France on 246 00:24:22.840 --> 00:24:29.960 the virtues of free trade and laissez-faire, and on the evils of government intervention. 247 00:24:29.960 --> 00:24:37.080 After 1699, Bois-Gilbert kept hammering away at Comptroller General Michel Chamillard for 248 00:24:37.080 --> 00:24:45.280 years but to no effect. Chamillard kept refusing him permission to print his tomes, but Bois-Gilbert 249 00:24:45.280 --> 00:24:50.920 published them anyway, finally printing his collected works under the title Le Detail 250 00:24:50.920 --> 00:24:54.480 de la France in 1707. 251 00:24:54.480 --> 00:25:00.760 In that year, the same year that Vauban's Diem Royale was censored, Bois-Gilbert's work 252 00:25:00.760 --> 00:25:05.720 was also outlawed and its author sent into brief exile. 253 00:25:05.720 --> 00:25:13.840 He returned under promise of silence but promptly reprinted his book four times between 1708 254 00:25:13.840 --> 00:25:16.920 and 1712. 255 00:25:16.920 --> 00:25:23.120 Arguing for laissez-faire, Bois-Gilbert denounced the mercantilist preoccupation with amassing 256 00:25:23.120 --> 00:25:29.360 in DC, pointing out that the essence of wealth is in goods, not coin. 257 00:25:29.360 --> 00:25:33.200 Money, Bois-Gilbert explained, is just a convenience. 258 00:25:33.200 --> 00:25:41.000 Thus, the influx of bullion from the New World in the 16th century only served to raise prices. 259 00:25:41.000 --> 00:25:46.960 If nature were left to herself, all men would enjoy plenty, and the government's attempts 260 00:25:46.960 --> 00:25:51.100 to improve upon nature only caused havoc. 261 00:25:51.100 --> 00:25:56.860 The simple remedy for the manifold evils under which France was suffering was, as Professor 262 00:25:56.860 --> 00:26:03.020 Kyoan puts it, for the government to stop interfering with natural patterns of trade 263 00:26:03.020 --> 00:26:07.760 and commerce, and laissez-faire la nature. 264 00:26:07.760 --> 00:26:16.420 No superhuman effort for reform was needed, only the cessation of ill-considered effort. 265 00:26:16.420 --> 00:26:21.820 Constructive or social harmony, Bois-Gilbert wrote, arises from the efforts of innumerable 266 00:26:21.820 --> 00:26:27.060 individuals to advance their self-interest and their happiness. 267 00:26:27.060 --> 00:26:34.220 If the government removed all artificial restrictions upon trade, all participants would have incentive 268 00:26:34.220 --> 00:26:41.840 to produce and exchange, and self-interest would then be free to do its constructive work. 269 00:26:41.840 --> 00:26:48.320 Only the use of coercion or state privilege pits one's self-interest against another, 270 00:26:48.320 --> 00:26:54.920 whereas submission to the wise natural order would ensure harmony between individual greed 271 00:26:54.920 --> 00:26:57.780 and universal benefit. 272 00:26:57.780 --> 00:27:05.040 As Keoughan summarizes Bois-Gilbert, so long as we do not interfere with her, nature's 273 00:27:05.040 --> 00:27:11.140 workings, our attempts to get as much as we can for ourselves will maximize everybody's 274 00:27:11.140 --> 00:27:14.180 is happiness in the long run. 275 00:27:14.180 --> 00:27:21.660 It is not, then, that individuals aim at the general good while pursuing their own self-interest. 276 00:27:21.660 --> 00:27:28.060 On the contrary, it is the glory of the natural order that, while individuals aim at their 277 00:27:28.060 --> 00:27:34.100 own private utility, they will also promote the interests of all. 278 00:27:34.100 --> 00:27:40.420 Although individuals may try to subvert the laws and gain at the expense of their neighbors, 279 00:27:40.420 --> 00:27:47.340 The natural order of liberty and laissez-faire will maintain peace, harmony and universal 280 00:27:47.340 --> 00:27:55.300 benefit, as Bois-Gilbert declares, but nature alone can introduce that order and maintain 281 00:27:55.300 --> 00:27:56.940 the peace. 282 00:27:56.940 --> 00:28:03.440 Any other authority spoils everything by trying to interfere, no matter how well-intentioned 283 00:28:03.440 --> 00:28:05.620 it may be. 284 00:28:05.620 --> 00:28:11.540 In the free market established by the natural order, the pure desire for profit will be 285 00:28:11.540 --> 00:28:16.140 the soul of every market for buyer and seller alike. 286 00:28:16.140 --> 00:28:22.260 And it is with the aid of that equilibrium or balance that each partner to the transaction 287 00:28:22.260 --> 00:28:27.800 is equally required to listen to reason and submit to it. 288 00:28:27.800 --> 00:28:33.780 The natural order of the free market prevents any exploitation from taking place. 289 00:28:33.780 --> 00:28:40.500 Thus, Nature or Providence had so ordered the business of life that, provided it is 290 00:28:40.500 --> 00:28:48.220 left alone, en laissez-faire, it is not within the power of the most powerful in buying goods 291 00:28:48.220 --> 00:28:55.680 from some poor wretch to prevent the sale from providing the subsistence of the latter. 292 00:28:55.680 --> 00:29:02.580 Everything works out all right, provided that Nature is left alone, en laissez-faire la 293 00:29:02.580 --> 00:29:20.860 Bois-Gilbert also specifically demonstrated the counterproductive results of government 294 00:29:20.860 --> 00:29:21.860 intervention. 295 00:29:21.860 --> 00:29:27.940 Thus, when the French government tried to alleviate hunger by lowering grain prices 296 00:29:27.940 --> 00:29:34.060 and Controlling Trade, all it accomplished was to diminish the cultivation and production 297 00:29:34.060 --> 00:29:41.660 of grain, and hence to intensify the very hunker that the government was trying to relieve. 298 00:29:41.660 --> 00:29:48.380 Such intervention, in the summary of Professor Keown, would make sense only if grain, like 299 00:29:48.380 --> 00:29:54.860 manna or mushrooms, sprang up without human effort, since it ignores the effects of low 300 00:29:54.860 --> 00:30:01.740 Low prices on the habits of cultivators. If governments simply ceased tampering, the French 301 00:30:01.740 --> 00:30:08.580 economy, like a city from which a siege is lifted, would regain its health. Free to set 302 00:30:08.580 --> 00:30:15.100 their own price for grain, and to import grain freely throughout the land, Frenchmen would 303 00:30:15.100 --> 00:30:19.240 be plentifully supplied with bread. 304 00:30:19.240 --> 00:30:25.040 In illustrating the nature and advantages of specialization and trade, Bois-Gilbert 305 00:30:25.040 --> 00:30:31.080 is one of the first economists to begin with the simplest hypothetical exchange. 306 00:30:31.080 --> 00:30:37.800 Two workers, one producing wheat and the other wool, and then to extend the analysis to a 307 00:30:37.800 --> 00:30:42.820 small town and, finally, to the entire world. 308 00:30:42.820 --> 00:30:48.880 This method of successive approximation, of beginning with the simplest and then extending 309 00:30:48.880 --> 00:30:55.520 Studying the analysis step by step would eventually prove to be the most fruitful way of developing 310 00:30:55.520 --> 00:31:00.920 an economic theory to analyze the economic world. 311 00:31:00.920 --> 00:31:07.240 Graphically illustrating the respective workings of power and market, Bois-Gilbert supposes 312 00:31:07.240 --> 00:31:14.120 a tyrant who tortures his subjects by tying them up within sight of each other, each surrounded 313 00:31:14.120 --> 00:31:21.680 by an abundance of the particular good that he produces, food, clothing, liquor, water, 314 00:31:21.680 --> 00:31:22.780 etc. 315 00:31:22.780 --> 00:31:28.240 They would be made instantly happy if the tyrant were to remove their chains and allow 316 00:31:28.240 --> 00:31:32.720 them to exchange their surplus goods for those of one another. 317 00:31:32.720 --> 00:31:39.240 But if the tyrant says no, he can only remove the chains of his people when some war or 318 00:31:39.240 --> 00:31:47.240 is settled, or at some future time, he is only adding ridicule and mockery to their grievous torture. 319 00:31:47.240 --> 00:31:58.240 Here, Bois-Gilbert was bitterly mocking the reply that Louis XIV and his ministers habitually made to the pleas of reformers and oppositionists. 320 00:31:58.240 --> 00:32:01.240 We must wait for the peace. 321 00:32:01.240 --> 00:32:08.520 Again, like the other oppositionists, war was exposed as the standard excuse for maintaining 322 00:32:08.520 --> 00:32:12.720 the crippling interventions of government. 323 00:32:12.720 --> 00:32:18.900 Like Bélibat, Bois-Gilbert had no patience with inconsistent reformers who tried to make 324 00:32:18.900 --> 00:32:22.960 an exception to laissez-faire in luxury products. 325 00:32:22.960 --> 00:32:28.560 To Bois-Gilbert, natural wealth was not just biological necessities. 326 00:32:28.560 --> 00:32:35.560 Rather, true wealth consists of a full enjoyment not only of the necessaries of life, but 327 00:32:35.560 --> 00:32:42.200 even of all the superfluities and all that which can give pleasure to the senses. 328 00:32:42.200 --> 00:32:48.240 In addition, Bois-Gilbert was perhaps the first to integrate discussion of fiscal policy 329 00:32:48.240 --> 00:32:51.960 with his general economic doctrines. 330 00:32:51.960 --> 00:32:57.760 Adopting Vauban's proposal for the elimination of all taxes and their substitution by a 331 00:32:57.760 --> 00:33:02.680 A Single Direct Tax of Ten Percent on All Incomes 332 00:33:02.680 --> 00:33:10.680 Bois-Gilbert analyzed and bitterly denounced the effects of indirect taxes on agriculture. 333 00:33:10.680 --> 00:33:16.840 Heavy taxes on grain, he pointed out, have raised costs and crippled grain production 334 00:33:16.840 --> 00:33:18.800 and trade. 335 00:33:18.800 --> 00:33:25.000 For four decades, he argued, the French government had virtually declared war on consumption 336 00:33:25.000 --> 00:33:32.520 and Trade by its monstrous taxation, resulting in severe depression in every area of the economy. 337 00:33:33.720 --> 00:33:41.080 On the free market, in contrast, everyone benefits, for trade is nothing but reciprocal utility, 338 00:33:41.080 --> 00:33:48.600 and all parties, buyers and sellers must have an equal interest or necessity to buy or to sell. 339 00:33:48.600 --> 00:33:56.880 Hence, with Bélibat and Bois-Gilbert, the focus of the classical liberal attack on statism 340 00:33:56.880 --> 00:34:03.760 shifted from moralistic denunciation of luxury or pernicious Machiavellianism to meeting 341 00:34:03.760 --> 00:34:09.200 mercantilist doctrine on its own utilitarian grounds. 342 00:34:09.200 --> 00:34:15.640 Even setting aside classical morality, then, utility and general happiness required the 343 00:34:15.640 --> 00:34:20.840 and the private property and laissez-faire of the natural order. 344 00:34:20.840 --> 00:34:26.960 In a sense, old-fashioned natural law had been extended to the economic sphere and to 345 00:34:26.960 --> 00:34:33.520 the meshing of individual utility and self-interest through the working of the free market. 346 00:34:33.520 --> 00:34:39.920 In contrast to devout mystics like Fenellon, Belébat and Bois-Gilbert were in harmony 347 00:34:39.920 --> 00:34:47.780 with the new mechanistic cosmologies of Isaac Newton and others of the late 17th century. 348 00:34:47.780 --> 00:34:53.360 God had created a set of natural laws of the world and of society. 349 00:34:53.360 --> 00:34:59.640 It was the task of man's reason, a reason universal to all, regardless of nation or 350 00:34:59.640 --> 00:35:07.180 custom, to understand those laws and to achieve their self-interest and happiness within them. 351 00:35:07.180 --> 00:35:13.540 In the economy, free trade and free markets, through the harmony of reciprocal benefits, 352 00:35:13.540 --> 00:35:19.860 advance the interest and happiness of all by each seeking his own personal utility and 353 00:35:19.860 --> 00:35:21.820 self-interest. 354 00:35:21.820 --> 00:35:28.740 The golden rule and absence of violence was the natural moral law that uncovered the key 355 00:35:28.740 --> 00:35:33.740 to social harmony and economic prosperity. 356 00:35:33.740 --> 00:35:40.600 While such analysis was not in itself anti-Christian, it certainly replaced the ascetic aspects 357 00:35:40.600 --> 00:35:45.800 of Christianity with an optimistic, more man-centered creed. 358 00:35:45.800 --> 00:35:52.240 And also, it was consistent with the rising religion of deism, in which God was the creator 359 00:35:52.240 --> 00:35:58.880 or clock-winder who created the mechanism of the universe and its self-subsistent natural 360 00:35:58.880 --> 00:36:03.440 laws and then retired from the scene. 361 00:36:03.440 --> 00:36:09.480 As Professor Spengler has pointed out, the eighteenth century conceptualized the economic 362 00:36:09.480 --> 00:36:11.640 or social universe. 363 00:36:11.640 --> 00:36:17.280 It made the hidden processes of the social order visible even as the seventeenth had 364 00:36:17.280 --> 00:36:22.900 become aware of those of the physical order and made them visible. 365 00:36:22.900 --> 00:36:29.280 It generalized to the realm of man the notion of the frame hidden behind the most common 366 00:36:29.280 --> 00:36:36.780 and Phenomena, and the invisible hand by which nature works in all things. 367 00:36:36.780 --> 00:36:42.980 As for Bois-Gilbert, his contribution was to be among the first, if not the first, to 368 00:36:42.980 --> 00:36:50.620 conceive, albeit imperfectly, of the system of relations that underlies the economic order. 369 00:36:50.620 --> 00:36:57.180 His contribution consisted in his sequestering, however imperfectly, the economic order from 370 00:36:57.180 --> 00:37:03.520 and the Total Societal System, in becoming aware of the comparatively autonomous character 371 00:37:03.520 --> 00:37:10.100 of this order, in discovering the essentially mechanical and psychological connections binding 372 00:37:10.100 --> 00:37:16.100 men together in an economic order, and in drawing attention to the manner in which the 373 00:37:16.100 --> 00:37:24.580 economic order was subject to disturbances by impulses originating in the political order. 374 00:37:24.580 --> 00:37:29.620 It should also be mentioned that it surely seemed easier to convince the king and his 375 00:37:29.620 --> 00:37:36.620 ruling elite of the general utility of private property and the free market than to convince 376 00:37:36.620 --> 00:37:42.060 them that they were behaving as the heads of an immoral and criminal system of organized 377 00:37:42.060 --> 00:37:49.860 theft, so that the basic strategy of trying to convert the king led inexorably to at least 378 00:37:49.860 --> 00:37:55.860 A Broadly Utilitarian Approach to the Problems of Freedom and Government Intervention 379 00:37:55.860 --> 00:38:05.180 10. Optimistic Handbook at the Turn of the Century 380 00:38:05.180 --> 00:38:12.100 The rapid spread and even social dominance of these new ideas of laissez-faire, cryptodeism 381 00:38:12.100 --> 00:38:18.980 and the morality of utility and the golden rule may be seen in The Dialogues, a virtual 382 00:38:18.980 --> 00:38:24.260 A wonderful handbook of fashionable manners and ideas for the social climber, published 383 00:38:24.260 --> 00:38:30.700 in 1701 by the young littérature Nicolas Baudot de Jouilly. 384 00:38:30.700 --> 00:38:37.420 In dialogues, Baudot, son of a tax farmer in Vendôme, after lauding the manners taught 385 00:38:37.420 --> 00:38:43.940 in fashionable salons, proceeds to the ruling ideas of the day, where he vulgarizes the 386 00:38:43.940 --> 00:38:49.980 The laissez-faire doctrine into one grounded in a frank and candid hedonism. 387 00:38:49.980 --> 00:38:55.860 The desire for pleasure and for the avoidance of pain was grounded in the natural drive 388 00:38:55.860 --> 00:38:56.860 for self-preservation. 389 00:38:56.860 --> 00:39:05.180 Furthermore, the God of Christianity in the hands of Bodeaux became a quasi-deistic God 390 00:39:05.180 --> 00:39:11.780 who has provided all nature as a great feast where, in his inexhaustible goodness, God 391 00:39:11.780 --> 00:39:13.820 has convened us. 392 00:39:13.820 --> 00:39:19.720 The Garden of Eden had been a realm of enjoyment and sensate pleasure. The purpose of Jesus' 393 00:39:19.720 --> 00:39:27.700 arrival on earth was to recall mankind to that original enjoyment. Asceticism, furthermore, 394 00:39:27.700 --> 00:39:34.380 causes economic misery. Specialization, trade and the pursuit of wealth in the marketplace 395 00:39:34.380 --> 00:39:41.900 were the truest and therefore the God-given forms of charity. As Baudot put it, God had 396 00:39:41.900 --> 00:39:47.760 purposefully permitted us to multiply our needs in order to cause money to circulate 397 00:39:47.760 --> 00:39:54.700 among all men, passing from the purses of the rich to those of the poor. 398 00:39:54.700 --> 00:39:58.540 Trade then is the genuine charity. 399 00:39:58.540 --> 00:40:05.040 All this regional specialization and communication has been so admirably accomplished in order 400 00:40:05.040 --> 00:40:11.920 are to bind men to one another, who in effect should form only one single family, so that 401 00:40:11.920 --> 00:40:17.760 the need they would have for one another would accomplish among them what charity alone ought 402 00:40:17.760 --> 00:40:19.520 to do. 403 00:40:19.520 --> 00:40:26.060 It is for this reason that men, however different in mores, language and religion, are becoming 404 00:40:26.060 --> 00:40:31.880 united from one end of the world to another by reciprocal trade. 405 00:40:31.880 --> 00:40:37.880 It is also, for this reason, that they exchange equally things which are agreeable and those 406 00:40:37.880 --> 00:40:44.740 which are necessary, so that they can not only sustain life as in a pasture like beasts, 407 00:40:44.740 --> 00:40:50.740 but also to render it sweeter, more humane, and more polished by pleasures.