Circular reasoning. Forbonnais and the intricate history of circular flow analysis in the 1750s

Abstract

Circular flow analysis in mid-18th century France is normally associated with the writings of François Quesnay. From the early 1750 s, however, François Véron de Forbonnais developed a distinct theory of circulation in then well-known contributions to the Encyclopédie and his Elémens du commerce of 1754. This article argues that like Quesnay, Forbonnais was in part inspired by Cantillon’s Essay on the Nature of Trade in General. But while Quesnay gave original developments to the real aspects of Cantillon’’s analysis of circulation, Forbonnais focussed on developing monetary aspects, including arguments for the ‘non-neutrality’ of money and an original theory of the money interest rate.

Keywords:

• Cantillon
• Forbonnais
• Quesnay
• circular flow
• non-neutrality of money

JEL CODES:

• B11
• E40

Acknowledgments

I thank the participants in the session at the ESHET conference in Madrid at which this work was first presented, especially Gianni Vaggi, Gabriel Sabbagh and Margaret Schabas for their comments. I also thank the two anonymous referees of my paper for their suggestions. Any remaining errors are my own.

Notes

1 This passage was omitted from editions of Hume’s Political Discourses from 1770 onwards. Hence it did not feature in most modern editions (See Hume 1955, 92–93). In the French translations of 1754 (147) and 1767 (186) the passage was included.

2 Melon (1736) used the term ‘circulation’ prominently especially in chapter 24 on English political arithmetic. Dutot (1738) also frequently emphasised the importance of the uninterrupted circulation of money. See for example, article vii (vol 2, 289–294). Historians have highlighted the widespread use of the term in the 18th century since at least Monroe (1923, 272–289), Heckscher (1935, 2, 217–221) and Viner (1937, 36–40).

3 Some modern students who would disagree with this statement are Nagels (1970) and Benitez-Rochel and Robles-Teigeiro (2003) who have argued, in their own ways, that Boisguilbert developed a systematic analysis of circular flow. Murphy (1993) has made a similar case for Law. These readings do, however, require significant reconstructive efforts from dispersed passages that gain significance mostly as ‘anticipations’ of the more developed and systematic reasoning of Cantillon or Quesnay.

4 The fact that Savary did at the same time use the term ‘circulation’ in a number of places underscores my point about its loose usage. See e.g. the entry ‘Banque’ 240, 246, 252, 253, 254; the entry ‘Billet’, 342; and the entry ‘Commerce de France’ 838. Another specialized dictionary that went through many editions throughout the 18th century, Chomel’s Dictionnaire oeconomique, also did not have an entry on ‘circulation’.

5 See e.g Eriksen (2017) for the use of the metaphor in the 17th century and see n. 51 for some 18th century examples.

6 Cf. note 8 below.

7 The most forceful modern advocate of the direct and very substantial influence remains Schumpeter (1954, especially 222, 239–243). Commentators after Schumpeter, while confirming the influence of the Essai on Quesnay’s conception of the Tableaux, have in various ways acknowledged the significant ways in which his analysis differed both in technical details and with regards to the purposes to which it was put. See e.g. Meek (1962, 266–269), McNally (1988, 95–97), Brewer (2001, xix–xxii), (2005), Benitez-Rochel and Robles-Teigeiro (2003).

8 A discussion of the circulation of blood is preceded by the following definition: ‘CIRCULATION, s.f. (Gram.) se dit en général de tout mouvement périodique ou non, qui ne se fait point en ligne droit: on dit que le sang circule, que l’espece circule, &c.’. While therefore at least an analogy is noted in purely linguistic terms between the circulation of blood and money, a cross-reference to the subsection in the entry ‘Especes’ is, somewhat tellingly, missing.

9 The entry as a whole runs from page 957 to 970. The first two pages were written by a M. du Four, about whom little is known. The editors only indicate that he was ‘versé dans les matieres de finance’. He also contributed ‘douane’, ‘droits du roi’, ‘emprunt’, ‘fer (marque des fers)’.

10 The editors of the Encyclopédie acknowledged this previous publication when they stated that the subsection was reproduced from ‘the treatise on the Elemens du Commerce of M. de Forboney’ [sic.] (1755, 959). To be precise, they reproduced with very few changes the text of the second edition of Elémens. In this respect the entry was different from other contributions by Forbonnais in volumes 3 and 4 of the Encyclopédie. See below n. 27.

11 To be precise, Hume’s Political Discourses was published in early 1752. Postlethwayt’s entry ‘Circulation’ occurred in issue 42 of Postlethwayt’s Dictionary, which was first published as a separate installment towards the end of October 1752. The closely related entry ‘Cash’ was included in issue 39, published a little earlier around the beginning of August of the same year.

12 The Essay had been written around the early 1730s. For a study of Postlethwayt’s borrowings from Cantillon and comparisons with other published and manuscript versions of the latter’s writings see Cantillon (2015). Support is provided there for the view expressed in the next paragraph that Postlethwayt’s borrowings were probably to a large extent verbatim.

13 It is not impossible that Forbonnais would have had access to this English publication at an early stage. From November 1751 Postlethwayt’s Dictionary was published in weekly installments and by November 1753 the issues covering the letters A to K were published in a first volume. This volume was then immediately reviewed in Matthieu Maty’s Journal Britannique, a journal that had a Europe-wide francophone readership. There are some indications that Postlethwayt’s work soon drew the attention of members of the Gournay circle (see Sabbagh 2016, 29–30 and van den Berg 2017a, 1174 and 1193). As indicated below (n. 54 and n. 63), there are a few passages in Forbonnais’s writings, predating the publication of the first French print edition of Cantillon’s Essai, that hint at a possible familiarity with the different version of that writer’s words that had appeared in the entry ‘Barter’ of Postlethwayt’s Dictionary. However, it needs to be clearly acknowledged that these few similarities scarcely amount to evidence that could justify any strong claims. Instead, the possibility that Forbonnais had access from about 1753 to a French manuscript version of the Essai seems more likely. As far as Quesnay goes, those of his writings that show resemblances to anything Cantillon wrote postdate the publication of the first French print edition in 1755 and there is very little to suggest that he had actually studied any of Postlethwayt’s writings. This is despite a reference dating from 1760 (see Quesnay 2005, 465) to Postlethwayt (1757), which also included relevant fragments taken from Cantillon: it appears to be based on the review of that work of Postlethwayt that had appeared in the Journal de Commerce in 1759. This review in turn was a straightforward French translation of an English review that had appeared two years earlier in the Monthly Review (see van den Berg 2017b).

14 This Europe-wide dissemination of Forbonnais’s writings is explored in great detail in an excellent set of contributions to a special issue of History of European Ideas of 2014, edited by Antonella Alimento.

15 As part of far more extensive borrowings from Forbonnais, most of his chapter on circulation was included in English translation as the concluding chapter of Postlethwayt (1757, 332–362) and in anonymous (1767, 162–184). I discuss these little known cases of plagiarism from the Elémens in van den Berg (2017b). Its significance for the present paper is twofold. First, Postlethwayt (1757) actually combined large fragments on monetary theory from Cantillon and Forbonnais, suggesting in that way their compatibility. Although this by itself does not actually prove that Forbonnais had been intellectually indebted to Cantillon, it shows that a contemporary connoisseur like Postlethwayt at least recognized a very strong likeliness. Second, one of the English translations, the one printed anonymously in 1767 (for details again see van den Berg 2017b), is used below for quoting passages from the Elémens. In addition, Postlethwayt (1757, 87–109) also translated a part of Forbonnais’s introductory essay to his Négotiant anglois of 1753, which below is equally used for English quotations.

16 In their foreword to volume 1, dated 1 December 1758, the editors explained that in recent years a wealth of materials had appeared in the famous Dictionnaire Encyclopédique and the Journal Oeconomique and that they had considered it their ‘duty to benefit’ from this literature. As a result ‘Especes’ was adopted verbatim in volume 2, 375–394, as were several other entries written by Forbonnais. Ten years later Morellet, in the prospectus for what would have been a radically new commercial dictionary, highlighted this borrowing practice by noting that the Copenhagen edition had added a number of ‘articles généraux d’économie politique’ to the predominantly technical matter of the earlier editions of Savary. In this the Copenhagen edition had followed Postlethwayt’s innovation of collating two kinds of commercial knowledge, one technical and one political (see van den Berg 2017a).

17 During the 19th century Forbonnais moved into the blind spot of many historians of political economy. Even well-informed French historians started to neglect Forbonnais. See e.g. de Lavergne (1870) or Espinas (1891). Of course, it is rare for an author to be forgotten completely and the inclusion of the first part of Forbonnais (1767) in the influential series Mélanges d’Economie politique made some of his writings available to mid-19th century readers. Later French studies like Fleury (1915), Harsin (1928) and Morrisson and Goffin (1967) kept a modest interest going. More sustained interest in Forbonnais’s work is of a more recent date. See amongst others Alimento (1985, 2006, 2013), Meyssonnier (1989, 1990), Larrère (1992), van den Berg (2002), Sonenscher (2007), Hont (2008), Orain (2010, 2012, 2013), Demals and Hyard (2015) and Boyer (2017). For literature on the international diffusion of Forbonnais’s writings see n. 14 above.

18 The best introduction to the Gournay circle is the set of essays edited by Charles, Lefebvre and Théré (2011). It builds on various studies about this group of authors that have appeared mostly since the pioneering contributions by Tsuda (1983, 1993) and Murphy (1986a), including Meyssonnier (1989, 2008), Larrère (1992), Charles (2006) and Skornicki (2006). In this literature there is agreement that ‘membership’ of the group is mostly defined by being part of the network of contacts of Gournay and/or having published, during the 1750s, works that on the whole are in line with Gournay’s programme for economic and administrative reform. This necessarily loose criterion makes the exact boundaries of the circle somewhat fuzzy. Charles (2011, 87) counts 20 members, plus another eight persons ‘on the margin’; Skornicki (2006, 6) puts the number at 16. The number of works associated with the circle is estimated at about 40 (Charles 2011, 12; Skornicki 2006, 16).

19 Forbonnais’s biographer Fleury (1915, 36) establishes that he came to Paris in 1748. Charles, Lefebvre and Théré (2011, 14–15) speculate that the acquaintance was originally due to earlier commercial relations between the Vincent family, merchants from Saint-Malo with business in Cadiz, and the Véron family, cloth manufacturers from Le Mans, who exported through Cadiz. When Forbonnais arrived in Paris, Gournay was ‘probably one of his earliest contacts’. If so, then Gournay would have taken the ambitious younger man under his wing even before he became Intendant du commerce in 1751, a moment that sometimes is taken to signal the beginning of the cercle de Gournay.

20 Daniel-Charles Trudaine (1703–1769), who took over the direction of the Bureau of Commerce in 1749 and who was Gournay’s superior, was another crucial, though not unconditional, supporter of Gournay’s programme from the start. Georges-Marie Butel du Mont (1725–1788) was the other early protégé of Gournay.

21 Tsuda (1983, vi) notes that Gournay used the fifth edition of Child’s work published in Glasgow in 1751. As in earlier editions, this work had included a reprint of the much earlier ‘Tract against Usury’ by Thomas Culpeper the elder of 1621.

22 Tucker (1960, ch. 2) remains a good account of the controversies surrounding Child’s plea for a reduction in interest rates. Flandreau et al. (2009) provide detailed comparative 18th century data which show that Gournay was right about the higher average interest costs of commercial credit in France compared to the Dutch republic and especially Britain. It is of course a different question whether he and some of his protégées were also right to give so much weight to the higher costs of borrowing as a major cause for the lack of foreign competitiveness of French merchants and manufacturers.

23 Gournay did not get permission to publish these notes and the translation was published in 1754 without them. Although it was clear that the notes were read and commented upon in private by Forbonnais, Turgot, and Mably, they were long presumed lost, until professor Tsuda, upon discovering versions in three different French archives, published them in 1983. Meyssonnier (2008) is a more recent edition of Gournay’s notes which pays special attention to Forbonnais‘s comments on the notes.

24 Clearly Forbonnais had started work before 1753. His earliest writings on economic matters were a set of comments on Montesquieu which Fleury (1915, 161) claimed were already published in 1750, and then reprinted in 1753 in volume three of Fréron’s Opuscules (which was again reprinted in 1762 – I have only been able to examine the 1753 edition). The translation of Uztáriz has a permission to print dated 8 October 1752 and on page 89, n.b, it announced the forthcoming publication of Négotiant Anglois on which he was then still working (cf. note 29 below).

25 On this translation see Guasti (2014). For the English translation by John Kippax of the same Spanish work (the second edition of 1742) and Postlethwayt’s repeated use of it see van den Berg (2017b).

26 On this translation see Alimento (2014b).

27 Five of these, that is, the entries ‘Chambre d’assurance’ (57–60), ‘Change’ (127–132), ‘Colonie’ (648–651), ‘Commerce’ (690–699) and ‘Concurrence’ (832–833) would the next year be included as chapters of the Elémens du commerce, namely chapters, 7, 8, 6, 1 and 2, respectively. Apart from a number of small changes these entries had the same wording as found in the first edition of Elémens. In addition, Forbonnais contributed ‘Charte-partie’ (218–220), Commandite (688), ‘Communauté’ (724) and ‘Compagnie de Commerce’ (739–743), which did not later find a place in Elémens. By the time volume 4 of the Encyclopédie was published, in October 1754, two editions of Elémens had already appeared (see Avertissement to vol.4, 2) but the entries ‘Crédit’ (445–450) and ‘Culture des terres’ (552–566) followed the wording of chapters 10 and 3, respectively, of the first edition. Forbonnais also contributed ‘Contrebande’ (129–131) to volume four. Only Forbonnais’s final contribution, the subentry on circulation in the entry ‘Especes’ in volume five (959–970) followed the wording of the second edition of Elémens (cf. note 9 above). The remaining chapters 4, 5, 11 and 12 of Elémens may also originally have been written as entries for the Encyclopédie but ended up not being used in that work.

28 See Grimm’s Correspondance littéraire (iii, 104; 15 October 1755): 'le premier, parmi les Français, qui ait porté, dans les matières de commerce, la méthode et la philosophie'. A more critical gloss on this same aspect of Forbonnais’s writing is found half a year earlier (i, 318–319; March 1755): the Elémens ‘would have had much greater success, I believe, if the author would have dropped the airs of a philosopher and bel esprit, which he has surely adopted too much. In these matters [this attitude] should not get too popular. Detailed accounts are needed rather than reasoned principles, and examples instead of maxims’.

29 Alimento (2014b, 1060) establishes that Forbonnais first read Hume’s Essays some time between August 1752 and June 1753.

30 Significantly, Postlethwayt (1757, 87–109) would a few years later insert an English translation of precisely this part (cf. n. 15 above), which I will use here for quotations.

31 Translated from Forbonnais (1753c, civ): ‘La maxime est évidente que entre plusieurs nations, celle qui aura l’argent à meilleur marché, toutes choses égales d’ailleurs, ruinera les autres dans la concurrence’.

32 I believe it is correct to refer to Forbonnais’s view of interest as constituting an “opportunity cost” for traders, especially because of his explicit use of the conditional tense: ‘un négotiant commençoit par compter en dépense 1800 liv. par an sur la somme supposée pour l’intérêt que cet argent lui eût produit sur la place’ (Forbonnais 1753c, p. cv; emphasis added). Postlethwayt (1757, p. 88, emphasis added) translated the last phrase as ‘the Sum imagined for the Interest, which that Sum would have produced him on the Spot’. Forbonnais was hardly the first author to make such a statement, see e.g. the examples from the 17th century in Tucker (1960, ch. 2) but, as we will see (n. 76), in later writings he much enlarged upon this idea, plus the notion that the remaining difference between trading profits and interest on government securities, consisted of risk premiums.

33 Postlethwayt (1757, 90); ‘d’elle-même’ Forbonnais (1753c, cix).

34 Some aspects of Forbonnais’s discussion about the management of the reductions in the credit market are a little reminiscent of Cantillon’s account in the final chapter of the Essai. However, Forbonnais could have been obtained similar understanding of these operations from other British sources. In his notes to his translation of Child of 1752 Gournay had also emphasized the advantages that Britain drew from a well-developed public credit (in Tsuda 1983, 210–211). Of course these authors will also have studied the actual borrowing practices of the British government under the Pelhams. For a good discussion of these practices see Chamley (2011).

35 As we will in Section 4, 14 years later Forbonnais would use a similar kind of argument in his critique of Quesnay’s Tableau.

36 Postlethwayt (1757, 103) from Forbonnais (1753c, cxxxvi–cxxxvii). This passage referred to the effect from an inflow of money due to the discovery of a mine, but Forbonnais did not yet draw any significantly different conclusion for the effect of inflows due to a positive balance of trade: in both cases there would be a certain increased ‘briskness’ in trade which would give a passing ‘Motive to Industry’ but ‘as soon as the new Mass shall be distributed, in Proportion with the old, Commodities will be dearer, but the Circulation will not be the brisker’ (ibid.)

37 Murphy (1986b, 299–308) established that the Paris publisher Pierre-André Guillyn (1715–81) obtained a permission tacite for its publication. Recently Sabbagh (2016, 24–29) has noted that this permission was actually given to Guillyn and associates and that they may have subsequently sold this permission to the publisher Marie-Jacques Barrois (1704–69). In addition, he points out the difference between these publishers and the printer responsible for producing the first edition of the Essai. This, according to Sabbagh, was the veuve Godart who was based in Amiens and who was the printer for the Amiens Academy in which Gournay played an important role. These are useful additional facts, but in my opinion this does not bring us much closer to identifying the so far elusive person who edited a manuscript of the Essai (most probably the one preserved in the municipal library of Rouen) to prepare it for print and who was responsible for numerous small alterations (see Cantillon 2015, 15). This would not have been the widow Godart and it may be doubted whether Gournay himself would have had the inclination to undertake this job.

38 As shown by Tsuda (1983, 480), Gournay’s report, the Mémoire sur le travail des gens de mainmorte, was written in 1755, before 13 March, hence only a few months before the publication of Cantillon’s work. The passage in question, which evidently relies on Essai iii.1.4 (Cantillon 2015, 357 [E490]), reads: ‘ces dentelles qui sont que le produit du quart d’un arpent semé en lin occupe deux milles personnes’ (in Tsuda 1993).

39 Morellet (1821, i, 37). In a work originally written in 1764 Morellet wrote further that ‘from about 1750 the signal for this study [of political economy] amongst us was given by the edition of the excellent Essai sur le Commerce en général by Mr. Cantillon, the translations of some English works, like that of Child by the late Mr. de Gournay, and some other works written and published at the prompting of that respectable magistrate’ (Morellet 1775, 9–10). It is not clear from this passage whether Morellet meant to say that the Essai was edited as early as 1750 or that the various activities he mentions were set in train from about the beginning the decade. If he indeed meant the former, he may simply have been mistaken about the dates. Morellet was not a very early member of the group and was introduced to Gournay by his friend Turgot around 1755 (see Morellet 1821, i, 36).

40 In Cantillon (2015, 9–10) I argue that there is scant evidence for the view that multiple manuscripts of Cantillon’s Essai circulated in French literary circles in the decades between 1734 and 1755. Instead my hypothesis is that there existed just a single complete French manuscript, which was in Mirabeau’s possession from the later 1730s, from which he had made extracts for his personal studies, and which was subsequently returned to the original owner or his descendants in about 1753. Only after this it would have been passed on to Gournay, or to one of his protégées. Sabbagh (2016) correctly criticizes my imprecise statement in Cantillon (2015, 14) that no influence of Cantillon’s ideas is found in French works published prior to 1755. For clarity, I should of course have exempted the writings of authors belonging to the Gournay circle in the years 1753–5. Still, I cannot agree fully with what Sabbagh takes as evidence of influence of a reading of the Essai by Dangeul (see below this section, but also n. 47).

41 Murphy (1986b, 318) expressed a somewhat different view by surmising that Gournay changed his views on the beneficial effects of public credit due to his reading of the Essai. There appears to be little evidence to support this particular view.

42 The title page of the Essai of course exhibits similarities with other books associated with the Gournay circle, especially the same fictitious place of publication and publisher. However the text itself is completely devoid of editorial comments, apart from a single well-known footnote on p. 377, which commented on Newton’s presumed confusion between ‘essence and form’ (Cantillon 2015, 435). Another difference with other publications associated with the Gournay circle is that the Essai derived from an earlier manuscript that was already written in French, and hence was not a translation by a person belonging to that group.

43 The question what may explain the striking similarities between several of the monetary views of Cantillon and Hume is left to one side here. Hayek (1931) and, following him, Thornton (2007) are the foremost proponents of the view that Hume had in fact read and copiously borrowed from one of Cantillon’s manuscripts. Although the precise evidence in favour of this case does not appear fully convincing (see Cantillon 2015, 26, n. 18), this does not preclude the possibility that this is precisely what happened.

44 This work was published at the end of February, meeting with immediate success in France and abroad. In April 1754 Grimm’s Correspondance Littéraire noted that Dangeul’s book had sold out in days and that further prints were under way. At least three reprints and an augmented edition of the French work were published in 1754 alone. An English and a Swedish translation were published in the same year. In the next two years followed Spanish, Danish, German, and Italian translations. The English translation, used here for quotation, was based on the second French edition (see Dangeul 1754b, v).

45 My principal reason for saying this is that the order of Dangeul’s argument closely followed that of Hume’s ‘Of Money’. This order is as follows: (1) the paragraph that starts at the bottom of page 345 makes two points that are also found in the first paragraph of ‘Of Money’ namely (a) that in a country considered by itself the quantity of money ‘seroit indifférente’ (Dangeul 1754a, 346; ‘would be a matter of indifference’ [Dangeul 1754b, 231]; cf. Hume: ‘is of no consequence’) and (b) that, nevertheless, the amount of money a nation can command crucially affects it ability to wage war and defend its commercial interest; (2) the next paragraphs in both texts make the point that nations that are successful in trade see gold and silver flow into the country which eventually raises prices; (3) the following paragraph in both texts states that the rise in prices is further unnecessarily increased by the circulation of ‘Bank-bills, other paper-currencys of the Government, Companies &c.’ (Dangeul 1754b, 232); (4) finally, both Hume and Dangeul then devoted attention to the notion that the effect of an injection of additional money takes time to work through the economy (cited in the main text above). Given this same structuring of the argument over several pages in the two texts, it seems scarcely possible that Dangeul did not here take his inspiration from ‘On Money’.

46 ‘Dans un Etat bien peuplé, pour qui le Commerce & les Manufactures sont nouvelles, ou qui s’est ouvert un Commerce nouveau, l’importation de l’or & de l’argent est bien plus de temps à faire sentir l’inconvénient qui naît de son abondance; parce que à mesure que l’argent augmente, l’industrie se développe les besoins du luxe se multiplient, le nombre des ouvriers augmente, de nouvelles voies de Commerce extérieur s’ouvrent’ (Dangeul 1754a, 348–349).

47 Indeed there may be some other clues in the Remarques that Dangeul had read the Essai. Murphy (1986b, 315–316) points out a passage in Dangeul (1754a, 266–269) that, amongst other things, talked about the distribution of men across ‘countryside, market towns, villages and cities’. In addition, Sabbagh (2016, 7–8) highlights a passage (Dangeul 1754a, 28–29) about the loss of working days in Catholic France due to its many religious holidays. Both of these passages are indeed reminiscent of what Cantillon had written, although neither of these ideas was perhaps so unique to him. Murphy further suggests that it was Dangeul who wrote an anonymous review of the Essai in the Journal des sçavans, but this took place after its appearance in print.

48 Forbonnais first named Hume in the chapter ‘Of Luxury’ in Elémens (Forbonnais 1754b, ii, 238). Of course that does not mean that members of the Gournay circle did not want to be associated with Hume’s writings. On the contrary, as Charles (2008) shows, in 1754 Le Blanc used copious comments in his translation of Hume’s Political Discourses that included various references to French authors, amongst whom Forbonnais, to suggest ways in which readers should interpret and modify the views of the Scottish philosopher.

49 See Harsin (1928, 234, n. 1) who called the possibility that Forbonnais may have been indebted to Cantillon ‘troubling’, but rejected it since it was ‘unlikely’ that Forbonnais might have had access to the manuscript of the Essai that Mirabeau had had in his possession. Morrisson and Goffin (1967, 24) repeated the same view. These commentators were apparently not aware of Forbonnais’s involvement with the Gournay circle and of the latter with the publication of the Essai. Before Harsin, Monroe (1923, 185–186) had unwittingly pointed out the same parallels. Not realizing that the passages he was reading in Postlethwayt (1757, 335–340) about the stimulating effects of an additional monetary influx on the domestic economy, were in fact faithful translations from Elémens, Monroe commented that this ‘was probably inspired by some phrases of Cantillon’s’. See also below n. 74.

50 Hume, it should be remembered, had presented his economic views in a discrete set of essays that showed some coherence, but did not constitute a systematic economic treatise and, importantly in the present context, did not present the concept of circulation as fundamental to such a systematic account. Cantillon’s Essai did. Inter alia note that the title of Elémens chapter ix is identical to that of chapter 3, part 2 of Cantilon’s Essai and that the somewhat altered title of essentially the same text in the Encyclopédie section, De la circulation, du surhaussement & de l’abaissement des espèces, is in turn reminiscent of that of Essai chapter 6, part 2. See Cantillon (2015, 262 [E338]).

51 ‘If ‘tis a true Saying, that Money performs the same Functions in a Body politic, as the Blood does in the human Body, the Superabundance of the one, must be as dangerous as that of the other. The Science of Physic, teaches to maintain an Equilibrium among the Fluids; and the Skill of the Politician consists in establishing a Balance between the different Employments of the People. […] The Sea Ports are the Arteries of the Body politic, the capital City is its Heart, and the Plenty of Coin can never hurt it, if its Motions are regular and quick in the Circulation of beneficial Commerce’ (Postlethwayt 1757, 105–106 from Forbonnais 1753c, cxli–cxlii). This passage appears inspired by Melon (1736, 353–354) who had confirmed that the blood-money metaphor was by then a conventional trope: ‘the Body politic has often been compared to the human body: blood animates the one, money animates the other [etc.]’. Before Melon the metaphor figured, for example, in Vauban (1691, 561) and Law (1714, 605) and in Forbonnais’s generation it was used by, amongst others, Goudar (1756, 3, 176) Turgot (1770, 575), and Helvétius (1773, 2, 104–105). In view of this common usage, it is perhaps remarkable that Cantillon nowhere drew a comparison between blood and money circulation, preferring instead hydrological analogies. In Quesnay’s case too it should perhaps be said that, despite the emphasis given by various commentators to his medical background and the possible importance of this for his economic conceptions (see e.g. Sutter 1958, Foley 1973, Groenewegen 2001), it is actually surprising how little use he made of the analogy in his economic writings. It is true that Mirabeau in some places noted a similarity between the circulations of money and blood (see Mirabeau 1760, 54; Mirabeau 1763, 5, 24) and that his co-author Quesnay would probably have objected if he had been against the use of the metaphor. But one should be careful not to draw far-reaching conclusions based on the usage of this then conventional metaphorical language for the medical inspiration of specific novel economic conceptions.

52 Like other earlier authors, Cantillon had dealt with this topic too, most notably in Essai ch.4, part 3. In my opinion there are no strong indications that Forbonnais would have relied on that account, perhaps with the exception of the fact that when the latter considered the effects of change in the proportion units of gold (a) to silver (b) from a = 15b to a = 16b (Forbonnais 1754b, ii, 124–125) he used the same figures as the former (see Cantillon 2015, 428, [E584]).

53 ‘un échange des denrées contre les denrées’ (1754b, ii.138). For a similar point see Forbonnais (1753c, i, cxxxv).

54 Forbonnais (1753c, i, cxxxv) had already made the same point in a less elaborate way and, as was suggested above, had probably been inspired by Hume. However, I believe there is a small mystery with regards to the particular formulation we find in Elémens (Forbonnais 1754b, ii.140): it is rather closer to the wording found in Postlethwayt’s Dictionary entry ‘Barter’ (see Cantillon 2015, 204 [D250]). For a discussion of the relevant passage see van den Berg (2012, 19–21). As noted above n. 13, it is at least possible that Forbonnais knew Postlethwayt’s entry. But perhaps the former conceived of this formulation himself and the similarities with the passage in Postlethwayt’s entry might be a coincidence.

55 From Forbonnais (1754b, ii, 153–154). Note that this time a third cause of the increase in prices, that is, ‘by continually multiplying the Paper that passes current for Specie’ (see above Section 2.2) was not immediately considered. This case was relegated to the discussion of credit in chapter 10 of Elémens. The reason for this may be that, unlike Hume, Cantillon avoided actually calling circulating paper instruments money. To the latter this kind of medium was an alternative rather than an addition to (metallic) money. For a discussion of this difference between Hume and Cantillon see Le Maux (2014, 961).

56 In the French originals these passages read as follows (for the passage in Cantillon, on the right, the wording of the Rouen manuscript, rather than the printed text, is given, since on my hypothesis of Forbonnais’s early knowledge of the Essai, the former arguably offers the proper comparison):

Table

57 Cantillon’s description appears more detailed and Forbonnais follows the structure of the argument more than the exact wording. Still it may be worth noting two similarities in wording that are obscured when one only looks at the printed version of the Essai (see Cantillon 2015, 267, V348 a and f). First, where the print version of the Essai has ‘l’argent effectif’ at the start of the passage, the Rouen manuscript, like Forbonnais, simply has ‘l’argent’. Second, the print version suppressed the phrase ‘à leur Tour’, and Forbonnais used this same phrase in a striking nearby passage to emphasise the sequential nature of the effect of a monetary stimulus (see note 60 below).

58 It may be perhaps be contested whether the expression ‘le plus solidement’ (Cantillon 2015, 296) has the same meaning as ‘plus sûrement & plus promptement’ (Forbonnais 1754, ii, 156), but the views are surely very similar. Cantillon associated the influx of money from mining with the historical experience of Spain and Portugal, where this new wealth had given rise to a tendency to buy foreign goods, rather than develop domestic industry (Cantillon 2015, 272, [E353, E354]). Cantillon, it must be noted, was only one of many authors since Jean Bodin, who told this cautionary tale and Forbonnais wrote in various places about the same historical experience. See e.g. his comments on Montesquieu, book 21, ch.18 (Forbonnais 1753a, 124–127) and his account of the poor state of the Spanish economy in Considerations sur les Finances d’Espagne. Hume, of course, also distinguished between the increase in the supply of money due to the mining of precious metals and its increase due to a positive balance of trade, but he did not elaborate much on this distinction. Nevertheless, Wennerlind (2005) argues that the distinction is crucial for understanding Hume’s position.

59 Cf. Cantillon (2015, 275): ‘If an annual and continuous balance has brought about in a State a considerable increase of money it will not fail to increase consumption, [and] to raise the price of everything […] unless additional produce is drawn from abroad proportionable to the increased consumption’.

60 ‘Les ouvriers occupés par le travail de cette denrée se trouvant une augmentation de signe, établiront avec eux une nouvelle concurrence en faveur des denrées qu’ils voudront consommer. Par un enchaînement heureux, les signes employés aux nouvelles consommations auront à leur tour la même influence chez d’autres citoyens. Le bénéfice se repétera jusques à ce qu’il ait parcouru toutes les classes d’hommes utiles à l’état, c’est-à-dire occupés’ (Forbonnais 1754b, ii, 158–159). Even if Forbonnais derived inspiration from Cantillon about the gradual spread of wealth throughout the nation, there was certainly a difference in emphasis. Forbonnais’s distinction between ‘least useful’ commodities and ones of ‘greater use’ is related to his views about the relative importance of different social orders and economic activities. He asserted that the additional spending is only really beneficial to the nation if it eventually reaches the ‘class of men occupied in the production of useful and necessary commodities, [it] is that which ought to be strengthened most, because it supports all the others’ (Anonymous 1767, 174). Perhaps connected to this are Forbonnais’s views on social justice emphasized by Meyssonnier (1989).

61 ‘J’estime en général qu’une augmentation d’argent effectif cause dans un Etat une augmentation proportionnée de consommation, qui produit par degré l’augmentation des prix’ (Cantillon 2015, 266). The actual term ‘Cantillon Effect’ appears to have been introduced only by Blaug (1962, 21) to highlight the notion of a ‘differential effect of a cash injection, as governed by the nature of the injection’, but of course earlier historians of economics had already acknowledged its significance. See e.g. the discussion of Rist (1938, 286–287).

62 The word concurrence in this context clearly caused some trouble to the English translator(s). For example, the statement in Forbonnais (1754b, ii, 142) that ‘l’effet de cette circulation naturelle, est d’établir entre l’argent & les denrées une concurrence parfaite’ was translated in Postlethwayt (1757, 335) with ‘the Effect of this natural Circulation is to establish between Money and Commodities a perfect Rivalship’. In the alternative translation the last three words were replaced with ‘a perfect competition’ (Anonymous 1767, 170).

63 See Cantillon (2015, 203, comment i) for his frequent use of ‘altercations’. Curiously, whilst the Essai does not have the term ‘equilibrium’, used by Forbonnais in this context to indicate a balance in discrete market places between amounts of money and quantities of individual types of commodities, one does find a very similar usage of that word in the Postlethwayt version of Cantillon’s chapter (ibid. 196 [D241] and 202 [D248]). This version was included in the entry ‘Barter’ of Postlethwayt’s Dictionary, which was included in an issue first published by the third week of March 1752. Cf. n. 13 above.

64 ‘Il paroît donc que le commerce étranger, dont l’objet est d’attirer continuellement de nouvel argent, travailleroit à sa propre destruction, en raison des progrès qu’il fait dans ce genre, & dès-lors que l’état se priveroit du bénéfice qui en revient à la circulation’ (Forbonnais 1754b, ii, 172).

65 Forbonnais (1754b, ii, 174) ‘seroit revêtue de toutes les forces dont elle est susceptible’. Sonenscher (2007, 184) and Hont (2008, 273) each give their own interpretations of Forbonnais’s more optimistic response to Hume in what they see as part of the ‘rich country-poor country’ debate. While both also discuss Cantillon in the context of their wide-ranging theses about these debates, neither perceives a connection between the writings of that author and those of Forbonnais.

66 Blaug (1962, 21–22) emphasized the difference between Hume and Cantillon about the possibility of taking precious metals out of circulation. Forbonnais could be said to side with Cantillon on this point. A minor point is that the manuscript version of the Essai has the word resserrer instead of the word retirer (Cantillon 2015, 299, V401c). As will be seen presently, Forbonnais gave the former word much import in his views about interest rates. Also, Cantillon’s view (2015, 299 [E402]) that ‘it is not easy to discover the time opportune’ for adopting policies to reduce money circulation appears to be echoed by Forbonnais’s opinion that it would be ‘impossible to determine in what length of time the bulk of signs may increase in a state to such a degree as to interrupt its foreign trade’ (Anonymous 1767, 180; Forbonnais 1754b, ii, 176).

67 Whilst in the Elémens Forbonnais uses the adjective ‘natural’ where Cantillon used ‘simple’, in his later Principes he adopted the term ‘simple circulation’ to distinguish it from ‘compound circulation’. By that time however further changes in his conception of circulation had occurred (below Section 4).

68 ‘quelques propriètaires de l’argent fassent des amas de la quantité superflue à leurs besoins’ (Forbonnais 1754b, ii.144). The reasons Forbonnais mentioned for the greater suitability of precious metals for hoarding were quite conventional; other commodities were ‘liable to greater inequality in their goodness’, ‘may be destroyed more easily than metals’, precious metals ‘may be hid in case of invasion by an enemy, or of troubles at home’ and ‘may be more easily conveyed into another country’ (Anonymous 1767, 170).

69 ‘Pour rappeller cet argent [resserré] dans le commerce, ceux qui en auront un besoin pressant, offriront un profit à ses propriétaires pour s’en désaisir pendant quelque tems. Ce profit sera en raison du besoin de l’emprunteur, du bénéfice que peut lui procurer cet argent, du risque couru par le prêteur’ (Forbonnais 1754b, ii.145–146).

70 ‘les Hommes nécessiteux doivent avoir dans les commencemens tenté les Prêteurs par l’appas d’un profit; et ce profit doit avoir été proportionné aux nécessités des Emprenteurs et la crainte et à l’avarice des Prêteurs’. Note the similarities in formulation with the passage from Elémens quoted in the previous footnote: both first mention ‘needy’ borrowers who have to tempt lenders with a ‘profit’; both then state that the profit will be ‘proportionate’ to the need of the borrower and the fear of the lender. In fact, both authors refer to this account as the original emergence of the practice of interest payments: Cantillon (2015, 322): ‘Voilà ce me semble la premiere source de l’intérêt’; Forbonnais (1754b, ii, 147): ‘Telle a été, ce me semble, l’origine de l’usure ou de l’intérêt de l’argent’. It seems hard to imagine that this set of similarities of expression could occur without Forbonnais having read the Essai.

71 Cantillon (2015, 248) pays some attention to hoarding, but only in the context of his estimation of the proportion between money in circulation and total incomes. In the chapter on interest rates, on the other hand, he is extremely vague about the identity of lenders and the origins of their massed wealth, merely referring to ‘anybody who is willing to lend money’ (quiconque voudra prêter de l’argent). For a further discussion see van den Berg (2014, 630).

72 See Forbonnais (1754b, ii, 147–148) consequences 1, 2, 6, 8.

73 See Meek (1962, 319–320) and Johnson (1966, 626) who note that Quesnay shared his disapproval of the hoarding of money with an array of contemporary and earlier French authors. Of course this was true for British writers too (see e.g. Viner 1937, 45–48). However, there was no agreement amongst these authors about the importance of this phenomenon and perhaps none, apart from Forbonnais, used it as an explanation for the existence of interest. For an alternative interpretation of the originality of Forbonnais’s analysis of interest see Duflos de Saint-Amand (2011).

74 Schumpeter was here referring to Postlethwayt (1757, 336–337). Perhaps he was first alerted to the passage by a reading of Monroe (1923, 185–186) or Viner (1937, 47–48). The former had already flagged up to his readers as being ‘quite unique’, the theory of “Composite Circulation” according to which ‘[i]n order to bring the hoarded money back into trade, people in great need will offer to pay for the use of it, and thus arises interest as part of the expenses of every undertaking’. Viner, in turn, called ‘curious’ the argument of ‘Postlethwayt’ that ‘lending of money at interest involved hoarding’. Neither Monroe, Viner, nor Schumpeter realized that Postlethwayt had plagiarized the passage in question from Forbonnais and this may have prevented them from exploring it further. In addition, the former two historians wrote before Keynes developed his views on liquidity preference in the General Theory, so they could not have made the association that Schumpeter made.

75 This could well be the reason that Forbonnais ignored Cantillon’s qualification that although ‘the needs of the borrowers and the fear of avarice of the lenders’ appeared to be merely ‘the origin of interest. But [in modern times] its constant usage in States seems based upon the profits which the undertakers can make out of it’ (Cantillon 2015, 323). This appeared to be a hint at quite a different kind of explanation of interest, more similar to that of ‘classical’ political economists. However, one should be careful not to read too much into it, since as Aspromourgos (1989, 370–371) pointed out, the causation from profit to interest is ambiguous in a number of other places in the Essai.

76 ‘lorsqu’il sera facile de retirer un profit ou un intérêt du prêt de son argent, il est évident que tout homme qui voudra employer le sien à une entreprise quelconque, commencera par compter parmi les frais de l’entreprise ce que son argent lui eût produit en le prêtant’ […] ‘il n’est aucune de ses branches à laquelle la réduction des intérêts ne donne du mouvement. Toute terre est propre à quelqu’espece de production: mais si la vente de ces productions ne rapporte pas autant que l’intérêt de l’argent employé à la culture, cette culture est négligée ou abandonnée’. […] ‘Le même raisonnement doit être employé pour l’établissement des manufactures, pour la navigation, la pêche, le défrichement des colonies. Moins l’intérêt des avances qu’exigent ces entreprises est haut, plus elles sont réputées lucratives’ (Forbonnais 1754b, ii.146–147 and 161–162). The first passage was in fact added only from the second edition onwards, but since the idea expressed in it was almost identical to what Forbonnais had written in Négotiant Anglois (see above n. 32), this seems to have little significance.

77 This view was even more fully expressed in volume 6 of Forbonnais’s massive historical study of 1758, especially pp. 55–75.

78 The differences between the theories of capital and interest of Forbonnais and Turgot are discussed in more detail in van den Berg (2019).

79 ‘the people who possess most [money hoards], are masters of those who know not how to reduce it to its true value; […] It is of importance to deprive one’s rivals of the means of becoming powerful, because that is gaining relative strength’ (Anonymous 1767, 180; Forbonnais 1754b, ii, 176). Cf. Cantillon (2015, 163): ‘Gold and Silver are the true reserve Stock [Corps de réserve] of a State, and the larger or smaller actual quantity of this Stock necessarily determines the comparative greatness of Kingdoms and States’.

80 From Forbonnais (1754b, ii, 181). For similar reflections see Cantillon (2015, 304). Postlethwayt (1757, 358) added a rare note of his own to this view of Forbonnais with a reflection inspired by the fears of French continental conquest at the beginning of the seven years’ war: ‘Does it not follow, that the more we increase our Public Debts, the more we put ourselves in the Power of Foreigners to ruin us of a sudden? If France possess Holland, may they not oblige the Dutch to draw all their Money out of our Funds?’

81 To English readers this ‘interview’ was made famous by Ronald Meek who started his influential The Economics of Physiocracy with this historical encounter (see Meek 1962, 15–18). The sole source for this first meeting is a letter Mirabeau wrote to Rousseau ten years after the event. In the letter Mirabeau is in proselytizing mode, portraying the meeting as a ‘conversion’ from his earlier mistaken adherence to Cantillon’s view’s to the true doctrines of Quesnay. Meek was right to point out that Mirabeau is likely to have ‘exaggerated the extent to which this interview changed his fundamental ideas’. In fact Quesnay may have sought out Mirabeau not only for the fame L’Ami des hommes had recently brought the latter, but also because he recognized the frequent borrowings from Cantillon’s Essai in that work. For Quesnay’s reference to Cantillon see Quesnay (2005, 185 n. 34).

82 These letters, dated 1 and 14 September 1758, were first published in 1958 and reproduced, with corrections to the transcription, in Quesnay (2005, ii, 1173–1180). The editors surmise that it was Quesnay who initiated contact with Forbonnais earlier in 1758, through the intermediation of Etienne-Claude Marivetz (1731–1794) with whom Quesnay collaborated in writing Questions intéressantes sur la population, l’agriculture et le commerce, which was published in June 1758 (ibid. i, 332–333 and ii, 1173). In that piece there are references to Forbonnais’s entry ‘Culture de terres’ in the Encyclopédie (ibid. 342) and his Recherches sur les finances (ibid. 342 and 378). The first letter starts with a mention of an earlier, unknown, letter from Forbonnais to which it is a reply.

83 In the first letter the following passage is found, which reminds of Cantillon’s concern in Essai, part ii chapters 3 and 4, with establishing the proportion between the amount of money required for circulation and annual production: ‘I leave here to one side the question of the greater or smaller [quantity] of coined silver in a kingdom, which must have a relation with the rapidity or slowness of its circulation [that is] required for the purchases and sales of labour or commodities according to their market value and their quantity, which alone really constitute the greater or lesser [amount of] annual wealth in a State, and not the greater or lesser rapidity or slowness of the circulation of the pecuniary mass [whether] more or less abundant’ (Quesnay 2005, ii, 1174; my translation).

84 Forbonnais (1767, i, 161–162) would provide what long remained the most detailed description of this publication. In 1905 it provided Schelle with confirmation that he had found a ‘third edition’ (see Meek 1962, 127). Subsequently Kuczynski rediscovered it, as recounted in Kuczynski and Meek (1972). Somewhat oddly Forbonnais stated that this edition, which he presumed to have been the first one, was published ‘5 or 6 years’ earlier. This dating makes sense if Forbonnais already wrote his Principes in 1765, as argued by Orain (2012, 87). It may also be noted that Forbonnais actually used for his discussion of the technical details of the Tableau the version that appeared in the sixth part of L’Ami des hommes, which was published in 1760 (see van den Berg 2002, 312 n. 20).

85 Boyer’s argument is well made and he is careful to acknowledge that in ‘Grains’ Quesnay’s views were still in a formative phase. Meek (1962, 267) argued similarly that between Quesnay’s writing of ‘Fermiers’ and ‘Grains’ a crucial ‘change of atmosphere’ occurred, but, different from Boyer, he ascribed this more specifically to the influence of Cantillon. In Meek’s view this influence of the Essai on Quesnay’s writings was most pronounced in ‘Grains’, ‘Hommes’ and ‘Impôts’, all probably written in 1757 (see Quesnay 2005, 213). For a similar interpretation see McNally (1988, 104–105).

86 Weulersse (1910, i, 122) notes that as late as 1764 a letter written by Forbonnais about the grain trade that had been published in the Gazette du commerce was taken by Dupont as support for the physiocratic position when he included it in his Exportation des grains.

87 This is not the place to reconstruct the full details of a crucial polemic that was mostly fought out in the journals. For some of the contributions by supporters of Forbonnais and the man himself see van den Berg (2002, 312 n. 28). For responses by physiocratic authors, including Quesnay himself see Quesnay (2005, ii, 1115ff).

88 Each of the two volumes of this long work had two parts. Part one, volume one (i–iii, 1–160) had the same title as the work as a whole. Part two, volume one (161–338) was entitled Observations sur le Tableau OEconomique. Part three, volume two (1–242) was called Observations sur divers points du sistême contenu dans les articles Grains & Fermier de l’Enciclopedie, dans le prétendu Extrait du OEconomie Roïales & ailleurs. Finally the shorter part four, volume two (243–284), was a Précis historique du Cadastre dans le duché de Milan.

89 ‘La distribution des salaires par les propriétaires des terres, peut consister dans une tradition réelle d’une certaine quantité de denrées, ou dans une quantité de monnoïe établie pour être le moïen terme d’évaluation des échanges’ […] ‘celui qui reçoit la récompense des ses services se trouve en état de récompense lui-même ceux dont il a besoin. C’est cette communication réciproque, soit des denrées soit de leurs signes, qui constituë le commerce ou la circulation, soit dedans d’un païs, soit au dehors’.

90 At the risk of reading too much into this passage, there are elements that are especially reminiscent of Essai I, xiv, 1–2 (Cantillon 2015, 132 [E139–140]). For example, the peculiar expression that landowner may pay his workers according to ‘une tradition réelle d’une certaine quantité de denrées’ may echo the customarily determined payments by the land owner to his workers before the introduction of money assumed by Cantillon in E139.

91 Given our thesis that Forbonnais had had access to Cantillon’s work even before its publication in print, the fact that a copy of the Essai was present in Forbonnais’s library is perhaps not so crucial, although still noteworthy. See Morrisson (1967, 23, n. 7) and Alimento (2006).

92 Also: ‘Lorsqu’il se sera formé des proportions générales de compensation intrinsèque entre les denrées, les variations qui surviendront sur chacune produiront cherté ou bas prix. La denrée chere se balancera avec une plus grande quantité d’autres denrées que de coutume; dans le bas prix avec une moindre quantité’. [‘When general proportions of intrinsic repayments have established themselves between the commodities, the variations that occur to any of them will cause high or low prices. The expensive commodity will balance itself to a greater quantity of the other commodities than usual; the cheap one to a lesser quantity’. Admittedly, Forbonnais does not adopt Cantillon’s notion of intrinsic value more specifically, that is, by explaining it in terms of quantities of land used. But the description of variations of the prices of commodities around their intrinsic values are surely close enough to Cantillon (2015, 96 [E74]) to be confident that this is not a coincidence. By the way, Forbonnais had already used the term ‘intrinsic value’ on a few occasions in Elémens (see Forbonnais 1754b, i, 329, 350 and ii, 269), but apart perhaps from the first of these three instances the meaning he had then conveyed by that term differed from Cantillon’s usage.

93 He argued that if the population of a country exceeds the food supply, then periodically part of the population will die of hunger, adding in a footnote ‘this is what happens from time to time in China, and this is what produces a great crime against nature’. The latter appears to be a reference to infanticide, which also occurs in Cantillon (2015, 140 [E151]). Admittedly, this observation about China was common during the 18th century (see ibid. 141, [C151ii and iii) and might also owe something to Melon (1736, 382–389). For a longer discussion van den Berg (2016, 6–13). Also see Forbonnais (1767, i, 46): ‘dans un païs isolé il y auroit entre le nombre des hommes attachés à la production territoriale quelconque & la population un rapport nécessaire & qui existera aussi longtems que l’état de la production restera le même’. [‘In an isolated country there would be a necessary ratio between the number of men attached to agricultural production of any kind and the [total] population and it would exist as long as the state of production will remain the same’].

94 ‘Ainsi une société gagne si elle parvient à retirer d’une moindre étenduë de terrain, la même quantité de productions emploïées dans ses échanges avec l’étranger: & elle perd au contraire si elle vient à employer une plus grande étenduë de terrain pour échanger la même quantité de productions étrangeres’. [‘Thus a society gains if it manages to draw from a smaller extent of land, the same quantity of products employed in its foreign trade; and, on the other hand, it loses if it manages to use a larger extent of land to exchange the same quantity of foreign products’]. Similarly the discussion of this same theme on pages 125–127 of volume 2 is strongly reminiscent of Cantillon (2015, 356 [E487]). In Philosophie rurale (1763, 141–142) Mirabeau and Quesnay had explicitly rejected Cantillon’s argument that a country that specialized in labour intensive manufactures would benefit in foreign trade with a country that specialized in ‘land intensive’ agricultural products (see Cantillon 2015, 367). Forbonnais, without naming Cantillon explicitly, here sided with him.

95 ‘un excédent de population au-delà de sa proportion naturelle ou accidentelle’. Cf. Cantillon (2015, 156 [E179]).

96 ‘modifications étrangères à l’ordre naturel’

97 ‘toutes les denrées ne haussent pas de prix à la fois; la concurrence modère le bénéfice; & le bénéfice occasionne de nouvelles productions; de manière que la quantité des denrées s’étend en raison de l’accroissement de la masse numéraire, surtout dans un païs où il y a beaucoup à faire’. The final phrase was further emphasized in a note on p. 135: ‘One of the major reasons that have led some Authors to regard the acquisition of money as unfortunate [fâcheuse] is that it would destroy production by making commodities more expensive. Those persons have not understood the difference between a country that cannot improve itself further and one that can’. It should be noted that very similar comments can be found in the ‘reflections of the translator’ of a new translation of Hume’s Political Discourses of 1767.

98 ‘l’argent a produit un revenu à son propriétaire. Il a donc usurpé par fiction la qualité d’immeuble & celle de richesse’. Here the word immeuble clearly did not have the modern French meaning of ‘building’. Rather Forbonnais probably attached to it the more abstract meaning of ‘a thing that does not move’, which fits well with his earlier views on money hoarding. See above Section 3.2.

99 ‘dans tous païs où il n’y auroit pas d’emprunts publics, le profit de l’argent seroit réglé par la nature même des choses sur un pied proportionné aux profits de la culture & de l’industrie’.

100 This speed with which money ‘returned to the distributors of the original revenue’ (i.e., the landowners) depended for example on how far away from their lands, where the rents were produced, the grands propriétaires lived and spent these incomes, and how quickly or how slowly the state spent the tax income it raised (Forbonnais 1767, i, 212). As we saw (n. 83 above) in 1758 Quesnay still appeared to agree with Forbonnais that it would be difficult to put a value on the amount of money required for circulation but by the time he had produced the ‘Third edition’ he had settled on the assumption that this amount would be equivalent to the size of the produit net (Quesnay 2005, 418; English translation in Meek 1962, 134).

101 He argued that ‘the conclusion of the system [of the rural philosophy] is that one should not fight offensive wars; but at the same time they acknowledge [the need for] a system of equilibrium [between nations]. Yet to maintain [such an equilibrium] one has to protect and support [one’s interests] in an offensive manner; and a state that would never be on the offensive would forever be forced onto the defense’ (Forbonnais 1767, i, 294). He sarcastically advised the économistes to organize a ‘perpetual congres’ between nations in which they could impartially settle disputes. Elsewhere (ibid. i, 55, 69, 113, 148) he offered a number of interesting reflections on the cosmopolisme of the physiocrats. Since the natural state of international relation was one of ‘suspicion and anxiety’, it was not realistic ‘to administer the economic matters of a state that has external relations according to the sole principles of the natural order of things’.

102 In Grains, for example, Quesnay had done this by willfully using Spain as an example of a nation that had seen a huge inflow of precious metals without it resulting in a prosperous economy. This according, to Forbonnais, proved nothing because ‘nobody is ignorant that the effects of money introduced in a country by labour are very different from the effects of money introduced by the excavation of mines’ (Forbonnais 1767, ii, 137–139)

103 For a book-length study of this Class see Staum (1996).

104 Of course Forbonnais and Quesnay were not be the only significant French readers of the Essai. Other interpretations, more interesting for aspects that are not the topic of the current paper, were given for example by the brothers Mably and Condillac.

105 The latter difference between Quesnay and Cantillon is spelled out in detail in a fascinating long letter from Dupont to Schlettwein (dated 16 September 1771) after the latter had had the temerity to name Cantillon’s work, and that of Davenant, in the same breath as the works of the économistes’. (See document W2-4582 at the Hagley Museum and Library, Wilmington, Delaware). I thank Gabriel Sabbagh for bringing this letter to my attention.