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Abstract
J.-J.-L. Graslin, an ‘anti-economist’, who fundamentally criticized physiocratic doctrine, and N. Baudeau, described as a ‘blind enthusiast’ of Physiocracy, started an open controversy in journals over the value of the processing industry in 1767. The purpose of this paper is to clarify the historical significance of their short-term controversy and Graslin’s far-sighted subjective theory of value confronting Physiocracy. As with other physiocrats, Baudeau insisted on the sterility of industry because it does not produce any net product. Baudeau argued that the value of a processed product was composed of two values: the value of materials and that of food for labour. By contrast, Graslin maintained that the value of labour must be considered separately from the value of food for labour. According to Graslin, labour that processes raw materials generates new value beyond the value of those materials, in the same way that agricultural labour generates value; therefore, the former type of labour is not sterile. The controversy symbolizes a preliminary confrontation between the upcoming cost theory of value and the subsequent subjective theory of value. On the latter, Graslin produces a table similar to Carl Menger’s table of needs satisfaction.
Acknowledgements
This paper was presented at the 2018 Conference of the History of Economic Thought Society of Australia in Perth, hosted by the University of Western Australia and Curtin University. I really appreciate the warm comments at the conference, helpful advice from the anonymous referees, and kind support from the editors.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 It has a long title: Correspondance entre M. Graslin, de l’Académique de S. Pétersburg, Auteur de l’Essai Analitique sur la Richesse & l’Impot. Et M. l’Abbé Baudeau, Auteur des Ephémérides du Citoyen. Sur un des Principes fondamentaux de la Doctrine des soi-disants Philosophiques Économistes (Correspondence between Mr. Graslin, St. Petersburg Academy, Author of the Analytic Essay on the Wealth and the Tax. And Mr. Father Baudeau, Author of Citizen Ephemeris. On one of the Fundamental Principles of the Doctrine of the so-called Philosophical Economists).
2 Jean-Joseph-Louis Graslin (1727–90) was born in Tours. After finishing his education for the legal profession in Paris, he started his career in Saint-Quentin. He was assigned to be the Parliament barrister and tax officer general in Nantes in 1758. Graslin’s economic studies mostly appeared between 1766 and 1768. He is known as a contributor to the development of Nantes and the Loire basin (Citation[1768]2008).
3 Nicholas Baudeau (1730–92) was born in Amboise. He joined the abbey in Périgord at the age of 20 and then became a canon regular. He moved to Paris in 1758, and then wrote papers on public finance and poverty, which were his concerns. Baudeau converted to Physiocracy in 1766 probably because he believed that the physiocratic idea of the natural order would defeat poverty. These circumstances surrounding his participation with the physiocrats are explained in detail in Clément and Soliani (Citation2012, 30–1).
4 ‘Graslin’s reputation was never what it should have been because he put so much emphasis upon criticism of the physiocrats – which is in fact the best ever proffered – that his readers were apt to overlook his positive contribution. Actually, his Essai Analytique presents the outlines of a comprehensive theory of wealth as a theory of total income rather than of income net of all producers’ expenses including wages – a not inconsiderable improvement considering the role the latter was to play later on. Also he was above his contemporaries in insight into the problem of ‘incidence of taxation’ (Schumpeter Citation1954, 175). ‘His correspondence with Baudeau is of considerable interest’ (175, footnote 7).
5 Graslin’s Essai Analytique was submitted to the prize essay contest organized by the Royal Society of Agriculture of Limousin, adjudicated by Turgot, Intendant of Limousin. The subject of the competition was ‘the effect of consumption tax on the proprietor’. Turgot as a referee criticized Graslin’s controversial views, since Graslin’s Essai Analytique was not in line with Physiocracy (Turgot Citation[1767] 1914).
6 In that year Quesnay’s Tableau économique was published.
7 David Hume (1711–76) stayed in Paris from 1763 to the beginning of 1767 and had contact with physiocrats.
8 Abbé André Morellet (1727–1819) was a physiocrat, however, he kept a certain distance from enthusiastic partisans. He translated Smith (Citation1776) into French and left a prospectus for the planning of a new commerce dictionary (1769).
9 ‘I see, in your leaflet, you don’t care to disoblige your economists … I expect that, in your work, you would strike them by lightning, squash them, crush them, and reduce them to dust and ash! They are the strangest and the most arrogant group among those who exist today after the annihilation of the Sorbonne’ (letter from Hume to L’abbé Morellet – 10 July 1769) (Hume Citation1888, 183–8).
10 Tableau fundamental (1758). Later, Tableau abrégés (1763) and Tableau formule (1766) were issued.
11 Dupont de Nemours argued the effect of free trade in line with the physiocratic policy in his De l’exportation et l’importation des grains (Citation1764). He edited Quesnay’s works and titled it Physiocratie (1768).
12 Graslin cited this from Le Mercier de la Rivière Citation[1767]1910, vol. 2, 403, chapter 43 titled ‘The industry is not productive at all: demonstration of this truth’.
13 Graslin did not claim that the processed linen had a value by itself.
14 Graslin’s intention with this point seems to be that the net product attributed to each class or sector cannot be substituted for another net product.
15 Setier is an old volume unit of grain.
16 Baudeau ‘has been depicted as the zealous prototype of the disciple … However, all too often we forget that, before becoming one of Quesnay’s apostles, this [Baudeau’s] exalted mind was a staunch opponent of physiocratic doctrine … He [Baudeau] was the champion of the rural lifestyle, not the defender of agricultural capitalism. Nor was he the promoter of free trade as in the physiocratic theory’ (Orain Citation2015, 355). For all the above observation, Baudeau seems to ‘defend the orthodox ideas of Quesnay’ in Correspondence.
17 The opinion of F. Galiani, which opposes the liberalization of the international grain trade, in Dialogues sur le commerce des blés (Citation1770), basically conforms to Graslin’s.
18 For instance, ‘the 1st’ is food, ‘the 2nd’ is clothes, ‘the 3rd’ is dwelling, ‘the 4th’ is farming implements in a primitive society, then, objects from the 5th to the 10th represent conveniences and luxuries.
19 A muid of wheat is equivalent to around 1,872 litres.
20 The word ‘marginal’ was first introduced by P. H. Wicksteed in his Alphabet of Economic Science in 1888 (Howey Citation1972, 297). The term was not used even in the 1870s. Howey focuses on the marginal concept from the nineteenth century and consequently does not recognize Graslin’s Essai Analytique in the eighteenth century.
21 The above discussion naturally leads to an examination of its relationship to Turgot, who is considered to be one of the most significant contributors to utility theory. In Valeurs et monnaies ([1769]1919), Turgot explains that once hungriness is satisfied, a man will become aware of another need in the next grade:
When the savage is hungry, he values a piece of game bird rather than the best bear skin; but, when his appetite is satisfied and he feels cold, it will be the bear skin that becomes valuable to him. (Turgot [1769]1919, 85)
Turgot explains that a new need arises after the satisfaction and the saturation of a previous need, showing his recognition of Graslin’s Essai Analytique. However, Turgot uses the concept of ‘saturated need’ and ‘subsequent need’ similar to F. Galiani’s discussion, whereby ‘as soon as a desire is settled, another desire stimulates man with the same intensity’ (Galiani Citation[1751]1803, 61).
22 ‘Menger nowhere concerned himself with ascertaining relative maximum values of total satisfaction, or minimum values of marginal satisfaction’ (Endres Citation1997, 30).
23 Clément and Soliani (Citation2012) suggest that Baudeau’s approach to capital and capital formation was quite unorthodox, since he applied the physiocratic approach to surplus in agriculture. Landlords were considered to belong to a capitalist category as long as they provide advances to agriculture (30).
24 While Turgot criticized Graslin’s Essai Analytique (Turgot Citation[1769]1914), he would not have written Valeurs et monnaies without reference to Essai Analytique.
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Notes on contributors
Eiko Yamamoto
Eiko Yamamoto, Ph.D. in Economics from Waseda University in March 2020.