Progress pill
The Rise of Freedom: From the Renaissance to the Enlightenment

Plea for Economic Freedom

A Philosophical History of Freedom

Plea for Economic Freedom

  • Against Colbertism
  • The Benefits of the Free Market
Economic liberalism is often associated with an Anglo-Saxon tradition, stemming from Adam Smith. It is contrasted with "political liberalism," which is said to originate from the Continental Enlightenment, particularly in France. This view is incorrect.
It was in response to mercantilism and, more broadly, to the ideas of the Ancien Régime that economic science emerged in France. With the Enlightenment came a period in which philosophers began to call themselves "economists." These were the physiocrats.
They laid the foundations of liberal economics. The main representatives of the physiocratic school are François Quesnay, the Marquis de Mirabeau, Lemercier de la Rivière, Abbé Nicolas Baudeau, Louis-Paul Abeille, and Pierre-Samuel Dupont de Nemours.
Political economy, Dupont de Nemours summarizes, is the science of natural law applied to civilized societies. (Correspondence with J.-B. Say).
They advocated for "Laissez-faire," which recommends that the state should not intervene in the economy.
From this point, two very different conceptions began to emerge within the Enlightenment:
  • On one hand, some believe that this social harmony must be artificially achieved and through the constraint of the State; these are the theories of the contract. On the other hand, some believe that governance can be achieved through interests, meaning allowing individual interests to harmonize within the framework of rules of the game that are known and accepted by all; these are the market theories.

Against Colbertism

This phrase appeared when Jean-Baptiste Colbert, the principal advisor to Louis XIV, asked merchants one day: "What can I do for you?" One of them, named François Legendre, replied, "Let us do it!"
The phrase was adopted by the Physiocrats, François Quesnay, the Marquis d'Argenson, and then by Vincent de Gournay: "Laissez-faire, laissez passer." It became their motto.
Referring to natural law (the term originates from phusis, meaning nature, and cratos, meaning power or rule), the physiocrats believed that there are economic laws that do not depend on political or religious power, but rather on the very nature of humans and society. The economic order is the natural order of societies. Political power must submit to it. The Physiocrats sought to demonstrate that mercantilism, the prevailing economic policy in France as well as in England, was not only inefficient but also immoral. Colbert was one of the first modern statists. He was convinced that governmental regulation could generate national prosperity. The State acted as banker, merchant, and provider. It controlled the currency, directed trade, and redistributed wealth. According to Colbert, the goal was to increase wealth by encouraging industry. He also added, "France can only enrich itself at the expense of England and Holland."
On the contrary, for the Physiocrats, free trade was the only good economic policy because it was a positive-sum game, and the economy was governed by natural laws that should not be disturbed by arbitrary rules.

The Benefits of the Free Market

Until the French Revolution, society was characterized by an aristocratic economy based on gift and privilege. Arbitrary actions and vexations made market access difficult for ordinary citizens.
However, since the Middle Ages, as we have seen, the market economy has developed. Merchants became wealthier and gained increasing economic freedom.
The market is about voluntary exchange at a negotiated price. The market enhances the material, intellectual, and political conditions of everyone by enabling the acquisition of spaces of autonomy and initiative.
Indeed, humans naturally want to improve their own condition and that of their loved ones through the exchange of goods and services. Hence the desire of these new philosophers, the "economists," to enable the people to procure for themselves a sufficient income and thus to achieve what Kant calls in his pamphlet What is Enlightenment? their "majority," their autonomy of decision and action.
For the Physiocrats, freedom does not divide. Fighting political privileges and combating economic rents are one and the same. The great novelty of modern economists at the dawn of the 18th century was that they focused on each individual to restore their capacity for action while considering how to contain passions and interests through the free market.
Indeed, how to make coexist men with divergent interests? What to do if men enter into conflict, if they make mistakes, if they are greedy and selfish?
The Physiocrats answered in three stages:
  1. It is the freedom of contracts that allows for the resolution of conflicts of interest, not the social contract, which is a pseudo-contract since it cannot be broken. Analyzing social problems in terms of market and exchange enables us to view relationships between individuals and between nations as a positive-sum game, addressing both the issues of institutional and regulatory frameworks in society by asserting that need and interest alone govern the relationships between people.
  2. Natural freedom is the right to dispose of oneself and one's possessions. Therefore, the harmony of interests is possible based on respect for legitimate property, which is acquired through labor and stems from the use of our faculties. And it is this freedom based on property that is the key to the social problem, not the constraint of law.
  3. The role of the State is to enforce contracts and guarantee the security of people and property. This is the famous "Laissez faire," the motto of the physiocrats. The State governs better when it governs less and allows individuals the freedom to take initiatives and assume their responsibilities.
In short, if everyone can freely pursue their private interest in respect of natural law, the peace and prosperity of all will be better ensured than by a political organization that would define the general interest from above and impose it through the constraint of law. Political freedom is a useful thing, but it is not enough to give individuals the autonomy of decision and action they need. Such is the lesson of the physiocrats. The French liberal school of the 19th century, with figures such as Say, Constant, Dunoyer, Bastiat, and Molinari, will remember this and brilliantly defend this heritage against the emerging socialism.
Quiz
Quiz1/5
What is the motto of the Physiocrats?