Just like mercantilism, which is its most obvious practical manifestation, Montaigne's sophism took a long time to disappear.

That sophism is the idea that trade and exchange are zero-sum games. Whatever one party gains in a transaction is necessarily lost by the other party. Its supporters argue that this holds true both between individuals and between nations.

Abbot of Condillac played a major role in definitively dismantling this false idea.

"Definitively" is perhaps an exaggeration, because in public debate, this sophism frequently reappears. This is perhaps why, moreover, Condillac remains a little-known economist. Apart from Austrian economists, few have understood the importance of his theory of exchange, no one takes interest in him anymore.

For most historians of economic thought, the year 1776 is marked by the publication of The Wealth of Nations, which founded economic science. The fifteen lessons we have just completed, in which we have studied French economic science before Adam Smith, are enough to prove the error of this conception. In that same year 1776, moreover, another book perhaps deserves more praise from historians than Adam Smith's book: it was written by Condillac and is simply titled Commerce and Government Considered in Their Mutual Relationship.

For Condillac, if the sophism of exchange seen as a zero-sum game persists, the Physiocrats are partly to blame, because they maintain that exchange is a relationship of equality. According to Condillac, this is false: exchange is an unequal relationship, where one always gives less to obtain more.

Between the ideas of the Physiocrats and those of Condillac, one could not dream of a more perfect opposition. The Physiocrat economist Le Trosne wrote:

Condillac, on the other hand, wrote:

However, the opposition is largely one of words. Both agree that when one exchanges a franc for a book, the book is worth a franc, or the price of the book is a franc.

The difference lies in the fact that Condillac asserts that since we exchange a franc for the book, it means that for us, the value of the book is higher than that of our one-franc coin. We prefer the book to the coin, and that is why we make the exchange.

Condillac's theory is not fundamentally contradictory with that of the Physiocrats, but they are not speaking the same language, so to speak. Le Trosne speaks of price while Condillac speaks of value, and vice versa.

Where Condillac is correct is that if prices are equal between the two exchanged goods, values are not equal, otherwise, no exchange would take place.

To summarize Condillac's theory, three propositions can be listed:

First proposition: we seek goods for their utility. This seems obvious, but it is a central tenet of economic science that men exchange to acquire utilities, a point that Jean-Baptiste Say also developed perfectly.

Second proposition: value preexists and motivates exchanges. The subjective judgment each person makes about goods and services implies that these same goods and services have a value for them, worth more or less according to the utility they seem to provide. Naturally, each individual judges differently from another, and value varies from person to person.

Finally, third proposition: price is the consequence of the exchange process. Products do not exchange at the value I attribute to them because the conditions of exchange also depend on the subjective value the seller attributes to those products. The relationship between buyer and seller, or between the buyer's subjective appreciation and the seller's subjective appreciation, establishes a price.

These ideas of Condillac are fundamental. They allow us to understand why every exchange is always mutually beneficial.

They therefore entirely destroy criticisms of free trade, since protectionism appears only as a mechanism that prevents populations from mutually benefiting each other. Laissez-faire is also the conclusion of Condillac's work. Let people do as they please, for if the public power protects liberty and property, men will always enrich one another by exchanging together.