Professor Jeremy Jennings blogs on the origins of the term "laissez-faire".
My assumption is that the majority of people who read CPS blogs believe in a free market and that they are familiar with the pro-market arguments advanced by writers such as Adam Smith and Friedrich von Hayek. However I wonder how many CPS blog readers are familiar with the origin of the term “laissez-faire”? At the recent CPS showing of The Iron Lady I posed this question to a few people at the reception and no one knew. The closest someone got to the answer was to suggest that it had been Voltaire. In truth, I myself was not sure and also got it wrong when I put forward the name of the eighteenth-century French economist Turgot. Given the historic prominence of the term and the popularity of the idea that governments should leave the economy alone, this is rather surprising.
So where did the term “laissez-faire” come from? We are not exactly sure. It is thought that the term originated with François Legendre’s usage of it in the mid-seventeenth century. We know for certain that Louis XIV’s minister Colbert used the phrase during the 1690s, if not slightly before. By general agreement, however, the term was popularized by Jean-Claude-Marie Vincent de Gournay. Gournay was born in St Malo in 1712 and from an early age was engaged in the family trading business. He later became Intendant of Commerce and it was in that capacity that he toured France investigating its trade and manufacturing.
Gournay wrote very little but we know that he was familiar with the ideas of the Dutchman Pieter de la Court as well as the writings of Josiah Child in England. We also know that he gathered around him a group of young admirers. One of these was Anne-Robert-Jacques-Turgot, and it was Turgot who in the year of Gournay’s death in 1759 published a short essay entitled In Praise of Gournay. It is here that we find one of the very first expressions of the principles of free-market economics.
According to Turgot, it was in the course of Gournay’s travels in France that he arrived at “several maxims of the plainest common sense”. Faced with “the spirit of monopoly, the whole purpose of which was to discourage industry”, Gournay concluded not only that “every man who works deserves the gratitude of the public” but also that “in general every man knows his own interest better than another to whom it is no concern”. More importantly still, he saw that “in the case of unrestrained commerce” it was “impossible for the individual interest not to concur with the general interest”. From this followed the central maxim of “laissez-faire”: “every man ought best to be left at liberty to do what he likes”.
Moreover, Gournay argued that the pursuit of individual interest would more surely increase public welfare than the operations of government. The latter, he believed, were “of necessity directed by a hazy and dubious theory” and “the desire for misplaced perfection”. The primary function of government therefore was to “protect the natural liberty of the buyer to buy and the seller to sell”. To that end government as far as possible should remove all barriers to trade, to competition and to the right to work. It should simplify taxes and lower the rate of interest by reducing its own expenditure and borrowing. If public finance was necessary, it “should never be prejudicial to commerce”. None of this was to say that we would never come across a cheating merchant or a duped consumer but to believe that this could be prevented was like wanting government “to provide cushions for all the children who might fall”.
There are many other interesting and fascinating dimensions to Gournay’s thinking – he saw, for example, that regulation and inspection by government always came at a cost to the consumer – but hopefully what we have seen here is sufficient for us to recognize Gournay not only as one of the founders of free market thinking in France – something often seen as an oxymoron - but also as a worthy forerunner to the great figures of classical and neo-classical economics. I also suspect that the Iron Lady would approve.
Professor Jeremy Jennings is Director of the Centre for the Study of Political Thought at Queen Mary, University of London. His latest works are Revolution and the Republic: A History of Political Thought in France published by Oxford University Press in 2011 and his edition of Destutt de Tracy's 'A Treatise on Political Economy' published this month by Liberty Fund.