A History of Economic Doctrines / from the time of the physiocrats to the present day

by Charles Gide; Charles Rist

Equally remarkable was the foresight they displayed in demanding a more rigorous control of production, and in emphasising the need for some better method of adapting that production to meet the exigencies of demand than is possible under a competitive system. The State obviously has neither the ability nor the inclination to discharge such functions, but so great are the inconveniences of competition that manufacturers are forced to enter into agreements with one another in order to exercise some such control. This is nothing less than a partial application of the doctrine of Saint-Simon.

In addition to the considerable personal influence which they were able to exercise over economic development, we have to recognise that in their writings we have the beginnings both of the critical and of the constructive contribution made by socialists to nineteenth-century economics. Their doctrine is, as it were, little more than an index to later socialist literature.

In the first place one must be struck by the number of formulæ to be met with in their work which have since become the commonplaces of socialism. “The exploitation of man by man” was a phrase that was exceedingly popular up to 1848. The term “class war,” which has taken its place since the time of Marx, expresses the same idea. They spoke of “the organisation of labour” even before Louis Blanc, and employed the term “instrument of labour” as a synonym for land and movable capital long before it was so used by Marx. Although we have not considered it necessary to group them with the Associationists, they have been as assiduous as any in proclaiming the superior merits of producers’ associations. Moreover, they anticipated the use which the socialists would make of the theory of rent. In a curious passage written long before the time of Henry George they refer to the possibility of applying the doctrines of Ricardo and Malthus to justify the devotion of the surplus produce of good land to the general needs of society, thus anticipating the theory of another prominent socialist thinker.[499] Other ideas might be mentioned, though not of a specifically socialist character. Thus the theory of profit-sharing, as far as our knowledge goes, was first developed in an article in Le Producteur.[500]

The more one examines the doctrines of the Saint-Simonians the more conscious does one become of the remarkable character of these anticipations and of the injustice of the oblivion which has since befallen them. Marx’s friend Engels called attention to the “genial perspicacity of Saint-Simon, which enabled him to anticipate all the doctrines of subsequent socialists other than those of a specifically economic character.”[501] The specifically economic idea of which Engels speaks and which Saint-Simon, in his opinion, did wrong to neglect was the Marxian theory of surplus value. We are inclined to the opinion that it was more of a merit than a fault to place socialism on its real foundation, which must necessarily be a social one, rather than to found it upon an erroneous theory of value.

But new formulæ are not their only contribution. Due note was taken of that fundamental opposition which exists between economists and socialists and which has caused all the conflicts and misunderstandings that disfigure the history of the century and resulted in their speaking an entirely different language. We shall try to define the nature of the conflict, in order, if possible, to help the reader over the difficulties that arise just where the bifurcation of economic thought takes place.

No attempt was made either by Adam Smith, Ricardo, or J. B. Say to make clear the distinction between the science of political economy and the fact of social organisation.[502] Property, as we have already had occasion to remark, was a social fact that was accepted by them without the slightest demur. The methods of dividing property and of inheriting it, the causes that determined its rise and the consequences that resulted from its existence, were questions that remained outside the scope of their discussions. By division or distribution of wealth they meant simply the distribution of the annual revenue between the various factors of production. Their interest centres round problems concerning the rate of interest or the rate of wages or the amount of rent. Their theory of distribution is simply a theory concerning the price of services. No attention was paid to individuals, the social product being supposed to be divided between impersonal factors—land, capital, and labour—according to certain necessary laws. For convenience of discussion the impersonal occasionally becomes personal, as when they speak of proprietors, capitalists, and workers, but that is not allowed to affect the general trend of the argument.

For the Saint-Simonians, on the other hand, and for socialists in general the problem of distribution consists especially in knowing how property is distributed. The question is to determine why some people have property while others have none; why the instruments of production, land, and capital should be so unevenly distributed, and why the revenues resulting from this distribution should be unequal. For a consideration of the abstract factors of production the socialists are anxious to substitute the study of actual living individuals or social classes and the legal ties which bind them together. These differing conceptions of distribution have given rise to two different problems, the one primarily economic, the other social, and sufficient care has not always been taken to distinguish between these two currents, which have managed to coexist, much to the confusion of social thinking in the nineteenth century.

Another essential difference between their respective points of view consists of the different manner in which economists and socialists conceive of the opposition that exists between the general interest and the interests of individuals.

Classical writers envisaged it as a conflict between the interests of consumers, i.e. everybody, and the interests of producers, which are more or less the interests of a particular class.