Introduction to Jean-Baptiste Say

Introduction to Jean-Baptiste Say

Let me introduce you to Jean-Baptiste Say, a French classical liberal economist and scholar known for his Law of Markets, which states that production creates demand. Born in Lyon, he had a notable career, including serving on a government finance committee under Napoleon and teaching political economy at various French institutions. His law emphasizes that the ability to demand goods is financed by supplying others.

Key Takeaways

You should know that Jean-Baptiste Say was a French classical liberal political economist who significantly influenced neoclassical economic thought. He drew inspiration from Adam Smith and his book, The Wealth of Nations. Say worked in the French government under Napoleon and as a professor in France. He strongly supported competition, free trade, and removing restraints on business. His Law of Markets suggests that all markets will clear because demand follows supply at the right price.

Early Life and Education

Jean-Baptiste Say, often called J.B. Say, was born on January 5, 1767, in Lyon, France. He attended school in Lyon before moving to London to study business. In 1787, he returned to France and settled in Paris with his family. He worked as a secretary in a Paris insurance company run by Etienne Claviere, a politician and financier of the French Revolution. That's where he first encountered Adam Smith's An Inquiry into the Nature and Causes of the Wealth of Nations. Influenced by Smith, and using Claviere's connections, Say became a journalist.

In 1799, Say joined the Tribunate, an economic institute under the French government. Napoleon Bonaparte, who disagreed with Say's ideas, removed him from the post a few years later. Say opened a cotton-spinning mill in 1807 and sold it six years later. From 1817 to 1830, he held a chair of industrial economy at the Conservatory of Arts and Crafts. He also taught political economy at the Collège de France until his death in 1832.

Notable Accomplishments

Say was deeply influenced by Adam Smith and the economic theories in his 1776 book Wealth of Nations. He promoted Smith's free market and laissez-faire philosophies, popularizing them in France through his teaching and academic work. Say believed a falling price level could be positive if driven by productivity gains, not deflation.

He's best known for Say's Law of Markets, or his Theory of Markets. This law states that to buy something, you must first produce something of value to sell, gaining purchasing power. Effective demand comes from prior production, so there can't be a sustained general oversupply; producing goods creates demand for goods. Say acknowledged imbalances in specific goods but believed price adjustments balance overall supply and demand.

Published Works

Jean-Baptiste Say wrote on money, banking, and viewed taxation as burdensome. His most famous book is A Treatise on Political Economy, published in 1803. Other works include the two-volume Complete Course in Practical Political Economy from 1852, and Letters to Mr. Malthus, a collection debating economic growth theories with Thomas Malthus.

Legacy

Say's Law of Markets endures in modern neoclassical models, arguing that flexible prices lead to market clearing and economic stability. It implies the economy self-regulates, with production sourcing demand, though it's often misinterpreted as supply creating its own demand. Say supported free trade, competition, and fewer business restrictions.

Economists like John Maynard Keynes and Thomas Malthus criticized Say's law, with some blaming Keynes for misrepresenting it as a straw man to advance his own ideas. Say's works, in English translations, impressed American founders Thomas Jefferson and James Madison, who corresponded with him; Jefferson even urged Say to move to Virginia. Say is credited as one of the first to discuss entrepreneurship and utility, noting entrepreneurs meet human wants. He co-founded ESCP Europe in 1819, the world's first business school.

Personal Life

Say served briefly in the French military in a volunteer battalion. In 1793, he married Julie Gourdel-Deloches, avoiding mandatory conscription. They had two children, Horace Emile Say and Adrienne Say. His wife died in 1830, and Say passed away on November 15, 1832. He is buried in Père Lachaise in Paris.

Who Was Jean-Baptiste Say?

Jean-Baptiste Say was a French classical liberal economist born in 1767. He worked in Napoleon's government before being dismissed, then taught political economy in France. Influenced by Adam Smith, father of modern economics, Say promoted his theories in France. His Law of Markets, still studied today, states society generates income before purchasing goods. He advocated competition, free trade, and lifting business restraints.

What Type of Economy Influenced Jean-Baptiste Say?

Say was influenced by Adam Smith's theories in The Wealth of Nations. He believed in free market and laissez-faire economics, emphasizing these in his education and career.

What Is Say's Law of Markets?

Say's Law is a classical theory stating individuals produce and generate income to purchase goods and services. Demand follows production, explaining wealth creation and economic activity.

The Bottom Line

Jean-Baptiste Say, a French classical liberal economist, made a lasting impact through his work. Influenced by Adam Smith, he taught political economy in France after working under Napoleon. He wrote several books, but his Law of Markets, linking income to supply and demand, is his key legacy.