Today is the 250th anniversary of Jean-Baptiste Say, one of the most important economic thinkers of the nineteenth century. Here are five facts you should know about this French economist:
1. Say’s conviction that the study of economics should start not with abstract mathematical and statistical analyses but with the real experience of the human person was likely based on his own vocational experiences. He had worked at a broad range of occupations including journalist, soldier, politician, cotton manufacturer, writer, apprenticeship in a commercial office, and secretary in a life insurance company. As David M. Hart explains, “The major reason for his constantly changing career were the political and economic upheavals his generation had to endure: the French Revolution, the Revolutionary Wars, the rise of Napoleon Bonaparte, economic warfare with Britain, and eventually the fall of the Empire and the Restoration of the Bourbon monarchy. Only after this quarter century of turmoil could Say take up his first position teaching political economy in Paris in 1815, an activity he was to continue until his death in 1832.”
2. Say is credited with coining the term “entrepreneur” in his influential book, A Treatise on Political Economy, or the Production, Distribution, and Consumption of Wealth. When the book was translated into English in 1880, it included this note on the term: “The term entrepreneur is difficult to render in English; the corresponding word, undertaker, being already appropriated to a limited sense. . . For want of a better word, it will be rendered into English by the term adventurer.”
3. Say is also credited with what has become known as Say’s law, or the law of markets. The law is often (incorrectly) stated as “supply creates its own demand.” But as Hart says, it should be “more broadly understood as the idea that producers, by nature of finding markets for and selling their own goods, generate income they can spend on other goods in the economy.” And as Steven Horwitz explains,
Put another way, Say was making the claim that production is the source of demand. One’s ability to demand goods and services from others derives from the income produced by one’s own acts of production. Wealth is created by production not by consumption. My ability to demand food, clothing, and shelter derives from the productivity of my labor or my nonlabor assets. The higher (lower) that productivity, the higher (lower) is my power to demand.
4. Say was appointed to a government finance committee in 1799, where he encountered Napoleon Bonaparte, then the First Consul of France. During a dinner meeting, Napoleon proposed that Say publish an updated edition of his Treatise incorporating a defense of the government’s profligate policies. To entice the economist, Napoleon offered him 40,000 francs to make the changes. Say refused to compromise his integrity, which cost him his job with the Tribunat.
5. While his book was being suppressed in France, Say and his Treatise came to the attention of Thomas Jefferson and James Madison. Madison thought it the best book ever written about economics and Jefferson attempted to entice Say to be a professor of political economy at the new University of Virginia. Instead, Say waited till Napoleon was in exile and took a job as professor in economics, first at the Athénée, then at the Conservatoire des Arts et Metiers, and finally at the College de France, where he occupied France’s first chair in political economy.