Jean-Baptiste Say

Jean-Baptiste Say advocates Adam Smith’s ideas of self-market economics, natural liberty and limited government intervention in the market. He praised Adam Smith's work and thought of his ritings as elaborations of Smith's The Wealth of Nations (http://www.quebecoislibre.org/06/060212-4.htm).

Just like Adam Smith, Say applied the idea of spontaneous order to the marketplace.

“Wealth is independent of the nature of government. Under any form of government, a state may prosper if it is well administered. Absolute monarchs have enriched their countries, and popular councils ruined theirs. Even the forms of public administration only influence the formation of wealth, which is almost entirely the work of individuals, indirectly and accidentally” (Forget 211).

He considers the government should have a limited role in the marketplace. Say believes that fiscal policy is ineffective in the creation of wealth and believed that business cycles are caused by government intervention, which does not allow for market forces to operate and limit market clearing. He opposes government imposed taxation which, in his opinion, reduces the amount of capital to be exchanged in the marketplace, and reduces wealth, as it takes away private investment from the market and results in a decline in people’s living standard.

However, Say be believed that while markets are ordered spontaneously, societies are not. While recognizing that “there exists in societies a nature of things that is independent of the will of man, which we cannot arbitrarily ignore”, and that individuals, are self-interested (with the exception of members of the same family who have common interests), Say does not believe that social order arises due to individuals pursuing their own self-interested interests. Say limited Adam Smith’s idea of spontaneous order to the marketplace:

Contrary to Adam Smith who considers that social order is created through the interaction of many different individuals, Say methaphorically regards the society as a human body which can only survive if the coordination of its organs is harmonious. Say believes that social order has not spontaneously evolved but is a consequence of effective legislation and good education which has managed to make self-interested individuals subordinate their interests to what is good for the society. Thus, while the invisible hand mechanism should be allowed to operate in the marketplace, people’s self interest should be modeled in such a way so it results in favorable outcomes for the society. It is impossible, in Say’s opinion, for an industrious culture to emerge spontaneously without the legislator’s help, despite spontaneous forces being able to emerge in the more narrowly defined marketplace. Say thus assigns a much more important role to legislators, administrators and educators, who are responsible for teaching individuals what their true interests should be.

While Adam Smith argues that legislators should be limited to (1) defend the country, (2) administer justice and (3) maintain certain public works, Say argues that legislators should have a crucial role in helping individuals realize their true goals, which will allow them to form an industrious culture. Contrary to Smith who argues that people do not necessarily have to understand the laws they follow, Say considers that people can benefit from understanding the laws that govern their lives as they can understand what their best interest is. Without receiving education from the legislators or from a free press (which can expose the public to various interpretations of every issue), individuals do not know what their true best interest is.It is the legislator’s role, Say believes, to teach individuals what their true interests should be, such as the social order is harmonious.