The Bicentennial Anthology of Gustave de Molinari's Writings on the State (2019)

Introductions to the Texts by David M. Hart

Date: 5 November, 2018

Introduction

This collection of texts was compiled as part of the bincentennial celebrations of the birth of the Franco-Belgian economist Gustave de Molinari who was born on 3 March 1819 in Liège and died at 92 years of age on 28 January, 1912 in Adinkerke, Belgium. It is part of a larger work which will contain a lengthy biograographical introduction of Miolinari's life and work, brief introductions by me for the extfrascts, the extracts themseklves, and an updated bibliography of his writings.

For more information, see:

 

Summary of the Contents

I. Molinari’s Political Credo: “la Liberté, la Propriété, et la Paix”

  1. His “Spartacus speech” (1849). [Les Soirées, 1849, S12 pp. 348–63.]
  2. Molinari’s Credo: “la Liberté et la Paix” (1861). [“Introduction”, Questions d’économie politique et de droit public (1861), vol. 1, pp. v-xxxi. ]
  3. “Programme économique” (1891). [Notions fondamentales d’Économie politique (1891), pp. 381–96.]

II. The First Formulation of the Theory of Anarcho-Capitalism (1846–1849)

  1. “Le droit électoral" (1846). [Courrier français, 23 July 1846; reprinted in Questions d’économie politique (1861), T. 2, pp. 271–275.]
  2. ”La Production de la sécurité” (1849). [JDE, T. XXII, no. 95, 15 fév., 1849, pp. 277–90.]
  3. “On Government and its Function" (1849). [Les Soirées, S11, pp. 303–337.]

III. Molinari’s Theory of the State I

  1. “Le Despotisme et les mangeurs des taxes” (1852). [Les Révolutions et le despotisme envisagés au point de vue des intérêts matériel (1852), pp. 81–152.]
  2. “Nations” (1853). [Dictionnaire de l’économie politique, T. 2, pp. 259–62.]

IV. The Further Development of Molinari’s Theory of Pure Anarcho-capitalism (1852–1863)

  1. “Les consommations publiques" (1855, 1863). [Cours d’économie politique (1855, 1863), T. 2, pp. 480–534.]
  2. ”De l’administration de la Justice" (1855). [L’économiste belge No. 11, 5 Juin 1855, pp. 1–3.]

V. Molinari’s Theory of the State II: The “Tempered” (strengthened, hardened) Republic (1873)

  1. “La République tempérée” (1873). [La République tempérée (1873), I, pp. 5–14; II pp. 15–25; V, pp. 59–77; VI. pp. 79–90.]

VI. Molinari’s Gradual Retreat from Strict Anarcho-Capitalism (1880–1908)

  1. ”La théorie du progrès et l’évolution économique” (1880). [L’Évolution économique du dix-neuvième siècle (1880), “Conclusion,” pp. 439–69.]
  2. ”Les gouvernements de l’avenir" (1884). [L’Évolution politique et la Révolution (1884), Chap. X "Les gouvernements de l’avenir,” pp. 351–423.]
  3. ”La liberté de gouvernement" (1887). [Les Lois naturelles de l’économie politique (1887), pp. 238–77.]
  4. ”Projet d’Association pour l’établissement d’une Ligue des neutres” (1887). [The Times, 28 juillet 1887. Republished in La morale économique (1888), pp. 431–38).]
  5. “La décadence de la guerre” (1898). [La Grandeur et decadence de la guerre (1898), selections from pp. 113–72.]
  6. ”La constitution libre" (1899). [Esquisse de l’organisation politique et économique de la société future (1899), pp.69–93.]
  7. “Le problème du gouvernement individuel” (1900). [JDE, S. 5, T. 44, N° 3, décembre 1900, pp. 321–39.]

VII. Last Words on the Matter (1901–1911)

  1. Summing up the liberal successes and failures of the 19th Century (January, 1901). [“Le XIXe siècle”, JDE, Jan.1901), pp. 5–19.]
  2. Predicting the Catastrophes of the 20th Century (January, 1902). [“Le XXe siècle,” JDE, Jan. 1902), pp. 5–14.]
  3. "Où est l’Utopie?” (1906). [JDE, S. 6, T. 3, N° 2, août 1904.]
  4. “Le vol et l’échange” (1908). [JDE, S. 6, T. 19, N° 1, juillet 1908.]
  5. “La crise et la décadence” (1908). [Économie de l’histoire. Théorie de l’évolution (1908), pp. 219–257.]
  6. Molinari’s “Last Words” (1911). [Ultima Verba: Mon dernier ouvrage (1911), “Préface,” pp. i-xvii.]

 

 


 

Table of Contents

 


 

 

Molinari’s Political Credo: “la LibertÉ, la PropriÉtÉ, et la Paix”

His “Spartacus speech” at the Conclusion to Les Soirées (1849)

Source

Molinari, Gustave de. Les Soirées de la rue Saint-Lazare; entretiens sur les lois économiques et défense de la propriété (Paris: Guillaumin, 1849). Concluding section of S12 at the end of the book, pp. 348–63..

Introduction

On several occasions in Les Soirées “The Economist” (i.e. Molinari) stops the conversation he is having with “The Socialist” and “The Conservative” to deliver a speech on some topic. This one here, what I have called his “Spartacus Speech,” comes at the very end of the book where he sums up the main ideas he has been presenting and gives the reader a rousing speech in favor of individual liberty. The most passionate section is the following:

La liberté! c’était le cri des captifs d’Égypte, des esclaves de Spartacus, des paysans du moyen âge, et, plus tard, des bourgeois opprimés par la noblesse et les corporations religieuses, des ouvriers opprimés par les maîtrises et les jurandes. La liberté! c’était le cri d’espérance de tous ceux dont la propriété se trouvait confisquée par le monopole ou le privilége. La liberté! c’était l’aspiration ardente de tous ceux dont les droits naturels étaient comprimés sous la force.

Un jour vint où les opprimés se trouvèrent assez forts pour se débarrasser des oppresseurs.

There are several key ideas in this speech which Molinari will continue to pursue over the course of his long life: only in “un milieu libre” where property rights are respected will there be a maximum of production and a just distribution of rewards for work done; that throughout history the strongest and the most crafty (“rusé”) seize control of the state in order to have “l’esclavage, les monopoles et les priviléges” at the expense of ordinary people; that those who are oppressed by this will one day rise up in rebellion and seize their liberty back; that the future battle for freedom will be between the defenders of the “status quo” (the conservatives), the advocates of new “artificial” ways of organizing society who ignore the natural laws of political economy (the socialists), and the true defenders of liberty (“les partisans de la liberté”).

Molinari’s Credo: “la Liberté et la Paix” (1861)

Source

Gustave Molinari, Questions d’économie politique et de droit public. Two Volumes. (Paris: Guillaumin et cie, 1861), Vol. 1, Introduction, pp. v-xxxi.

Introduction

The following extract is the introduction to Molinari’s two volume collection of essays and articles which he had written over the previous 15 years, Questions d’économie politique et de droit public (1861). They cover topics such as the freedom of speech (in particular theatres which was a passion of his), free trade, the private provision of security, the law of war, and intellectual property. In the introduction Molinari provides a very useful summary of his liberal ideas which had been evolving from the time he first came to Paris in 1840, his activity as an economic journalist, his voluntary exile in Belgium after the coup d’état of Louis Napoleon, and his work as an academic economist in Brussels during the 1850s. As he concludes, throughout this entire period his “Credo” had remained the same, namely a firm belief in “la Liberté et la Paix.”

This piece should be compared to later, similar statements of his beliefs which he made towards the end of his long life, such as “Le problème du gouvernement individuel” (1900), “Où est l’utopie ?” (1904), and his final book Ultima Verba: Mon dernier ouvrage (1911), where he seems to have been remarkably consistent. For example, in “Où est l’utopie ?” he is still putting forward his utopian vision of a fully free society which would be “un seul et vaste marché” for everything.

Building upon some of the ideas he expressed ten years previously in “Revolutions and Despotism” (1852) Molinari returns to the idea of the economist as “le teneur de livres de la politique” (the book keeper of public policy) who weights up the costs and benefits of different courses of political action. This is an approach he would turn to repeatedly in his writings, such as in “De l’administration de la Justice“ (1855), “La décadence de la guerre” (1898), and ”Le XXe siècle" (1902). In this case he examines two different strategies for achieving radical change in society, namely the use of “la force” by means of revolutions and wars, versus the use of “la persuasion” by means of peaceful propaganda. Molinari categorically rejects the use of violence to realize the ideas he favors, even when one is faced with “des griefs légitimes” (legitimate grievances). Events which one might have thought he would have supported, such as the American and French Revolutions of 1776 and 1789, the revolts of the Spanish colonies in the 1820s, the revolutions of 1830 in France and Belgium, he also rejected as causing more loss of life and property than they were worth and leaving behind “les habitudes de la violence et de la spoliation”. Thus, “le bilan de ces révolutions se solde en déficit” and “leur passif matériel et moral dépasse de beaucoup leur actif.”

Molinari’s conclusion was that

”Nous repoussons de toute notre énergie l’intervention de la force pour imposer les idées; nous nous en tenons à l’emploi exclusif de la persuasion pour les faire accepter"

We reject with all our energy the use of force in order to impose ideas (on others); we limit ourselves to the exclusive use of persuasion in order to get (others) to accept them.

He cites two historical examples of the successful use of peaceful persuasion to change society in a more liberal direction, the early centuries of the Christian religion (before it became the state religion of the Roman Empire) and the success of the Anti-Corn Law League in ending protection in England in 1846. He is confident that the liberals of his own day should take advantage of the technological revolutions which had taken place in communications, what he called “les moyens matériels de propagande”, (steam power, the printing press, and the telegraph), to influence the new force of “l’opinion publique”. Even in very authoritarian and dictatorial states which attempted to keep out liberal ideas by erecting “une douane intellectuelle, restrictive ou prohibitive” the attempt would ultimately fail as ideas would become a form of “contrebande” which would be smuggled across any protectionist “intellectual border.”

There is also a strong suggestion in this introduction that Molinari had not retreated from his anarchist views of 1849 as his article on “Nations” might have suggested in 1853. First of all, he reprints the article “La production de la sécurité” from February 1849. Secondly, he claims that “les guerres politiques” (political wars) would lose all meaning:

“lorsque chacun, individuellement, peut donner librement sa clientèle à l’établissement dans lequel il a le plus de confiance pour assurer sa liberté et garantir sa propriété.”

And thirdly, in his concluding paragraph he explicitly states that his theory of “la liberté de gouvernement” had barely been sketched (“à peine ébauchée”), thus implying that he planned to continue to develop it further in the future.

“Programme économique” (Notions fondamentales 1891)

Source

Gustave de Molinari, Notions fondamentales d’Économie politique et programme économique (Paris: Guillaumin, 1891).
- III: PROGRAMME ÉCONOMIQUE.
- CHAPITRE III: PROGRAMME ÉCONOMIQUE Le libre-échange. — L’assurance contre la guerre. La simplification de l’État. pp. 381–96.

Introduction

In this book published late in his career Molinari returns to one of his favorite topics, namely the natural laws of political economy and what impact following or ignoring them will have on human prosperity. The final section of the books is a restatement of the economists’ program and a critique of the socialists’ programme, something he had spent his entire life opposing.

Molinari believes that there are three essential components of the economists’ program: free trade, “L’assurance Contre La Guerre” (guarantees or protection against war), and “la simplification de L’État” (the reduction in the size of the state).

In the first section he summaries the economists’ defence of free trade, how it allows the benefits of competition to have a world-wide reach, and how the gradual spread of peace made more international trade possible as well as making the world trade system more interconnected and mutually dependent and thus more likely to encourage the continued spread of peace. He also reiterates his class analysis of the powerful vested interests who have formed an alliance with the state to pursue mutually beneficial gains at the expense of ordinary taxpayers and consumers: the industrialists and landowners who call for more subsidies and protection, and the state which uses hard to see indirect taxes (les impôts indirects et invisibles) to expand its power and the number of state employees. In spite of this, Molinari is convinced that the pressure of universal competition (“la pression de la concurrence universalisée”) had become so strong that its final victory, along with free trade, was unstoppable.

In the second section he continues to defend his 1888 argument in favour of a “League of Neutrals” to help bring an end to the threat of war. In place of the traditional idea of “the law of war” which states had used for centuries to defend their right to go to war, Molinari wants to see a new “le « Droit de la paix »” put in its place, which would allow small and neutral powers the right to intervene to prevent larger and more aggressive states going to war against their neighbors. This would include arbitration by an international tribunal as well as organised public opinion to shame violators of the peace in an international forum. By doing this Molinari believed, states could cut the size of their military budgets by at least 90%.

The third section contains his plea for a massive reduction in the size of the state in all the other areas of its activity, so that it would reach its ideal size, namely that of l’État-Gendarme (the nightwatchman state). He believes that the activities of the state should be reduced to the single duty of guaranteeing the life and property of individuals against domestic and foreign risks by charging “les « consommateurs de sécurité »” an insurance premium (une prime d’assurance) which competitive forces among “les assureurs” have lowered to the minimum set by the costs of production of security. This competition will bring better service and lower costs to “cette industrie, les services de la justice et de la police demeurant partout dans un état d’imperfection grossière”. He concludes by stating that his aim is:

Simplifier l’État, réduire les gouvernements au rôle de producteurs de sécurité, en leur enlevant toutes les attributions et fonctions qu’ils ont usurpées et usurpent chaque jour sur le domaine de l’activité privée, en un mot, substituer à l’État socialiste, en voie de devenir le producteur universel, l’État-Gendarme des pères de l’Économie politique …

The First Formulation of the Theory of Anarcho-Capitalism (1846–1849)

“Le droit électoral" (July 1846)

Source

Originally published in the Courrier français, 23 juillet 1846; reprinted in Questions d’économie politique et de droit public (Paris: Guillaumin; Brussels: Lacroix, 1861), 2 vols. Vol. 2, pp. 271–275 in a section entitled “La liberté de government” (along with a reprint of “De la production de la sécurité” and the SEP debate in the JDE).

Introduction

In this early article for Le Courrier français (23 juillet 1846) Molinari develops a metaphor which later (in 1849) he thinks could become a real possibility, namely that that the state is like “une grande compagnie d’assurances mutuelles” (a large mutual insurance company), that tax payers are like “un actionnaire de la société” (a shareholder in the company), and taxes are like “charges de l’association” (membership dues).

In this early expression of his idea, he thinks the state should charge the shareholders/taxpayers an amount which is proportional to the amount of property to be protected. And like any other publicly owned company the shareholders or their representatives on the Board had the right to say how the company is managed and run. This implied that all French taxpayers should have the right to vote and to have a say in how their taxes/membership dues were being spent.

Of course, this was not how things worked in England or France. As he would later argue in the article “La Production de la sécurité” in February 1849, the English Crown and the aristocracy created a monopoly in the use of violence (or in the “provision of security”) which Molinari thought had many features in common with a privileged feudal corporation. The English Revolution forced the crown and the aristocracy to share this monopoly with the Commons who were able to exercise some power to limit taxes, or what he called the “price of security,” at least for a short period.

A similar situation existed in the July Monarchy in France. Molinari argued that the 250,000 richest taxpayers (what Bastiat termed “la classe électorale”) who were allowed to vote exercised similar monopoly powers over the state as the English Crown and aristocracy did in the 17th century. They controlled the army and the police as well as the votes required to introduce tariff protection and subsidies for the industries from which they made their livelihoods. Molinari thought this was unfair because the vast bulk of the French taxpayers were excluded from any say in how much taxation could be imposed upon them or how this money would be spent. One of the arguments he used in arguing for an expansion of the franchise in France was the idea that the main reason for having a government in the first place was to provide all citizens with a guarantee of security of their persons and property.

Molinari thought there were two ways in which a state acting like a large insurance company might be run: the largest shareholders have a monopoly in running the state, as in France, or the right to vote by shareholders is “à universaliser et à uniformiser le droit électoral” (universalised and made uniform) as in the United States, which runs the risk of seeing the democratic masses imposing a higher tax burden on the wealthiest groups in society:

Sous l’empire d’un tel système (France), on sait ce qui arrive : les gros actionnaires, les censitaires pourvus du droit électoral, gouvernent la société uniquement à leur profit; les lois qui devraient protéger également tous les citoyens servent à grossir la propriété des forts actionnaires au détriment de la propriété des faibles; l’égalité politique est détruite. [p. 273]

Under the influence of such as system (in France) one knows what happens: the big shareholders, the “censitaires” who have the right to vote, govern society exclusively for their own profit; the laws which should protect all citizens equally serve to expand the property of the strong shareholders at the expense of the weak ones; political equality is destroyed.

The problem was to find a system which would avoid the weakness of both systems. Molinari thought this could be achieved by having a universal right to vote as in America (where all shareholders could participate in choosing the management of the company) but making the payment of member’s dues (taxes) limited to a fixed proportion of the value of the property which they wanted to protect (such as a flat rate of taxation on income or the value of property). This was in order to prevent a democratic majority of voters voting for confiscatory taxes on the property and income of the rich, which Molinari thought was a major weakness in the American system of government.

These ideas first expressed here have some similarity to the constitutional proposals Molinari put forward in La République tempérée in 1873 when the new constitution for the Third Republic was being discussed. In that work Molinari proposed two chambers, an upper house elected by the largest tax payers which would have a right of veto on spending bills, and a lower chamber elected by universal suffrage, with an executive with very limited powers elected by both chambers.

”The Production of Security" (1849)

Source

Original: Gustave de Molinari, “De la production de la sécurité,” in Journal des Economistes, Vol. XXII, no. 95, 15 February, 1849, pp. 277–90.

First Translation: Gustave de Molinari, The Production of Security, trans. J. Huston McCulloch, Occasional Papers Series #2 (Richard M. Ebeling, Editor), New York: The Center for Libertarian Studies, May 1977. It can be found in various formats at the Mises Institute website <http://mises.org/resources/2716>.

Introduction

This breakthrough article which Molinari published in the JDE in February 1849 is the first explicit statement of the anarcho-capitalist position ever written, namely that private companies acting competitively in a free market could and should provide the public goods of police and national defense which were normally reserved as a monopoly of the state.

The intellectual leap he made from his 1846 article to this one was to stop thinking metaphorically, that society was “like” an insurance company and that taxpayers were “like” share holders in that company, and to see it as an actual possibility that real insurance companies could sell premiums to willing customers for specific services which could be agreed upon contractually in advance and provided competitively on the free market.

This article was his first attempt to explore the possibilities which this new way of thinking about government opened up; the second would be S11 in the book Les Soirées de la rue Saint-Lazare, and the third would be a lengthy section on “La Consommation publique” (Public Consumption) in the Cours d’économie politique which was published six years after Les Soirées.

In this article Molinari make the case that “la production de la sécurité” was just any another government monopoly which should be liberalized. He turns the counter-argument on its head by challenging the economists, who want to de-monopolize nearly everything the government does, to justify why they have made this important exception to the general principle. Why should there be a government monopoly in this case when the theory of political economy shows conclusively that monopolies lead to higher prices, lack of innovation, poor service to consumers, and high profits for a privileged protected minority?

Some inspiration no doubt came from a passage in Adam Smith’s Wealth of Nations (which Molinari quotes) where he talks about competing courts in England where litigants could shop around for a court which best suited their needs and which would charge fees according to the type of case involved.[1] This was a clear example of how legal services could be provided on the free market between competing institutions for profit. Given the powerful need for protection of person and property felt by consumers (“les consommateurs de sécurité”), and the fact that there were individuals who had the knowledge and skill to provide protection services for a fee (“les producteurs de sécurité”), Molinari thought it was inevitable that an individual or association of individuals would emerge as a producer of security to do just that.

In this article Molinari does not yet talk about “les compagnies d’assurances” (insurance companies) providing security services (this would come later in his book Les Soirées de la rue Saint-Lazare published later that same year) but refers to “un simple entrepreneur” (a simple entrepreneur) or “une compagnie” which would be “le producteur (de la sécurité)” and “les consommateurs (de la sécurité)” who would pay for it with “une prime”.

In a key passage Molinari even spelled out some of the terms and conditions which a budding security entrepreneur in “l’industrie de la sécurité” (the security industry) would have to offer consumers in order to get their business and to provide an effective service:

  1. Que le producteur établisse certaines peines contre les offenseurs des personnes et les ravisseurs des propriétés, et que les consommateurs acceptent de se soumettre à ces peines, au cas où ils commettraient eux-mêmes des sévices contre les personnes et les propriétés;

  2. Qu’il impose aux consommateurs certaines gênes, ayant pour objet de lui faciliter la découverte des auteurs de délits;

  3. Qu’il perçoive régulièrement, pour couvrir ses frais de production ainsi que le bénéfice naturel de son industrie, une certaine prime, variable selon la situation des consommateurs, les occupations particulières auxquelles ils se livrent, l’étendue, la valeur et la nature de leurs propriétés.

  4. that the producer (of security) would establish certain penalties for those who committed offences against individuals and those who violated property, and that the consumers (of security) (would) accept being subjected to these penalties in the case where they themselves committed these abuses against person or property;

  5. that (the producer of security) would impose on the consumers (of security) certain obligations for the purpose of assisting it (the producer) in discovering the perpetrators of the crimes/offences

  6. that (the producer of security) would regularly impose a certain premium to cover its costs of production as well as the normal profit (le bénéfice naturel) for its industry, which would vary according to the situation of the consumers, their particular occupations in which they were engaged, and the extent, value, and nature of their property

This key passage would be changed slightly in S11 where Molinari replaced the terms “le producteur” (the producer of security) with “les compagnies d’assurances” (insurance companies) and “les consommateurs” (consumers) with “les assurés” (the insured). The word “prime” (premium) remained the same in both cases. He would return to the terms he originally used in the “La production de la sécurité” article when he quoted this passage in L´Esquisse (1899).

“The 11th Soirée: On Government and its Function" (1849)

Source

Molinari, Gustave de, Les Soirées de la rue Saint-Lazare; entretiens sur les lois économiques et défense de la propriété (Paris: Guillaumin, 1849), The 11th Soirée, pp. 303–337.

Introduction

Six months or so after his JDE article on “La Production de la sécurité” Molinari returned to the topic of the private provision of police and defense in the eleventh “soirée” (chapter) of his book Les Soirées la rue Saint-Lazare which is the form of a discussion between “a Socialist”, “a Conservative,” and “an Economist” over the course of twelve evenings. The discussion of the private provision of security (in Soirée eleven) takes place in a much broader context developed throughout the book concerning the private and competitive provision of many other public goods as well, such as mineral resources, state owned forests, canals, rivers, city water supplies, the post office, public theatres, libraries; and the ending of private monopolies protected by government licences and heavily regulated professions such as bakeries, butchers, printing, lawyers, brokers, funeral parlors, cemeteries, medicine, teaching, and even brothels.

A new twist which he adds in S11 is that he introduces the radically new idea that an actual insurance company might be the type of private company best suited to providing security services for person and property. In “The Production of Security” article he did not specify exactly what kind of company he had in mind other than general references to small local single entrepreneurs, or larger companies based in towns. In S11 he talks about much larger companies ("vastes compagnies”) and even “ces compagnies d’assurances sur la propriété” (these property insurance companies) and how they would have an economic incentive to cooperate with each other in settling disputes between their consumers and compensating them for lost property or violated liberty.

Some of the other issues he deals with in this Soirée are his distinction between free governments and “communist” governments, by which he meant what we might call “communal” or “state monopoly” governments; the pros and cons of centralisation versus decentralisation of state power; his objections to the jury system; and the problem of nationalism.

Molinari’s book aroused considerable opposition in the Political Economy Society where it was debated shortly after it appeared in its October 10, 1849 meeting where not one of those present came to Molinari’s defense.[2] This was the first of three such debates Molinari’s writings triggered on the general topic of the legitimate functions of the state. [3] The sentiments of the Society were summed up by its president Charles Dunoyer who concluded that Molinari had “let himself be mislead by illusions of logic, and that competition between companies exercising government-like functions was utopian.”

Molinari’s Theory of the State I

Revolutions and Despotism (1852)

Source

Molinari, Les Révolutions et le despotisme envisagés au point de vue des intérêts matériels; précédé d’une lettre à M. le Comte J. Arrivabene, sur les dangers de la situation présente, par M. G. de Molinari, professeur d’économie politique (Brussels: Meline, Cans et Cie, 1852), selections from “Les Révolutions et le despotisme,” pp. 81–152.

Introduction

In a lecture given at the Musée de l’Industrie in Brussels, where he was a newly appointed professor of political economy, on 4 October 1852, Molinari presented an economic assessment of the costs and benefits of two important phenomena which France had experienced several times since 1789, that is revolution and despotism. What is interesting about his analysis is that he wanted to do this from the perspective of the “material interests” (des intérêts matériels) of the various parties involved - the ordinary taxpayers, consumers, and conscripted soldiers on the one hand, and the political, military, and economic elites who controlled France on the other. In other words, he was presenting in some detail his theory of class.

The lecture is also interesting because Molinari argues for the first time that he thinks it is the role of the economist to draw up a balance sheet of the costs and benefits of government policies and actions and to come to some conclusion about whether they had been worth while or not. In other words, he wanted economists to be “les teneurs de livres de la politique” (the bookkeepers of politics) (p. 116). In the lecture he begins by examining the costs and benefits of the French Revolution of 1789, and controversially concludes that the costs outweighed the benefits because of the massive loss of lives, destruction of property, and the conscription of productive workers caused by the revolutionary wars, or what he called “ce bilan monstrueux”. He then applies a similar analysis to the recent 1848 Revolution in which he himself had participated.

The second half of the lecture is devoted to an economic analysis of the state, in this particular case to what he called “despotism” in contrast to representative forms of government. This was especially relevant given the timing of his lecture which was given two months before the “Prince-President” Louis Napoléon declared himself “Napoléon III.” Molinari wanted to know what groups or classes supported the rise of a despot like Louis Napoléon and how they expected to benefit from his régime. He focuses on two groups, administrators and senior bureaucrats in the government and the military.

The administrators and senior bureaucrats in any government are what he colorfully calls “des mangeurs de taxes” who push for ever more government expenditure because it is in their professional interests to do so:[4]

Ils vivent du produit des contributions levées sur le pays. Quel est en conséquence leur intérêt immédiat? C’est d’avoir de bonnes taxes à manger; c’est d’avoir un gros budget il faire. Plus les contribuables sont accablés d’impôts, plus l’administration est florissante.

The government is now “a new market where they can practice their industry in a more permanent way” (un nouveau débouché qui s’ouvre d’une manière permanente à son industrie).

The second major group of beneficiaries is the military who push for ever more war since they regard it as “la source de la gloire, de la fortune et des honneurs”.

In opposition to these two groups are the taxpayers (les payeurs de taxes) who are in favour of cheap government and peace. Molinari is thus arguing that there is deep-rooted conflict between these two fundamentally opposed classes, “les mangeurs des taxes” and “les payeurs des taxes”.

Molinari concludes that his warnings about the high costs and low/meagre benefits of despotism on the eve of Napoléon’s new regime would not be heeded, since “malheureusement, on n’écoute guère les économistes.”

Molinari would return to the idea of the conflict between these two classes many times in his future writings.

Nations (DEP 1853)

Source

Molinari, “Nations,” in Dictionnaire de l’économie politique, contenant l’exposition des principes de la science, l’opinion des écrivains qui ont le plus contribué à sa fondation et à ses progrès, la bibliographie générale de l’économie politique par noms d’auteurs et par ordre de matières, avec des notices biographiques et une appréciation raisonnée des principaux ouvrages, publié sur la direction de MM Charles Coquelin et Guillaumin (Paris: Librairie de Guillaumin et Cie., 1852–53), T. 2, pp. 259–62.

Intro

In this article he wrote for the DEP, for which he served as a co-editor especially after the death of the original editor Coquelin from a heart attack soon after volume 1 had been completed in 1852, Molinari seems to backtrack from the radical anarchism he expressed in the “Production of Security” article. Here he seems to adopt a more moderate (but still quite radical) view more like J.B. Say’s of an “ultra-limited” government. In fact, he explicitly denies that political economy is “an-achiste” and states quite clearly that “L’économie politique sainement entendue ne conduit pas plus à la suppression des gouvernements”. Without “un gouvernement régulier” there would be no protection of property, no peace, and thus no capital accumulation which leads to prosperity. Perhaps he had felt the weight of the opposition of the other economists to the ideas he had put forward in 1849 and was attempting to be more moderate in these dictionary articles and was expressing the consensus view of his colleagues and not just his own views.

Nevertheless, Molinari makes a number of statements which have very radical implications. Firstly, he argues that those who want to create a “universal” empire or state of some kind (whom he calls “unitéistes”), whether “la monarchie universelle”, “la république universelle,” or “l’unité de religion” are both morally wrong and doomed to failure. Secondly, he argues that “le morcellement” or “le fractionnement” of humanity into small and autonomous nations is desirable because it keeps political institutions small, cheap, and accountable to the people; it creates competition between nations to adapt “best practice” concerning laws and economic policies which promote freedom and prosperity;[5] and it limits the damage caused by bad policies to only one state, not the entire world. And thirdly, he quotes with approval Say’s very colourful expression (“cette expression pittoresque”) that a government which exceeded his proper bounds was “un véritable ulcère” which the political surgeon has to remove from the body politic or else the patient would die.[6]

His overall conclusion was that “les mêmes pratiques” which govern the operation of private companies (such as competition, cost cutting, providing services to consumers, using the division of labour to improve output) should also be applied to the governments of nations; and that they should also “gouverner aussi peu que possible.” He would go into more detail about what he meant by this in a later work[7] but the implications of using “les mêmes pratiques” in government as in business are quite radical, and so he may not have strayed as much from his earlier radicalism as one might think by reading this article.

The Further Development of Molinari’s Theory of Pure Anarcho-capitalism (1852–1863)

“Les consommations publiques" (1855, 1863)

Source

Molinari, Cours d’économie politique, professé au Musée royal de l’industrie belge, 2 vols. (Bruxelles: Librairie polytechnique d’Aug. Ecq, 1855). 2nd revised and enlarged edition (Bruxelles et Leipzig: A Lacroix, Verbroeckoven; Paris: Guillaumin, 1863).

Vol. 2 deals with “ La circulation et la consommations des richesses,” Part 4 with “De la consommation publique,” and the final 12th lesson covers “Public consumption” in which Molinari continues his discussion of what he calls “political competition”. “Douzième leçon. Les consommations publiques”, pp. 480–534.

Introduction

This extract comes from the lectures Molinari gave as a professor at the Musée royale de l’industrie belge where he moved after the coup d’état of Emperor Napoleon III in December 1851. They were first published in 1855 and a revised edition appeared in 1863.

In a 100 page final section of the Cours d’économie politique dealing with “Consumption” Molinari develops his ideas on the nature of plunder, coerced labour such as slavery, the wastefulness of government spending and monopolies, the private provision of public goods, the proper functions of government in the era of competition, and a restatement of the benefits of what he now calls “la concurrence politique” (political competition, or competing governments) or “la liberté de gouvernement” (this was analogous to “la liberté des échanges” or free trade). The idea of insurance companies providing security services to clients in S11 has been expanded into a more generalized economic theory of the state, how it provides all kinds of services, not just security services, and how this evolves over time towards the future era of competition in which the private and competitive provision of all so-called “public goods” has become the norm.

The important insight Molinari had, with interesting similarities to the Pubic Choice approach to understanding politics, was to treat the state in the same way he would treat a firm or a company, that the people who owned or ran the firm had goals which they wanted to achieve with limited resources, that they responded to changing relative costs and benefits, and that they had to adjust to technological and other systemic changes. The terminology Molinari used to describe the state here is quite instructive. The following is a sample: “les entreprises gouvernementales” (government enterprises), “les entreprises politiques” (political enterprises), “l’industrie du gouvernement” (the industry of government), “une vaste entreprise, exerçant des industries et des fonctions multiples et disparates” (a vast enterprise which carried out multiple and various enterprises), and “ateliers de production de la sécurité” (workshops which produced security). He was even working on a public choice-like notion of “le marché politique” (the political marketplace) in which politicians bought and sold favours in order to get or to stay in power.

The difference between the state treated in this economic fashion and a true firm was that the state had access to coercive powers which were denied most firms, except for those “rent-seeking” firms which could get government privileges or monopolies of some kind. Nevertheless, Molinari thought it was very important to use economics to analyse the operation of the state, especially the “anti-économique” aspects of state activity which led to waste, corruption, and the poor provision of services like security. It was a mistake he thought to exempt the state from the economists’ scrutiny.

He continued to develop his theory of the production of security in the Cours along the following lines: that as economies and trade became more complex there would be greater division of labour in the security industry; he further developed the idea of “nuisance” (harm) which was caused by accidents (like fire or floods) or by theft or fraud, or what might also be called torts, which he thought insurance companies would be especially good at “policing”; that governments could be seen as another way in which risk to individuals and businesses arising from theft or fraud could be managed and reduced with benefits for society as a whole; and that the growing complexity of the market would result in innovative security firms creating new types of law (“une justice ad hoc”) in order to offer new forms of protection for persons and property.[8] Most importantly, he developed a list of reasons why the monopoly provision of security by the state was more costly and less efficient than private companies, all of which were based upon his theory of the natural laws of political economy and how the state violated them.

The first reason he gave was that government monopolies tended to overproduce goods or services beyond the needs of the consumers because, in the absence of prices and freely negotiated contracts, the government monopoly did not know how much production is optimal. A second reason was that government had become too big and complex, and was active in too many fields to be expert in all of them. This also suggests he had an inkling of Hayek’s problem of knowledge which was faced by monopolists and central planners in the absence of adequate information provided to planners by the wishes of consumers and suppliers by means of price signals. A final reason he gave was that firms had a natural size limit (la loi des limites naturelles) beyond which they could not operate effectively. In an insight that suggests thinking along the lines of Ronald Coase’s theory of the firm, Molinari gave as an example the dream of some rulers to build “la monarchie universelle” (the universal monarchy) which would govern huge territories, with millions of people, and supplying them with myriads of services. Molinari thought that the market should determine the optimal size of firms which would best be able to satisfy the needs of its consumers as well as make a profit for its owners.

We see in this extract a practice Molinari used on occasion to disarm critics , that is his “hypothesis” or story of the monopolist grocer (sometimes also the baker) which is a “stand in” for the government’s monopoly of the provision of security.[9] People opposed the introduction of competition into the grocery business because it had always been a monopoly. There is something about the government that made its actions “sublime” and unlike any other. Attempts were made to introduce “a constitution” which would limit any abuses of this monopoly at the expense of ordinary consumers, but these restrictions were always undermined by the political class and all too often became “des instruments d’exploitation entre les mains des classes supérieures” (the tools of exploitation by the upper classes).

The solution for Molinari was to to destroy (démolir) this political monopoly and open it up to competition; to force government institutions to behave in a more economic fashion (such as covering their costs and being exposed to competition on order to lower costs and improve services), and to drastically simplify and reduce the activities of government to its absolute core functions of the protection of its citizens lives and property. These things could be achieved, he believed, under the twin pressure of growing consumer demand for cheaper and better government services, and the threat of the “right of secession”, as was happening in a spectacular way in the United States when he wrote this chapter (1863).[10]

”De l’administration de la Justice" (June 1855)

Source

”De l’administration de la Justice,” L’économiste belge, No. 11, 5 Juin 1855, pp. 1–3.

Introduction

In his economic treatise Cours d’économie politique (1855) Molinari argued that the state was “antiéconomique” because it tried to do too many things at once, did not take advantage of the benefits of the division of labour and specialization, did not cover its costs, and because of the absence of competition did things poorly. In this short article for his weekly journal L’Économiste belge he provides a case study of this very phenomenon, namely the way the Belgian state investigated crimes and punished the perpetrators.

Because the state was “un gouvernement omnibus” and “à la fois juge, gendarme, instituteur, entrepreneur de canaux, de chemins de fer et de télégraphes, fabricant de drains, irrigateur, etc” it was structurally unable to satisfactorily protect the lives and property of its citizens. He takes data on arrest rates and convictions for crimes committed in Belgium between 1840 and 1849 and demonstrates how low the arrest and conviction rate is. Acting once more as “le teneur de livres de la politique” he draws up a general balance sheet “un bilan général” and concludes that the state is so inefficient in convicting murderers that coal miners have a greater chance of being killed in accidents than murders getting convicted and executed for their crimes.

He thought reforming the system was pointless as the incentives of the bureaucracy were so poor and entrenched. Because of the many other tasks the government undertook, if it transferred resources from other areas to devote to better police work the opportunity costs would mean that these areas would then have less resources to do their jobs. As he quoted Adam Smith at the start of the article “il ne faut pas courir plusieurs lièvres à la fois.”

Molinari’s Theory of the State II: The “Tempered” (strengthened, hardened) Republic (1873)

La République tempérée (1873)

Source

Gustave de Molinari, La République tempérée (Paris: Garnier, 1873). Sections I (pp. 5–14), II (pp. 15–25), V (pp. 59–77), and VI (pp. 79–90).

Introduction

Molinari wrote this two years after the socialist experiment of the Paris Commune (March-May 1871) frightened the liberals about the possibilities of a violent socialist group taking control of the government, and 27 years after his first essay on electoral reform (1846) in which he likened the taxpayers to shareholders in a mutual insurance company which would protect their liberty and property according to the amount they had at stake in society and would thus pay for “proportionally.” The book, his first and only entry into the field of political and constitutional theory, was written at a time when the constitution of the Third Republic was being discussed before it was introduced in 1875.

The former explains his very anti-socialist rhetoric, calling their ideas “antisociales,” “subversives,” and “pernicieuses” and the socialists themselves “les apôtres de la liquidation sociale,” “une classe hostile à la propriété,” and “une classe politiquement et socialement dangereuse.” He even comes close to arguing that the new government might need to be able to “repousser par la force une invasion brutale du socialisme révolutionnaire” which it could do by denying even a socialist majority from exercising power in the name of internal security and order: [11]

“il faut encore qu’il soit constitué de manière à en empêcher l’invasion légale. En d’autres termes, il faut que le gouvernement demeure inaccessible aux socialistes, eussent-ils de leur côté la majorité numérique, — sinon point de sécurité intérieure.”

In spite of these words, Molinari actually wanted to introduce a very broad franchise in the new republic that would include anybody who had “civic rights” and who paid taxes. This of course would include all socialists and radicals except for the most violent and those who were convicted criminals.

In his conclusion to the book he returned to some of his favorite political ideas concerning the purpose of government (to protect life, liberty, and property) and who should vote and how people could vote to get this kind of government, namely, all property owners and taxpayers in proportion to the amount of property they owned and paid in taxes.

To achieve this, Molinari drew upon three historical examples for lessons: the relative stability of the Restoration and July Monarchies with their limited voting class of “les censitaires,” and the British and American systems with their two Houses of Parliament and their in-built checks and balances and limited terms in office. His ideal would be a new kind of republic, what he called “une république de compromis, une république tempérée” which would be neither completely “democratic” nor completely “oligarchic” but a compromise between the two.

There would be two Chambers and an executive President. The First or Upper Chamber “une première chambre ou chambre haute” would be made up of no more than 300 people drawn from the highest taxpayers in France (over 200 fr. per annum) whatever might be the source of their income. Their role was to be a conservative or protective force (la forteresse des intérêts conservateurs) which would be able to draw upon their abilities and experience as an elite (“l’aristocratie des capacités” and “la majorité des intelligences d’élite”) to guarantee the nation’s security and the people’s property. They would closely examine any budget or legislation which was brought before them, and would “’approuver ou de censurer les actes du pouvoir exécutif.” Members would sit for 9 years and as in the American Senate, one third would be elected every three years.

The Second Chamber or Lower House would be elected by universal manhood suffrage and its task would be to vote on the budget, and make or reform the laws. The Chamber would represent the interests of “la généralité des contribuables” and would therefore act on their behalf to “consentir l’impôt” and “consentir la loi.” In other words, they would “défendre la bourse des contribuables”. Given the tendency all governments have to increase the number of its functions, to multiply the number of government jobs which it can provide to its supporters, and constantly to increase the burden of taxes, the Lower House would have a particularly difficult task to keep the government limited and in check, and to preserve the essential liberties “des libertés nécessaires” of the people.

Like the American President, the French President would be an “executive” one, carrying out the laws agreed to by the two Chambers. In case of a deadlock, the President could dissolve the Second Chamber and call a new election. The President would be elected by the Lower House from a short list of three candidates chosen by the Upper House (thus excluding the danger of revolutionary socialists getting elected), and would serve for 4 years, again like the American President.

Molinari summarised his case for “une république modérée” by stating that his system would create:

un gouvernement solidement fixé dans la classe qui réunit au plus haut degré la richesse et la capacité politique, préservé d’un autre côté des abus et de la corruption du monopole par l’intervention et le contrôle de la masse de la nation représentée dans la seconde chambre et pourvue des « libertés nécessaires, » ce gouvernement à la fois conservateur et libéral


Molinari’s Gradual Retreat from Strict Anarcho-Capitalism (1880–1908)

”La théorie du progrès et l’évolution économique” (1880)

Source

From L’Évolution économique du dix-neuvième siècle. Théorie du progrès (Paris: C. Reinwald 1880). “Conclusion,” pp. 439–69.

This book originally appeared as series of articles in the JDE:
“L’évolution économique du XIXe siècle,” Journal des économistes, S. 3, T. 45, N° 133, janvier 1877 ; 2e article, S. 3, T. 46, N° 136, avril 1877 ; 3e article, S. 3, T. 48, N° 142, octobre 1877 ; 4e article, S. 4, T. 1, N° 1, janvier 1878 ; 5e économiste, S. 4, T. 2, N° 6, juin 1878 ; 6e article, S. 4, T. 5, N° 13, janvier 1879 ; 7e article, S. 4, T. 6, N° 18, juin 1879.

Introduction

Just before and just after he took over as editor of the JDE in 1881 Molinari wrote a pair of books on political and economic sociology around the theme of the “evolution” and “progress” towards a fully free society. These two volumes constitute a magnum opus of nearly 1,000 pages which were written as a series of articles in the JDE between January 1877 and June 1879; and then August 1881 and December 1883. The first volume dealt with economic evolution and the second volume with political evolution. (It should be noted that Molinari would write two more books on the theme of the evolution of society, La Grandeur et decadence de la guerre (1898) and Économie de l’histoire. Théorie de l’évolution (1908), thus making his magnum opus a tetralogy.)

It is interesting to note that Molinari was not alone in writing such a broad and sweeping survey of humankind’s economic, political, and social development over a span of hundreds perhaps even thousands of years. Herbert Spencer was doing much the same thing in England with his multi-volume works on evolution, especially his Principles of Sociology which began to appear in 1874 and which were not completed until 1896 (a French translation began to appear in 1878). And Karl Marx had begun to do something very similar in his unfinished work Das Kapital the first volume of which had appeared in 1859 and subsequent volumes posthumously.

Molinari’s basic idea in these works was that societies have evolved through a series of three stages (or “l’ère”) based upon how they went about creating wealth: l’ère des temps primitifs, l’ère de la petite industrie, and l’ère de la grande industrie. Each of these eras had their own political and economic organisations which matched the underlying “means of production” (to use a term coined by Marx but which also fits Molinari’s way of thinking as well). Thus, in the “l’ère des temps primitifs” we have a political system based upon the tribe “le régime de la tribu primitive” and economic production based upon communal agriculture “la communauté agricole” and where there is little or no trade with other groups. In the second era, “l’ère de la petite industrie” there is the beginning of the division of labour and trade with others but this trade is very limited and does not extend very far, domestic industry is the monopoly of state protected “corporations” who are able to exclude competitors from entering the business, and weaker members of society are controlled by various forms of servitude and tutelage (“la tutelle”). In this era the monopoly form of government (whether oligarchical or monarchical) matched the economic policy of monopolized industries run by a small group of government owned or favored private interests. However, as markets developed and new ones opened up, as individuals began to specialize in different trades and occupations, as education spread, as “la petite industrie” began to be replaced by more competitive “la grande industrie,” and as the inefficiencies of the old monopolistic ways began to be more deeply felt , the demand for competition and free trade increased to the point where first of all some of the old monopoly practices in the economic realm began to be challenged and then overthrown (e.g. “la liberté des échanges” with the Anti-Corn Law League which opened up free trade in England in 1846), which later spread to the political realm where a similar demand for “la liberty de gouvernement” also began to be expressed.

The third and final era, “l’ère de la grande industrie,” Molinari thought was in the process of emerging during the 19th century was not not yet fully formed but the general outlines were beginning to become visible. This new régime would be one of large scale industry, both national and international, where trade and competition had become universal and unlimited in scope (“la concurrence universalisée”; “des marchés unifiés et illimités”), and liberty as well was entering every aspect of human existence. As he states in the “Conclusion” to the first volume he predicts that the world would one day “devenir un seul et immense atelier dans lequel se casera l’humanité, sans distinction de races, de nationalités, de croyances, tous travaillant pour chacun et chacun travaillant pour tous”.

As this economic transformation of the world was taking place, he predicted a parallel political change would also be taking place. Unfortunately, the political transformation was lagging behind the economic because the ruling elites were reluctant to give up the power and privileges which they had accumulated over the centuries. Nevertheless, older forms of servitude and tutelage were gradually being replaced by “self government” (Molinari frequently uses this English expression) and Molinari looked forward to a future society where “la machinery du gouvernement” (another English word Molinari liked to use) would also feel the effects of unlimited and universal competition. Before this political change could be completed there would have to be a revolution in the way people thought about politics:

Cependant, un moment arrive où une société, dont les conditions d’existence ont changé sous l’influence du progrès matériel, ne peut plus supporter son ancienne machinery de gouvernement. Elle fait alors une « révolution ».

”Les gouvernements de l’avenir" (1884)

Source

From L’Évolution politique et la Révolution (Paris: C. Reinwald, 1884). Chap. X "Les gouvernements de l’avenir,” pp. 351–423.

This book originally appeared as series of articles:
“L’évolution politique du XIXe siècle,” Journal des économistes, S. 4, T. 15, N° 44, août 1881 ; 2e article, S. 4, T. 16, N° 47, novembre 1881 ; 3e article, S. 4, T. 17, N° 2, février 1882 ; 4e article, avril 1882 [can’t find it in book]; 5e article, S. 4, T. 19, N° 8, août 1882 ; 6e article, S. 4, T. 19, N° 9, septembre 1882 ; 7e article, S. 4, T. 21, N° 1, janvier 1883 ; 8e article, S. 4, T. 23, N° 8, août 1883 ; 9e article, S. 4, T. 24, N° 12, décembre 1883.

Introduction

In chapter X of L’Évolution politique (1884) on “Les gouvernements de l’avenir” Molinari continued to explore some of the ideas which he had first expressed in the article “La production de la sécurité” (1849) written 35 years previously. They are now part of a much broader canvass which covered many centuries of historical development and introduced some new twists.

He discusses how the economic changes he discussed in the first volume (L’Évolution économique 1880) will affect what he calls “l’industrie du gouvernement”. As in other industries the spread of the division of labour and competition will inevitably change the way governments function and they too will be run like private enterprises - “un gouvernement d’entreprise”. And just as “la servitude économique” created by monopolies and tariffs lead to the movement to introduce “la liberté des échanges”, so would “la servitude politique” lead to a similar movement to introduce “la liberté de government.” He predicted that not too far off in the future:

Un jour viendra toutefois, et ce jour n’est peut-être pas aussi éloigné qu’on serait tenté de le supposer en considérant la marche rétrograde que la révolution a imprimée aux sociétés civilisées; un jour viendra, disons-nous, où la servitude politique perdra toute raison d’être et où la liberté de gouvernement, autrement dit la liberté politique, s’ajoutera au faisceau des autres libertés. Alors, les gouvernements ne seront plus que des sociétés d’assurances libres sur la vie et la propriété, constituées et organisées comme toutes les sociétés d’assurances.

One historical example he considers is that of the British East India Company which was a privately charted joint-stock company which ruled much of India between 1757 and 1858. He thought this was an example of “une « compagnie de gouvernement »” which with some modifications (such as government imposed limits on how much tax it could raise and guarantees to protect essential individual liberties) might show how alternatives to monopoly government might operate.

Another example was the right of “les consommateurs de sécurité” to secede from the monopoly state and either provide security themselves or contract with another state to do it for them. This could be achieved by “un acte de sécession individuelle par voie d’émigration” or “un acte de sécession collective” like the recently concluded American Civil War.

A third very interesting example was a private version of “la concurrence intercommunale et régionale” which had not emerged in France as a result of the centralisation tendencies of the ancien régime and then the post–1789 French state. Molinari “hypothesized” about “une société immobilière” (a privately owned real estate company) which might go into “l’industrie du logement” (the housing industry) by building entire privately owned and run communities or “les villes”. The company would build the roads and provide water, gas, electricity, and security to those people who rented or bought the houses in their private community. As other private towns were built or older ones grew in size, associations would be established to settle disputes between their members - “une union ou un syndicat permanent pour régler ces différentes questions et les autres affaires résultant de la juxtaposition de leurs propriétés.” These property owner associations would be free to disband or join with others as they saw fit and as economic circumstances changed. The central state would gradually lose its “raison d’être” and its policing and protecting functions would be absorbed into the broader community and its network of associations.

C’est ainsi qu’au lieu d’absorber l’organisme de la société, suivant la conception révolutionnaire et communiste, la commune et l’Etat se fondent dans cet organisme. Leurs fonctions se divisent et la société est composée d’une multitude d’entreprises formant, sous l’empire de nécessités communes qui dérivent de leur nature particulière, des unions ou des États libres exerçant chacun une fonction spéciale. L’avenir n’appartient donc ni à l’absorption de la société par l’État, comme le prétendent les communistes et les collectivistes, ni à la suppression de l’État, comme le rêvent les anarchistes et les nihilistes, mais à la diffusion de l’État dans la société. C’est, pour rappeler une formule célèbre, l’État libre dans la Société libre.

”La liberté de gouvernement" (1887)

Source

Les Lois naturelles de l’économie politique (Paris: Guillaumin, 1887).

This book originally appeared as series of articles in JDE Dec. 1884-July 1885 (300 pp. with appendices):
“Les lois naturelles de l’économie politique,” Journal des économistes, S. 4, T. 28, N° 12, décembre 1884 ; 2e article, S. 4, T. 29, N° 3, mars 1885 ; 3e article, S. 4, T. 30, N° 6, juin 1885 ; 4e article, S. 4, T. 31, N° 7, juillet 1885.

Book 4 “La servitude politique”:
- chap. VII “Insignifiance des formes de gouvernement. Accroissement progressif du poids du gouvernement dans les états modernes,” pp. 182–90
- chap. VIII “Comment les classes gouvernantes maintiennent leur prépondérance. Les impôts indirects. Le patriotisme et l’enseignement officiel”, pp. 191–202
- chap. XIII ”L’abolition de la servitude politique est-elle possible? en quoi consistait la servitude économique. La concurrence et la constitution naturelle de l’industrie” pp. 238–244;
- chap. XIV “La constitution naturelle des gouvernements. La commune. La province. L’état.“ pp. 245–259;
- chap. XV ”La liberté de gouvernement" pp. 260–268.
- chap. XVI “La Tutelle imposée et la tutelle libre, pp. 269–71
- XVII “Comment la Servitude Politique pourra être abolie,” pp. 272–77

Introduction

This large book, the third he had written in the previous 10 years, can be seen as a continuation of arguments about the natural laws of economics (which he had explored in Les Soirées de la rue Saint-Lazare: entretiens sur les lois économiques et défense de la propriété (1849)) and the impact of complete and unlimited competition in the realms of both economics and politics (which he explored in L’évolution économique du XIXe siècle (1880) and L’évolution politique et la Révolution (1884)). He may have written it to console himself and his colleagues that, in spite of the setbacks the liberal movement was experiencing in France with the return of protectionism and the rise of socialism, the natural economic laws which governed the world would lead eventually to both “la liberté de l’industrie” as well as the more difficult goal of “la liberté de gouvernement”. He concludes the book with the statement that:

Les amis de la liberté pourraient donc se croiser les bras et se contenter de « laisser faire » la force des choses pour assister au triomphe de leurs doctrines.

They might have to clear the path and continue to enlighten the people but the end result was not in doubt:

Lorsque l’opinion sera convertie, l’évolution de l’ancien régime au nouveau s’accomplira d’elle-même sans secousses et sans violence, et la servitude politique fera place à la liberté.

The fourth and final part of the book dealt with “La servitude politique” and how it could be “abolished”. In chapter VII “Insignifiance des formes de gouvernement” he shows that no matter what form a particular government took, whether monarchical or republican, or authoritarian or democratic, the tendency in the late 19th century was for all governments to increase their power, the burden of taxation, and of debt. In chapter VIII “Comment les classes gouvernantes maintiennent leur prépondérance” he explains how this was possible through a combination of hidden indirect taxation, and the spread of patriotic views through the press and the state school system. The teaching of Greek and Latin in the state schools he thought was particularly pernicious as it inculcated classical notions of distain for labour and the honoring of martial values which filled the heads of the young men who entered the government bureaucracies.

In a series of five short chapters (XIII to XVII) he shows how the natural law of competition might still be applied to the provision of essential government services. He seems to have abandoned the idea that private insurance companies could provide police and defence services to individual consumers, and had taken up the idea of secession at all levels of local and regional government. The competition between private companies would now be replaced by competition between communes and provinces who would lose their citizens and taxpayers if they did not provide efficient public servies at a good price to their “consumers.” Unhappy consumers could “émigrer dans les communes avoisinantes” or could secede and “former une commune indépendante.” Competition for consumers of public services would not only apply to the communes but also to the provinces in what Molinari called “ce double droit de sécession”. These different levels of succession would force governments at all levels to keep down their costs (taxes) and improve their services. Another way communes and provinces could keep their costs down was to contract out these services to “des entreprises spéciales” which would be private companies which specialized in the provision of public services like police.

However, before “la servitude politique” could be “abolished” the modern state and the vested interests which benefited from it had to be challenged. Molinari recognised that this would be an enormous task as the following passage makes clear:

Calculez d’un autre côté la masse énorme des intérêts qui dépendent de l’État, le nombre et l’importance des fonctionnaires civils et militaires qui émargent au budget, considérez le nombre presque aussi considérable des intérêts engagés dans les monopoles, les privilèges et les protections que l’État accorde et garantit, et que l’abolition de la servitude politique laisserait sans support, et vous aurez une idée de la puissance presque inexpugnable de cette colossale place forte que l’on nomme l’État.

In spite of the problem which faced the Economists Molinari hoped that the “omnipotent state” would eventually run into a fiscal brick wall which would stop its growth for good, namely the fact that its expenses were increasing much faster than its tax base. This is why he thought “Les amis de la liberté pourraient donc se croiser les bras et se contenter de « laisser faire » la force des choses pour assister au triomphe de leurs doctrines.”

”Projet d’Association pour l’établissement d’une Ligue des neutres” (Morale 1888)

Source

Publié par le Times, 28 juillet 1887.

Republished in La morale économique (Paris: Guillaumin, 1888), pp. 431–38).

Introduction

This is an interesting article which Molinari got published in The Times of London in July 1887. In it he puts the case for the creation of a League of Neutral states (such as Holland, Belgium, Switzerland and Denmark under the general leadership of the great free trade nation of Great Britain) in order act as a counterweight to the growing military power of the other large states of Europe, in particular Germany.

The aim of the League would be to “Garantir la paix entre les peuples civilisés et provoquer ainsi le désarmement en rendant les armements inutiles” by pooling their armies and navies. He thought it would the fitting conclusion to the process begun 40 years previously by the free trade and anti-war group, the Anti-Corn Law League led by Richard Cobden.

His argument is that the economies of the European states had become so intertwined and dependent on each other that a war between them would have dreadful consequences, not just for the country which had been invade and conquered, but for all the other non-belligerent countries whose trade would also be disrupted.

By publishing his plan for such an Association in the Times Molinari hoped to win over public opinion in England, which still remained pro-free trade by and large, and to exert pressure on its European neighbors before it was too late. But one might say that it was Molinari who was too late to head off what would become the First World War.

“La décadence de la guerre” (1898)

Source

La Grandeur et decadence de la guerre (Paris: Guillaumin, 1898).

Selected chapters:
- Chapitre IV: Les intérêts qui déterminent la politique pacifique ou belliqueuse des gouvernements des principaux états modernes, pp. 113–26.
* Chapitre VI: Le bilan des guerres des états modernes. la paix armée, pp. 142–50.
- Chapitre VII: Les chances de paix et les risques de guerre, pp. 151–59.
* Chapitre VIII: Les chances de paix et les risques de guerre (suite), pp. 160–72.

Introduction

Ten years after he wrote his appeal for a League of Neutral Powers Molinari returned to the problem of war in yet another book (this is perhaps his 39th book) in which he argued that, if war had been necessary at some time in the past to secure the borders against barbarian invasions, in the present world of international trade and the division of labour war had completely lost its “raison d’être” and had become “decadent”.

As he had done before, Molinari examines those interests and “classes” who benefited from war and continued military spending in time of peace (des fonctionnaires militaires et civils), and draws up a balance sheet showing the costs/debts (le passif) and benefits/assets (l’actif) of war and peace. He had first attempted to do this in his essay Les Révolutions et le Despotisme written at the end of 1852 where he argued that economists were “the book keepers of politics”. In these chapters he provides a brief survey of the major states of Europe and America and identifies the same groups who benefited from war no matter what particular form of government they lived under. These were the officer class, “les fonctionnaires militaires et civils”, appointed or elected politicians (which he now describes as “la classe de politiciens”), and various banking and industrial interests who benefited from lending money to government to fight wars or making war materiel.

Under the costs of war he includes the “dépenses extraordinaires occasionnées directement” such as the loss of life, the destruction of property, and the “l’impôt du sang ou du service obligatoire” paid by the young men who have been conscripted into the new mass armies, as well as the “dommages indirects” such as economic recession, the depreciation of money caused by inflation, and debts which have to be paid off. All these costs he argues are borne by the ordinary citizens and tax payers.

On the other hand, the benefits of war and “the armed peace” (ce régime de paix armée à outrance) are the small minority of individuals who enjoy an expanded and protected “débouché assuré’ in which they can practice their trade of war and enjoy the prestige and fame of leading the country into battle: the officiers, bureaucratic functionaries, and politicians. Molinari notes in particular “Les banques d’État ou les banques privilégiées” which enable the government to fund wars without the need to impose heavy taxation out front, but instead to hide the true cost of war by lending money which may take decades to pay off after the war is over.

Molinari is not optimistic about the chances for preventing another war in the near future and concludes that

dans tous ces États, quelle que soit la forme de leur gouvernement, monarchie absolue, constitutionnelle ou république, la direction des affaires publiques demeure entre les mains d’une classe intéressée à la persistance de l’état de guerre et de l’énorme et coûteux appareil de destruction qu’il nécessite.

”La constitution libre" (1899)

Source

From Esquisse de l’organisation politique et économique de la société future (Paris: Guillaumin, 1899).
- Chaps. III, IV, V. “La constitution libre,” pp. 69–93.
- And chap. VI La sujétion et la souveraineté individuelle, pp. 94–100

Introduction

This late summary of Molinari’s views is interesting as it was only the second book of his translated into English in his lifetime. (The other was Religion (1892, 1894)).[12] This was a pity as he had backtracked a bit from his earlier radicalism concerning private insurance companies providing police and other security services, as well as from his later idea of “la liberté de gouvernement”. Nevertheless, his views as expressed in this book were far more radical than those of his colleagues even if they were not as radical as the views he expressed when he was 30 years old.

Where he changed his mind was the idea of there being a few things which were a “collective good” which private businesses or individuals could not provide and which had to be provided by the community. He now thought that the provision of security was such a good which was “naturellement collectif”. Where he differed from other people who thought of police and defence as “public goods” which could only be provided by the state was his belief that smaller political communities had the right to secede from the central state if they did not like the “service” they were getting, that private real estate companies could build private cities where all these public goods would be provided as part of “buying into” the community, and by introducing competitive market forces into the provision of police and defence by “contracting out” to private firms and not providing them as a protected and subsidised government monopoly. If he no longer talked so much about individual “consommateurs de la sécurité” and the entrepreneurs who would provide them with the service, he still quoted the three conditions for the competitive provision of security which he had set out in his path-breaking 1849 article. What had changed was that he now referred to “la nation” or its “délégués” or “des mandataires” as the ones entering into contracts with private security providers, not individual consumers of security services.

“Le problème du gouvernement individuel” (JDE Dec. 1900)

Source

”Le problème du gouvernement individuel,” Journal des économistes, S. 5, T. 44, N° 3, décembre 1900, pp. 321–39.

Introduction

Within Molinari’s work there is a tension between his support for, on the one hand, individual liberty and what he calls (in English) “self government” or here “le gouvernement de l’individu par lui-même”, and on the other hand, for “la tutelle”. As part of his theory of history, the weak, the incapacitated, and the ignorant need guidance from their “superiors” for as long as they unable to care for themselves and their families “utilement”.[13] In the ancient and medieval world this tutelage was provided by powerful kings, the military, the instituions of slavery and then serfdom, a highly regulated economy of “corporations” and guilds, and the church. Part of the transition to a modern world of political and economic freedom was the gradual escape of more and more individuals from “le régime de la tutelle” to “le régime de la liberté”.

However, by the end of the 19th century Molinari believed that the codes promulgated and enforced by the state and the church were breaking down and were no longer providing ordinary people with the moral guidance they needed. The government regularly broke its own moral code by taking from some people (ordinary taxpayers) and giving to others whom it favored (special interests, members of the ruling elite). Molinari summed up these favored groups in the following way: “le politicianisme, l’étatisme, le militarisme et le protectionnisme”.

The church did much the same by pursuing “l’intérêt temporel de clergé” in order to “augmenter leurs revenus”, and by refusing to modify “les dogmes immobiles des anciennes” to fit the demands of modern science and the needs of the modern economy.

In several works Molinari talks about private and voluntary alternatives to state provided tutelage (or what he called “la solution socialiste du problème”) as a way of bridging the gap during this transition period. In this late work, he is still hopeful that this will happen but he has become discouraged by the behavior of modern voters who behave as if they want a system of state tutelage to continue. He sadly notes how the majority of voters do not use their right to vote to further “l’intérêt général et permanent de la société” but rather put their vote “au service d’intérêts particuliers, — intérêts de leur industrie; de leur profession ou de leur localité”. Since past experience showed that limiting the right to vote did not work either, the solution he believes is to drastically limit the powers and the functions of the state, and thus limit its ability to give favors to some groups at the expense of others. Only then will ordinary people regain their respect for the laws and the moral codes which lie behind them and thereby begin to learn how to be free and responsible individuals who can “govern themselves.”

VII. Last Words on the Matter (1901–1911)

Summing up the liberal successes and failures of the 19th Century (January, 1901)

Source

“Le XIXe siècle”, Journal des Èconomistes, S. 5, T. 45, N° 1, janvier 1901, pp. 5–19.

Introduction

For Molinari the distinguishing feature of the 19th century, which made it different from all previous centuries in human history, had been the “prodigious” increase in productive power (le développement extraordinaire de la puissance productive de l’homme) made possible by economic liberty and the industrial revolution. Wealth in the United States had doubled in the second half of the 19th century and it had increased at twice the rate of population increase in Western Europe in the same period. The introduction of steam power had vastly increased the productivity of human labour, whilst the quality of labour had changed as a result of factory production, city life, and international trade. The “ties of solidarity” among people (les liens de solidarité entre les hommes) had multiplied as opportunities for trade and cooperative economic activity had developed. Molinari believed that, in the 19th century, the system of isolated and hostile states which had emerged in the 18th century had been replaced by nations linked together by international trade and mutual economic dependence. War and economic antagonism in the 18th century had been replaced, for a brief period at least, by peace and prosperity.

The key period of the 19th century for Molinari had been the two or three decades of the 1840s to the 1860s when Britain took the momentous step towards free trade, with the abolition of the Corn Laws in 1846. This liberalisation of trade enabled Britain to leap ahead of the other European nations in economic development and wealth creation, thus placing strong competitive pressure on them to do likewise. The Cobden-Chevalier free trade treaty between France and Britain in 1860 was a key part of the “internationalisation of progress” (internationaliser le progrès lui-même). For a brief period in the mid–19th century it seemed possible to liberals like Molinari that peace and free trade would ”rule the world" (désormais régir le monde civilisé).

But unfortunately, like someone who has just won a huge amount of money in a lottery, Europeans in the late 19th century were not able to use this new-found wealth wisely. Traditional ruling elites from the landed aristocracy and the military remained politically powerful and resisted the process of economic liberalisation which brought in its train international peace and solidarity between peoples. The political agenda of the old ruling elites in the second half of the century had been to forge new coalitions with the two new classes which were emerging from industrialisation - wealthy industrialists and the urban working class. The traditional military elites forged an alliance with the new industrialists and the new democratic political parties to channel industrial technology and tax money into expanding and updating the army and navy, thus creating a new wave of militarism and imperialism from the 1870s onwards. With the notable exception of Britain which retained its policy of free trade, in Europe and America landed and industrial elites forged an alliance to reintroduce tariffs which retarded economic development, inflamed international rivalry, and placed a large burden on ordinary consumers and taxpayers, thus hampering their rise out of poverty. The result was a return to economic protectionism and ultimately tariff wars between the major powers.

In addition to the rise of militarism, imperialism, and protectionism in the second half of the century, there was also the growth of what Molinari called ”l’étatisme“ (or ”fonctionnairisme”) or even in some circumstances “the leprosy of Statism” (la lèpre de l’Etatisme). In his view, the state is a mechanism which enables a small group of people (perhaps 10% of the population) to gain economic and political benefits for themselves at the expense of ordinary taxpayers and citizens. In pre-democratic and early industrial societies, the state was the tool of the traditional landed, military and commercial elites. With the extension of the franchise to most working males in the late 19th century there arose a new, more numerous group who wished to use the state to gain benefits for themselves at the expence of others. Labor and socialist parties emerged to service the political needs of the newly enfranchised working class. Traditional conservative parties and even the more recently formed liberal parties adopted parts of the socialist political and economic agenda in order to appeal to the new electorate. The result, in Molinari’s view, was a major unraveling of liberal reform and a defeat for the “party of cheap government” (le gouvernement à bon marché) or the “party of the least government” (le parti du moindre gouvernement). The state expanded rapidly in size at all levels (local, departmental, and provincial) in order to provide jobs for the new political constituencies, thus creating a powerful mechanism for patronage and vote-buying at election time. Entire sectors of the economy had been nationalised or “municipalised” (such as gas, water, electricity, post office, railways) for the same purpose. The result was statism, “fonctionnaireisme”, or “socialism”, which increased the number of people dependent upon the state for income, raised taxation for the ordinary taxpayer, and caused economic losses due to the higher cost and greater inefficiency of state-supplied services.

Molinari was very concerned about the direction European society was heading at the turn of the century. Although technology and industrialisation and international trade had vastly increased wealth (and seemed ready to continue doing so in the new century), the combined effect of protectionism, militarism, imperialism, and statism (especially in its new guise of socialism) would result in economic breakdown, wars unprecedented in their destructiveness, political tyranny and socialist revolution. One of the biggest problems was government debt which he estimated, if it kept increasing at current levels, the total public debt of the European nations would reach the figure of 400 billion by the year 2000 which was an economic burden he predicted wold be too great for the wealth creators to sustain. In his role as “the bookkeeper of policy” (le teneur de livres de la politique) Molinari concluded that at the time of writing this essay “en regard des progrès qui constituent son actif, elles ont produit un passif qui a absorbé, sinon la totalité, au moins une part trop considérable de cet actif de progrès.”

However, Molinari still remained hopeful that the principles of peace and free trade would be rediscovered sometime in the future, but not until after civilisation as he knew it had been destroyed.

Predicting the Catastrophes of the 20th Century (January, 1902)

Source

“Le XXe siècle”, Journal des Èconomistes, S. 5, T. 49, N° 1, janvier 1902, pp. 5–14.

Introduction

Molinari had very little which was good to say about the state. Such was his dislike of the state and its “spirit of monopoly” (l’esprit de monopole des classes gouvernementes et légiférantes) that he labeled “statism” a kind of “leprosy” (la lèpre de l’Etatisme) which ate away the wealth created by private economic activity. In autocratic states like Russia, with most of the population excluded from having any say in how they were governed, it was not surprising that the most powerful members of the bureaucracy, the landed nobility, and the owners of large industry would join together to exploit the taxes and tariffs imposed by the state on the mass of the people. What was surprising was that this same process took place in the so-called “constitutional states” (les pays dits constitutionnels) like France, where a growing percentage of the population could participate in elections. In both types of states the same class structure emerged - a class of “budget eaters” (“cette classe budgétivore”) living off the productive activity of the mass of taxpayers and consumers.

The newest manifestation of statism in the late 19th century was socialism. Like any form of statism, Molinari opposed it because it violated private property rights, individual liberty, and the natural laws of economic activity. In its parliamentary or social democratic form, socialism, Molinari predicted, would end up like any statist regime - a small group of people would control the mechanisms of power and operate them for the benefit of a few at the expence of the majority. One of the innovations socialism promised was to open up government jobs and state owned industries to a broader group of people who had been excluded from office-holding in earlier regimes (la clientèle du collectivisme). The consequence of this democratisation of the state would be a huge increase in taxes to pay for the new “bureaucratic class” (la classe bureaucratique) which lived off the state and a crippling of economic productivity as entire sectors of the economy were nationalised or heavily regulated by the economic planners. In Molinari’s view, an even more dangerous type of socialism was revolutionary socialism which came to power by overthrowing the old ruling class in a violent and bloody revolution. However the socialists came to power, the final result was a new form of class rule and the spread of “fonctionnairisme” (le fonctionnairisme).

Molinari was pessimistic about the future for many reasons. Perhaps in the very long term (a century or longer) he was optimistic that people would eventually come to realise that free trade and peace were the only way to ensure steady wealth creation for all classes in society and so they would eventually eschew war, protectionism and socialism. In the meantime, he was very pessimistic about the short to medium term (the next 50 to 100 years) because the forces he could see at work at the turn of the century were very powerful and would have to work their way through society before their harmful effects would be seen by all. If the first couple of years of the new century were anything to go by, he predicted that the new century would be much like the old. All states would continue to follow “a policy of waste and privilege” (cette politique de gaspillage et de privilège) with increasing state debt, increasing levels of tariff protection, higher taxes, and greater risks of war.

Molinari concluded his article on the 20th century in 1902 with a more pessimistic analysis of the possible direction political conflict would take. His prognosis for the 20th century was that the struggle to control the state would again be a two-sided affair between the conservative party and the socialist party. The liberal party would disappear and the conflict between the conservative party and socialist party in the 20th century would be even more bloody and destructive than the struggle between the conservatives and the liberals had been in the 19th. Molinari predicted that a series of bloody wars, revolutions and colonial conquests would break out in the medium term, with a deleterious impact on individual liberty and on wealth creation. He thought the violence which would be unleashed in the 20th century’s class wars between the conservative party and the socialist party would be unprecedented in human history. Molinari “the book keeper” concluded sadly that the liabilities (passif) built up in the late 19th century would continue to build well into the 20th.

Only after wars and revolutions had devastated 20th century society would a new liberal party emerge. This new anti-socialist and anti-protectionist party - what he called “le parti du moindre gouvernement” - would emerge eventually out of the economic rubble. However, he worried how such a new liberal party might attract supporters since it had no political or economic privileges to dispense to favoured businesses, no promotions or sinecures to offer the soldiers and the politically ambitious, no spoils of office to distribute. His only hope was that liberal principles would eventually appeal to enough people to make such of party of liberty viable, some time in the 20th century.

“Where is Utopia?” (1906)

Source

"Où est l’Utopie?,” Questions économiques à l’ordre du jour (Paris: Guillaumin, 1906), pp. 367–87. Originally published in JDE: “Où est l’utopie ?,” Journal des économistes, S. 6, T. 3, N° 2, août 1904.

Introduction

A common rhetorical strategy Molinari used when he wanted the reader to consider his radical liberal and anarcho-capitalist ideas was to ask them merely to consider it as “an hypothesis”. He did this several times with his story of “the monopolist grocer” (or sometimes a baker) where the reader had to imagine the objections of a town’s inhabitants to the argument that there should be a completely free, open, private, and competitive provision of groceries after centuries of there being only one, monopoly grocer in the town. In this late article written for the JDE in 1904 he again asks the reader to make an hypothesis - to consider his utopian vision of a fully free society - “un seul et vaste marché”, which suggests his radicalism had barely weakened over the years and that his vision of a completely free market in everything operating everywhere was still with him. When compared to the future which he thought lay in store if the current regime of protectionism, statism, and militarism continued to expand, or to the future proposed by the socialist parties of government planning and regulation of the economy and society in general, then his liberal utopia did not seem any more utopian than theirs did:

Faisons maintenant une hypothèse. Supposons que cette action de la concurrence puisse, un jour, s’opérer sans obstacles sur toute la surface du globe et dans toutes les branches de l’activité humaine ; que tous les marchés, maintenant encore séparés par des barrières naturelles ou artificielles, ne forment plus qu’un seul et vaste marché …

Nous convenons volontiers que cette hypothèse peut sembler chimérique, mais lorsque nous considérons l’avenir que nous prépare le régime protectionniste, étatiste et militariste actuellement en vigueur dans toute l’étendue du monde civilisé, et celui par lequel le socialisme se propose de le remplacer, nous nous demandons si cet avenir ne serait point par hasard encore plus utopique que le nôtre.

Let me now put forward a hypothesis. Let us suppose that one day this process of competition is operating across the entire surface of the globe and in all areas of human activity without any obstacles in its way; that all the markets which are currently separated by natural or artificial barriers now make up one single vast market …

We readily agree that this hypothesis might seem fanciful, but when we consider the future being prepared for us by the protectionist, statist, and militarist regime which is at present in power throughout the entire civilised world, and that which the socialists plan to put in its place, we have to asks ourselves if this future wouldn’t end up being even more utopian than ours.

He argues that some aspects of his utopian vision had already been reached with the globalisation of the world market which had been underway for a couple of decades. If trade in goods had become liberalized it was also clear that some markets had remained shackled and highly regulated, such as the labour market (which was one of his pet ideas). Even worse, was that some aspects of a liberal “dystopia” were increasingly visible which might undo all the previous good work in expanding free market, most notably because of triple threat of “le protectionnisme, l’étatisme et le militarisme.” The last two in particular had led to a huge growth in the tax burden, especially for war and social programs, resulting in “un budget parasite.” Once again, he returns to quoting J.B. Say’s idea that these massive budgets were the “ulcères les gouvernements de son temps” and asks what Say would think of the “ulcerous budgets” of his own day.

Just as industries compete against each other for customers within a market , political ideologies compete for supporters and voters in the political market. All political ideologies Molinari believes have their own utopian vision of what a perfect society wold like. He dismisses the socialist vision as “la plus invraisemblable des utopies” and the conservative one as a proven failure. Yet both traditions had a lot in common, as they were both “également étatistes.” Unfortunately the liberals of his day were not good advocates of their utopian visions and Molinari feared that only after the inevitable failure of their utopian visions in the near future would people finally realize where the true utopia lay. He hoped that some future liberals like him would be around to pick up the pieces:

On pourrait dire d’eux ce qu’on disait des doctrinaires de la Restauration: qu’ils tiendraient sur un canapé. Mais ils ont cette fortune de posséder comme auxiliaires leurs adversaires eux-mêmes. Il leur suffirait de laisser faire le militarisme, le protectionnisme et finalement le socialisme pour avoir gain de cause. Car un moment viendra où l’Etat, soit qu’il demeure dans les mains des conservateurs ou qu’il tombe dans celles des socialistes, pèsera sur la société d’un tel poids qu’elle cessera de pouvoir le porter. Souhaitons qu’elle n’attende pas ce moment-là pour savoir où est l’utopie.

“Le vol et l’échange” (1908)

Source

“Le vol et l’échange,” Journal des économistes, S. 6, T. 19, N° 1, juillet 1908. Reprinted in Ultima verba (1911), pp. 3–31.

Introduction

This article is interesting because in it he restates one of his key ideas about there being two different means of acquiring wealth - either by means of peaceful production and exchange, or by means of violence and theft; he summarizes his theory of the history of the emergence of the state and the ruling class which controls it; and discusses the nature of the class warfare which had emerged in France in the late 19th and early 20th centuries and his predictions about how this would play out in the future.

In his history of the emergence of the state Molinari uses a concept popularized 100 years later by the American economist Mancur Olson in his book Power and Prosperity (2000).[14] Olson distinguished between “roving bandits” who pillaged productive farmers and then moved on to other groups to do the same thing; and “stationary bandits” who settled down among the farmers and exacted payments from them on a regular basis, in return for providing them with “security” from other roving bandits. The terminology Molinari used for the productive farmers was “les tribus industrieuses” and for the bandits “les tribus qui vivent de vol” some of whom eventually became “les fondateurs d’Etats” and defended the productive farmers from other roving “barbarian” invaders. Thus began the uneasy relationship in Europe between “la population assujettie” and the ruling class which continued up until Molinari’s own day.

With the dramatic rise of modern industry unleashed by competition, free and global trade, and secure property rights in the 19th century, a struggle eventually emerged between “une bourgeoisie industrieuse et l’aristocratie gouvernante”, the latter enjoying “un monopole permanent” of control of the state. With the rise of democracy and universal suffrage modern political parties emerged with were able to replace the permanent monopoly of power of the traditional elites with “le monopole temporaire d’un parti.” In the second half of this article Molinari explores the significance of this profound political change.

“Las bourgeoisie industrieuse,” which tends to favour free trade and peace, formed “un parti libéral” and fought for liberal reforms in the mid–19th century. With the emergence in the late 19th century of a resurgence in militarism, on the one hand, the rise of socialism and on the other, the liberal party split. Some of the wealthier members allied themselves with the older “aristocratic party” and entered their government to work in the foreign affairs department, or sold their services to it as producers of war matériel or bankers providing the government with loans. Another faction of the liberal party joined the radical working class or socialist party. The end result by the turn of the century was a serious weakening the liberal party and the emergence of a new kind of party politics which would have dire consequence for the future of liberty in Europe.

The things Molinari feared most were the following: “une nouvelle forme de la corruption”, namely “la corruption électorale” where voters would sell their votes to ambitious politicians for tax-payer funded benefits; the use of the threat of external wars “comme un moyen de conservation à un chef de gouvernement autocratique ou constitutionnel, menace par une opposition à laquelle elle permet d’imposer silence”; and the rise of public debt to pay for both these things, a burden which would be born on the shoulders of future generals and which he regarded as “un simple vol.”

His pessimistic conclusion was that, without a change in the way people thought about “government theft” “on peut craindre que le vol sous ses formes multiples ne continue à détruire plus de richesses que n’en créent la production et l’échange.”

“Crisis and Collapse” (La crise et la décadence) (1908)

Source

From Économie de l’histoire. Théorie de l’évolution (Paris: Félix Alcan, 1908), pp. 219–257.
- “Chap. XII ”La crise“ and
- Chap. XIII ”Risques de décadence et chances de progrès"

Introduction

This comes from Molinari’s fourth book on the economic and political evolution of society and it is a much more pessimistic vision of the future. In the closing footnote on the last page he reveals that he had hoped that his 1899 book Esquisse de l’organisation politique et économique de la société future would have shown the French people how they could have peacefully applied the natural laws of political economy to avoid the crisis caused by “ la persistance artificielle de l’état de guerre et du régime de monopole et de protection qui lui était adapté”. Now he is no longer so confident. In 1908 it appeared that things were going in the other direction. Instead of trying to remove the state from the special interests which were trying to take control of it for their own benefit (enlever l’Etat-assureur aux intérêts particuliers qui s’en disputent la possession) the voters and the citizens were tryin to make “cette vieille et lourde machine” of state more complicated and more of a burden. The result he predicted would be a crisis and a high risk that France would collapse under the weight.

The crisis was already present in the form of high and increasing taxes and more and more public debt which the people seemed to accept as normal and inevitable. He estimated that among the European powers nearly half of each nation’s wealth was taken by the state for its own use. Molinari believed there were several causes of the increases in taxes and debt, namely war, the rise of socialist parties, the return of protectionism, and private monopolies. Concerning war, there was now a state of “les armements permanents” caused by the arms race which was underway between the other great powers of Europe. By introducing such high spending on the military the state had created an expanded “market” for the services of “ses fonctionnaires militaires et civils” as well as for the manufacturers of weapons and other war material (fabricants et commanditaires de l’appareil de guerre).

Another cause was “l’accession d’une classe de plus en plus nombreuse à la possession de l’Etat” in order to direct tax-funded benefits and special privileges in their direction. With the rise of organized and politicized trade unions and the socialist parties there could erupt a new kind of “la guerre civile” between the workers and the capitalists. Under pressure from these new groups the state felt obliged to nationalise industries such as the post and education in order to provide them with jobs and to subsidize the costs of these goods and services in order to fend off any political uprising.

Private industry was also lobbying strongly for government support such as subsides, tariff protection, or the outright grant of monopoly privilege. There were now “les industries de concurrence” which made money only by providing consumers with goods they wanted at prices they could afford; as well as “les industries d’Etat” which were state controlled and subsidized for any losses they might make. This constituted for Molinari an unsustainable “régime de demi-monopole et de concurrence faussée” which interfered with the natural economic processes of competition, profit making, and the development of markets.

In sum, there was now in France

“une classe en possession du pouvoir politique… vivant de l’Etat, puisant des moyens d’existence assurés contre la concurrence dans les industries qu’il accapare ou protège, elle est intéressée non seulement à les conserver, mais encore à les multiplier. Elle est étatiste, militariste et protectionniste.”

His great fear was that the burdens placed on the economy by war expenditure, subsidies and protection to private industry, the state ownership of industry, and the increasing number of people who worked for the state, meant that France already was in a state of crisis which might ultimately lead to collapse and ruin:

Cependant cette part déjà insuffisante est chaque jour menacée d’être restreinte davantage tant par les dépenses rapidement croissantes des guerres et des dettes de l’Etat que par la diminution de la productivité des industries qu’il accapare en les soustrayant à la concurrence. On peut donc craindre que les forces destructives de la richesse ne finissent par l’emporter sur les forces productives et que l’évolution ne se termine, après une période de décadence, par la ruine.

Molinari’s “Last Words” (1911)

Source

Molinari’s last published work (the year before he died) was appropriately called Ultima Verba: Mon dernier ouvrage (Last Words: My last work) (Paris: V. Giard et E. Brière, 1911). “Préface” pp. i-xvii.

Introduction

This Preface was one of the last things Molinari wrote before his death in 28 January 1912 so it is fitting that we end our collection of his writings with this. What is striking is that after nearly 70 years he is still advocating the same set of principles of “la liberté des échanges et la paix” and cheap government (‘le gouvernement à bon marché”), even though he now admits “ces idées fondamentales sont partout en baisse”.

This has come about, he believes, because of four things:

  1. “une recrudescence de l’esprit militaire”
  2. “une recrudescence de protectionnisme”
  3. the rise of socialism as both an ideal and an organised political party
  4. the bureaucratization of an expanded interventionist state and its resulting “fonctionnairisme”

Writing only a couple of years before the outbreak of the World War in August 1914 it is not surprising that he should include the growing threat of war as a key concern of his. He lists the 12 major conflicts both within Europe and elsewhere in the world which have taken place since the mid–19th century when he wrote his paean to peace L’Abée de Saint-Pierre (1857). All he notes here, since he has covered this topic in depth elsewhere, is that war is more costly than people ever imagine beforehand, that the benefits are concentrated in the hands of a very small minority (the generals and politicians who are able to advance their careers, the manufacturers of munitions and other war matriel, and the bankers who lend the state money to finance the wars), and that the direct and indirect costs of war are always met by the present and future taxpayers as well as the young men who have been conscripted into the armies (what he called “l’impôt de sang”). He also mentions in passing the fact that the technological innovations which have brought such prosperity to Europe and North America have also increased the destructiveness of war, although he could have no idea how destructive as he died before the carnage of WW1 revealed this to the world. When he was writing only a small handful of people like Jean de Bloch had any inkling of what would lie ahead and they were largely ignored. [15] In spite of these concerns, Molinari still had hope that enough people would eventually see how destructive and costly modern war had become and would thus put pressure on their governments to pull bank from the brink.

However, in the short term he was less optimistic as he believed that the cause of liberalism had lost the moral battle with statism in its various forms. People had lost their earlier horror of war as fighting had become increasingly displaced to countries outside Europe in their colonies and the third world and people had forgotten the horrors of the wars which had been fought on European soil. The collective memory of the Napoleonic wars had faded and would only be revived on the fields of Flanders in WW1.

People had also lost their distrust of government and their wariness of high government expenditure and public debt. The latter he thought was particularly pernicious and was an example of “un simple vol” which was inflicted unjustly on future generations of taxpayers. Whether the government was run by “constitutional republicans” or the new breed of socialist politicians the end result would be the same: socialism under one name or another, socialism directly or indirectly, socialism “from below” (socialisme d’en bas) or “from above” (socialisme d’en haut). All democratic and constitutional governments were heading in the same direction, he thought. They were all becoming more interventionist, bellicose, and protectionist, and hence more expensive. This was partly driven by the self-interest of the ruling politicians and bureaucrats (“la classe bureaucratique”), and partly by deceived and confused voters who sold their votes to the highest political bidders during the elections.

The opposite, Molinari’s ideal, was cheap government (“le gouvernement à bon marché”) and this was increasingly becoming an unreachable utopian ideal by 1911. Even so, he still argues for the idea of a government run like an insurance company in which tax-payers were treated like “actionnaires” or shareholders in the company or the insured paying premiums (“les primes”) according to the risks they undertook and the amount of property they wished to insure from damage or theft. Government to him, while now no longer a private insurance competing for business in the security industry as he had imagined in 1849, should still be run like a private company to make it more efficient and much cheaper.

But since this was unlikely in the short term, Molinari’s longer term view was much more pessimistic. He thought that the modern bureaucratic, socialist, militaristic, protectionist state would one day crush society under the weight of debt and taxes like other civilisations had succumbed in earlier centuries. What would make this collapse more significant was what he calls “un nouveau mode de destruction” - massive public debt and taxation:

la richesse diminuera et les dettes s’accroîtront jusqu’à ce que le pays ne puisse plus en supporter le fardeau. Peut-être est-ce ainsi que, selon toute apparence et malgré le développement progressif de la civilisation, se perdront les Etats les plus florissants. C’est de cette sorte qu’a péri le monde romain, bien autrement civilisé que la nuée des barbares qui l’entourait. Les vices intérieurs et les dépenses excessives écraseront la civilisation actuelle comme les Barbares l’ont écrasée, dans l’antiquité. Ce sera un nouveau mode de destruction non moins certain et aussi complet que le précédent.

Endnotes


  1. Adam Smith, Wealth of Nations , [V.i.b] part ii: Of the Expence of Justice.  ↩

  2. The minutes of the the October meeting of the Société d’Économie Politique in JDE, October 1849, T. 24, pp.314–316. Dunoyer’s comment is on p. 316.  ↩

  3. The second was held on January 10, 1850 and the third on February 10, 1850.  ↩

  4. Molinari would also use another colorful term to describe the class of people who lived off taxpayers, “la classe budgétivore” (the budget eating class) in “Le XXe siècle” (1902).  ↩

  5. Molinari would take up this idea again in “Les gouvernement de l’avenir” in Évolution politique (1884) where he talked about privately owned and operated towns or communities which would compete for residents, and “Les liberties de gouvernement” in Lois naturelles (1887) where he talked about competition between communes and provinces within the country seeking to attracted residents and taxpayers from elsewhere.  ↩

  6. Molinari uses the word “plaie” (wound, sore, or plague) in Les Soirées to describe the government and its actions. He goes a step further in his article “Nation” in DEP where he describes governments which overstep the boundaries of their proper sphere of activity as “ulcerous” and the economist as the surgeon who must cut out the dead or cancerous flesh from the social body in order to save its life; and in the article “Ville” (Towns), DEP, T. 2, pp. 833–38, he describes high-taxing and spending city governments as “cette peste économique” (this economic plague).  ↩

  7. See the section on “Les consommations publiques" in Cours d’économie politique (1863), tome 2, pp. 480–534.  ↩

  8. See “Le problème du gouvernement individuel” (JDE Dec. 1900) for a discussion of the several legal codes (“un triple code des lois”) which were necessary to help people learn to be free and responsible individuals: the civil and penal code, the religious code, and the code of custom and public opinion.  ↩

  9. the story of the baker??  ↩

  10. See his discussion of secession in “Le gouvernement de l’avenir” in Evolution politique (1884) on individual or collective secession; and “La liberté de gouvernement” in Les lois naturelles (1887) on the right of communes and provinces to secede.  ↩

  11. Molinari also talks about the high cost to the state of countering “l’invasion du socialisme” which he considers to be a kind of “l’état de guerre” in the section on “Le Socialisme” in La Grandeur et decadence de la guerre (1898).  ↩

  12. Molinari, Gustave de. Religion, translated from the second (enlarged) edition with the author’s sanction by Walter K. Firminger (London: Swan Sonnenschein, 1894). And Gustave de Molinari,The Society of Tomorrow: A Forecast of its Political and Economic Organization, ed. Hodgson Pratt and Frederic Passy, trans. P.H. Lee Warner (New York: G.P. Putnam’s Sons, 1904).  ↩

  13. As was typical for the time Molinari included women in the group who needed tutelage. He opposed granting women the right to vote, not because he is anti-woman “antiféministe,” but because “plus il y aura d’électeurs, plus les résultats seront mauvais. ”
    Another important way individuals learnt “how to be free and responsible individuals” was the moral lessons they learned from “un triple code de lois” which consisted of the civil and penal code which taught them about the rights and duties every citizen had; “un code de lois religieuses” which taught people about their moral duties towards others more broadly understood; and “un code de coutumes et d’usages édictés par l’opinion” which supplemented the other two codes.  ↩

  14. Mancur Olson, Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships (New York: Basic Books, 2000).  ↩

  15. Jean de Bloch (1836–1902) was a Polish born banker and railway financier who lived and worked in Russia. The quick Prussian defeat of France in 1870 led him to pursue a scientific study of what a modern war might look like in the near future. His 6 volume work published initially ion Russian and German in 1899 is remarkably prescient in many of his predictions of what actually transpired in WW1 . A 1 vol. abridgement was published in English and a 4 vol. one in French. Since the Guillaumin firm published the French translation Molinari must have known about this work. See, La guerre :ì traduction de l’ouvrage russe “La guerre future aux points de vue technique, économique et politique”. 4 vols. Paris: Guillaumin,1898–1900).  ↩