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A Reappraisal of Turgot's Theory of Value, Exchange, and Price Determination
... The latter interpretation leads Turgot to the classical school and the former towards the neoclassical one. Finally, there are various essays of integrating both approaches: Yamakawa (1959) observes a change from an objective to a subjective theory; Groenewegen (1970) and Hervier (1997) try to make both ideas compatible by means of a value-labour theory or by a syncretistic theory. ...
... Turgot attempts to prove the existence of a unique exchange ratio for all parties in the exchange. Groenewegen (1970) and Erreygers (1990) have clearly proved him wrong. However, Hervier (1997) points out that the task was not yet finished. ...
... Turgot considered that the measure of value improved as the exchanges progressed. Groenewegen (1970) adds two other cases to the latter exchange situations in order to complete Turgot's theory 10 . Consequently, there would be six different exchange situations: three isolated exchanges (the "valueless surplus", two individuals and two commodities and four individuals with two different commodities), two multiple exchanges (several individuals with two different commodities and several individuals with several commodities) and an inter-temporary exchange (present against future goods). ...
The purpose of this paper is to re-examine the notion of price determination in A.-R.-J. Turgot’s writings. Consideration is given to the evolution of the concept of market during the 18th century. It is argued that Turgot provided a model of multiple exchanges with merchants, called General market, in order to tackle economic problems, as is the market integration, price stability and the hoarding of capital. Further, we demonstrate how a uniform price, which is kept constantly, required that Turgot made use of theoretical tools from other disciplines.
... The secondary literature is abundant. For the above-quoted and other aspects of his work and some divergent interpretations, see, for example, Groenewegen (1970Groenewegen ( , 1971Groenewegen ( , 1983, Brewer (1987), Faccarello (1991Faccarello ( , 1992, Ravix and Romani (1997). In this entry, the focus will be on competition, value and the rate of interest. ...
... The secondary literature is abundant. For the above-quoted and other aspects of his work and some divergent interpretations, see, for example, Groenewegen (1970Groenewegen ( , 1971Groenewegen ( , 1983, Brewer (1987), Faccarello (1991Faccarello ( , 1992, Ravix and Romani (1997). In this entry, the focus will be on competition, value and the rate of interest. ...
... 34 For an interpretation of Turgot as a classical economist, see Cartelier (1976), Brewer (1987) and Ravix and Romani (1997). Groenewegen (1970Groenewegen ( , 1982 was in favour of a different interpretation, but his opinion changed over time. Both attitudes probably result from a too retrospective view. ...
This chapter deals with a current of thought, which deeply influenced the developments of political economy. Based on sensationist philosophy – sensations are the source of all knowledge and a guide for the behaviour of the agents who seek pleasures and avoid pains – sensationist political economy presented two main aspects, both in a free trade context. The first was developed by A.-R.-J. Turgot and his followers – M.-J.-A.-N. Caritat de Condorcet in particular – and the second by J.-J.-L. Graslin. Both lines of thought presented similar ideas in public economics, based on a quid pro quo approach and dealing for example with the free rider problem. But their developments are different as regards other topics. Graslin, drawing on J.-J. Rousseau’s Contrat social, developed an approach in terms of vertically integrated sectors and natural prices based on quantities of labour spent in the production of commodities. Turgot developed instead a subjective theory of value, equilibrium prices and the interest rate, as well as a theory of capitalist competition leading to an equilibrium defined by the uniformity of the profits rates in all branches. Condorcet, developing his ideas in public economics (see also Chapter 8), determined the optimal amount of public expenditure and taxes through an equilibrium at the margin. Even focusing on utility, none of these authors were utilitarians.
... Dans cet article j'examinerai uniquement la théorie de la valeur que Turgot a formulée dans Valeurs et monnaies. Je ne dirai rien sur la compatibilité de cette théorie avec ce que Turgot a écrit ailleurs ; pour une telle comparaison je renvoie à un excellent article de Groenewegen (1970). D'abord j'analyserai le texte de Valeurs et monnaies (section 2) ; ensuite j'essaierai de voir dans quel sens les propositions de Turgot et celles des néo-classiques se ressemblent (section 3). ...
Dans l'article court et inachevé « Valeurs et monnaies » (1769 ?) Turgot esquissait une théorie de la valeur basée sur des fondements subjectifs. En premier lieu je soumets les propositions de Turgot à un examen critique. Ainsi je démontre que l'une des idées fondamentales de Turgot, à savoir que le gain de l'échange doit être le même pour le vendeur et pour l'acheteur, est intenable. Plus généralement, la piste suivie par Turgot ne s'avère guère prometteuse. En deuxième lieu j'essaie de voir dans quelle mesure les propositions de Turgot peuvent être considérées comme une anticipation de la théorie néoclassique de la valeur. Je montre qu'il est possible de reformuler la théorie de Turgot en termes néoclassiques. Ce qui sépare Turgot de la tradition néoclassique, toutefois, est l'absence du principe de maximisation de l'utilité.
... There is a great body of historical and theoretical writing on Turgot. For theoretical aspects not dealt with in this chapter, the reader may refer to the texts listed in the bibliography(Faccarello, 1990(Faccarello, , 1992b(Faccarello, , 1996Groenewegen, 1969Groenewegen, , 1970Groenewegen, , 1971Groenewegen, , 1983 3 The Contrôleur général des finances was the French minister of finance. ...
... 10. Cf. M. Herland [1982], p. 429 et 436, ainsi que P.D. Groenewegen [1970], p. 177-196. 11. ...
... In his unfinished text Valeur et Monnaies (1769), Turgot describes his theory of value and exchange. From this analysis, Turgot derived three basic conclusions: firstly, the value of a commodity can be expressed only by the current price; secondly, the current price will be equal for all parties in the exchange; and thirdly, the exchange ratio will be a midway price obtained by averaging the individual appreciative value -i.e. the gains derived from the subjective comparison of the quantities of commodities (Groenewegen, 1970). The price formation theory is to be connected to the economics of capabilities by means of an intertemporal and interspatial exchange model, called "General market". ...
This paper deals with the French economic thought throughout the eighteenth and nineteenth centuries. A series of distinctive concepts were developed to come to a clear understanding of the economic problems which the French authors were interested in. J.A. Schumpeter called these economists 'the French tradition'. The arguments presented in this paper aim at illustrating the process of construction of this framework of theoretical concepts which can be regarded as an unsuccessful alternative to the British classical economics. However, this fruitful view of the economy has left a legacy of important contributions to economic theory..
This article examines Turgot’s capital theory. It calls attention for his methodological procedure in deriving first the very concept of capital out of the analysis of circulation, for then to inquire on its possible employments, among them that of acting as advances in production. In doing so, Turgot changes into a logical result what was a mere supposition of the physiocratic analysis, namely, the existence of a class of entrepreneurs as the owners of required amount of resources for carrying on production.
KEYWORDS:
History of economic thought; physiocracy; capital theory; Turgot
The theory of the firm's production and selling decisions is traced from the eighteenth century until the death of Marshall. Some tentative judgments are proposed as to the goodness and badness of the principal strands in this development. Apart from the first chapter (devoted to method) and the final chapter (devoted to post-Marshallian developments and empirical evidence), the thesis consists of three studies based on Adam Smith, J.S.MiU, and Alfred Marshall respectively. Each of these writers is considered in relation to preceding and contemporaneous work. Adam Smith outlines a model in which the long-run equilibrium of resource allocation between industries requires that the rate of return on capital be equal among industries (making allowance for differences in agreeableness and risk). Monopoly is defined as an impediment to the resource flow which would otherwise bring the equilibrium about. Following The Wealth of Nations, writers increase the empirical content of this model by elaborations with respect to observed phenomena (J .S.Mill) end with respect to the time path by which equilibrium is approached (Marshall). An alternative approach to the theory of price is to classify markets according to certain structural characteristics and to derive equilibrium and stability conditions for each market structure. The multiplication of these models since the time of Cournot has robbed them, of empirical content. Further, the structural assumptions of the models seem to limit the outcomes of modelled behaviour to actions which do not: alter that structure.
This paper examines A.R.J. Turgot’s explanation of the scope and method of economic science. We begin by highlighting two contradictory economic methodologies in Turgot’s writings according to the literature: one in his text on progress and another in his papers on concrete economic matters. An initial hypothesis in this paper holds that this ‘contradiction’ does not exist. To do so, we shall use his texts on scientific methodology, history of science and epistemology, mainly written during the decade of the fifties. The argument is that his taxonomy of sciences explains that the different methodologies observed by the literature, depending on the discipline, are the forms that the unit of science can take in each stage of the progress of the human spirit. A corollary to this hypothesis is that Turgot’s multi-disciplinary works describe a scene of the birth of economic science that is very removed from the political arena. Both debates on types of knowledge, the independence of disciplines, the specialized language and the association of authors are better explained from the sociology of science than from the history of political thought.
The field of eighteenth century economic thought is far more fertile than commonly believed. Even before Adam Smith’s monumental contribution in the last quarter of the century, peak performances in economic analysis had emerged in France (Boisguilbert, Vauban, Cantillon, Quesnay, Turgot), Italy (Galiani, Verri, Beccaria), Germany (Justi, Sonnenfels), and Spain (Campomanes, Jovellanos). A complete investigation of these and other contributions would convince even the most reluctant skeptic that economics was anything but a product of exclusively British manufacture.
Valeurs et monnaies is Turgot's most enigmatic contribution to economic theory. A comparison is made between the published transcripts of this text and manuscript fragments preserved in Lyon. Two main conclusions are drawn. First, no completely reliable transcript of the text has been published. Second, differences between the Lyon fragments and the published transcripts suggest that the former were part of an earlier draft than the better known Lantheuil manuscript. Some reflections are added about the fact that the latter manuscript is incomplete and has been inaccessible for many years.
Conclusion My purpose in this article has been to demonstrate that the contributions of the French liberal school to economic theory were recognized and utilized by some economists who are generally considered to have played prominent roles in the initial development of modern marginalist economic theory or who have anticipated and influenced such development. If this much is accepted, then the attempt of Schumpeter and other scholars to explain the Anglo-American neglect of the liberal school in terms of the latter's analytical sterility or indifference immediately founders. While an alternative explanation has not been provided, considerable progress has been made by radically shifting the focus of research from alleged analytical shortcomings of the liberal school to the identification of the institutional factors that have impeded recognition by (most) English-speaking economists of the substantive theoretical content of liberal economics.
This paper analyses one of Turgot’s first economic essays, Plan d´un ouvrage sur le commerce, la circulation et l´intérêt de l´argent, la richesse des états (1753-4). Written prior to the appearance of physiocratic influence, it is Turgot’s contribution to the movement of writing that bubbled up around the general issue of the market as mechanism of allocation generated by Vicent de Gournay. The wide conceptual apparatus – cognitive models and a series of interdisciplinary analytical tools –, employed by Turgot in the analysis of social problems, is integrated into this particular context. Given this widespread interpretation, the conclusion is reached that Turgot created a theory of just exchange on the basis of a contractualist approach. The behavioural hypothesis introduced by Turgot into exchange provides an alternative response to the dilemma posed by the rule of equal gain for the uniqueness of price and to which the literature has responded with the assumption of symmetric or transparent agents.
The manuscripts of Andre Morellet (kept in the Municipal Library of Lyons) contain numerous notebooks in which Adam Smith's Wealth of Nations is discussed. They are an interesting but little used source for the study of the early reception of Smith's work in France. The frequent comparisons Morellet makes between Smith's views and those of contemporary French economists provide new insights into the, often subtle similarities and differences between the leading economic theorists of the second half of the eighteenth century.
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