Historical Reflections on Molinari’s Legacy

 

Unfortunately, 101 years after his death at the ripe old age of 93, we still lack a good intellectual and political biography of Gustave de Molinari. Gérard Minart has made a good start with his French-language biography published in 2012 to coincide with the centennial of Molinari’s death,[1] but there are still enormous gaps in our knowledge of his very long life and his many and varied activities in the cause of individual liberty. This response to Roderick Long is designed to add a few paragraphs to what Roderick has usefully provided for us.Let me begin by summarizing a few aspects of his life and thought which are probably not well known and to discuss one or two of them in a bit more depth in order to begin assessing Molinari’s legacy:

1849 -- The Annus Mirabilis of Anarcho-Capitalism

In 1849, Molinari’s annus mirabilis, Molinari published his revolutionary insights into how “the production of security” could be undertaken by private and competing insurance companies. He did this in an article on "The Production of Security" in the Journal des Économistes in February and in chapter 11 of his Soirées.[2] He lacked the theoretical insights and sophistication to take these ideas very far but he was the first to have them, which is certainly worthy of some kind of intellectual prize. His revolutionary insight lay in two things: that security could be viewed as being like any other service or “industry” provided in the free market, and that the institutions which the market was already evolving could supply this new “industry” as profit-seeking entrepreneurs sought to satisfy the needs of consumers using scarce resources. 

The actual details of how this would happen he left unexplored perhaps in his haste to get his thoughts on paper while the intellectual tornado of the revolution was still swirling about with its mix of socialist, conservative, Bonapartist, as well as liberal ideas. Perhaps he also thought that the specific way in which the market would supply these goods and services was not the job of the economist to answer, only that it could and would, since the “economic problem” was a universal one. For example, in a socialist society in which all groceries were supplied by government-run depots, one might well ask a free-market advocate of private provision of groceries how a free market would do this exactly? What grocery suppliers would emerge? On what streets would they be located? What would they charge for staples like bread (and wine). What would happen if the farmers refused to supply Paris with the food it needed? Wouldn’t rival grocery stores do battle on the streets to secure prime locations for their stores? Wouldn’t they offer low prices at first to win market share only later to jack up prices for the unfortunate customers? Perhaps, somewhat naively, Molinari thought that just as it would be foolish and impossible for an economist to give detailed answers to these questions to the defender of a government monopoly provision of groceries, so too would it be foolish to try to do the same for security services. 

It should also be kept in mind that the chapter 11 in which these ideas were presented in Les Soirées was just one of several in which Molinari presented private alternatives to “public goods” such as water supply and roads. Thus he thought that security was part of a spectrum of similar industries to which competitive market solutions might be applied.

Molinari extended his analysis of the private and competitive provision of security services in his treatise on economics, the Cours d'économie politique, which came out of the lectures he gave at the Musée royal de l'industrie belge in Brussels in 1855 and which he revised and expanded in a second edition that appeared in 1863.[3] This was to be the last occasion Molinari dealt with these issues for some time because he left academia to pursue a career in journalism. Did Molinari sell out the anarcho-capitalist cause towards the end of his life? 

I think one could argue that Molinari did indeed retreat from the radical defense of anarcho-capitalism he had developed between 1845 and 1865 when he was relatively young (26-46 years old). This is not surprising for a couple of reasons. Firstly, he was abandoned by his free-market colleagues who thought, along the lines argued by Charles Dunoyer in a meeting of the Political Economy Society in Paris in 1849, that Molinari had been “swept away by illusions of logic”; none of them were prepared to follow him down this route.[4] Secondly, in 1867 Molinari made a career change that took him out of academia and into full-time journalism where he had less time to devote to such theoretical matters as anarcho-capitalism. In fact, you might say he became quite distracted with the directions his new career took him in. And thirdly, from the mid-1880s, with the return of protectionism and the rise of socialist groups across Europe, he became increasingly pessimistic about the prospects for liberty - and justifiably so I would add. As a consequence he no longer believed that people were ready for such a radical transition to a freer society as anarcho-capitalism would require. When all three factors are considered it is not surprising perhaps that his radicalism weakened as the years went by. 

I also think his transition from academia to journalism merits further study if we wish to understand how and why Molinari changed gears in his thinking about society. In October 1867 Molinari decided to make a career change, which took him out of academia and out of Brussels and back into journalism in Paris (one should also note that his wife died in 1868 which also deeply affected him personally). This meant that Molinari was no longer willing or able to work as an academic economist grappling with theoretical issues such as public goods. He dramatically shifted his attention to travel writing and political commentary about the new Third Republic. His new position was with the influential Journal des Débats, published by Edouard Bertin and after 1871 by Léon Say (the grandson of Jean-Baptiste Say), who served three times as minister of finance during the Third Republic. Molinari served as editor-in-chief from 1871 to 1876. His interest in foreign travel began with a lecture tour of the Russian Empire at the time of the abolition of serfdom (1861) and went on to include an impressive range of countries about which he wrote for the JDD, including the United States and Canada (1876), South Carolina (1878?), Ireland, Canada, Jersey (1881), the Rocky Mountains, Russia, Corsica (1886), Panama, Martinique, Haiti (1887). When not traveling he was occupied in writing political analysis about a very tumultuous time in French history, such as the defeat of France in the Franco-Prussian War, the collapse of Napoleon III’s Second Empire, the rise of socialism during the Paris Commune, and the formation of the Third Republic. When he did return to more economic concerns it was as editor of the Journal des Économistes to which he was appointed in 1881 on the death of Joseph Garnier who had been editor from 1866-81. The books which flowed from his pen during the early and mid-1880s were what I would call historical sociology rather than economic theory, a subject which he had not touched for nearly 15 years.

We can say definitely that by the time Esquisse de l'organisation politique et économique de la société future [English version] was published in 1899,[5] Molinari had definitely “retreated” to a non-anarcho-capitalist position, accepting that there were “natural monopolies” which only governments could supply and that protection services were such a natural monopoly. Exactly when this transition occurred between 1865 and 1899 needs to be determined by further study, but an analysis of some key phrases that he used can be instructive in pinning this down more precisely. One such phrase is “la liberté de gouvernement,” which he used in the sense of competitive “governments” (or suppliers of protective services), a parallel concept to that of “la liberté du commerce” (free trade). When he believed that competing privately owned insurance companies could supply security services, then “la liberté de gouvernement” had an anarcho-capitalist meaning in the Rothbardian sense. 

As late as 1887 in Les Lois naturelles de l'économie politique[6] Molinari is still defending this idea of “la liberté de government,” but he now draws an important distinction between “la liberté du commerce” (free trade), which had a vigorous organization lobbying for its introduction, especially in England with Richard Cobden’s Anti-Corn Law League, and which could therefore prepare the English people for the idea of free trade, and “la liberté de gouvernement” (free government), which had no organization to prepare the people to accept it. That being the case, the idea would require “tutelage” as an intermediate measure before it could be fully implemented. By 1899 Molinari believed this intermediate measure had to be made permanent, thus fully abandoning an anarcho-capitalist meaning of “la liberté de gouvernement.” And so he stopped using this phrase entirely. 

But this was a strange kind of “sell out,” as he continued to quote passages from “The Production of Security,” such as the quote from Adam Smith on courts charging fees for their services. Whereas then he believed in fully competitive protection companies without any geographic monopoly, now he thought security is a “naturally collective” good that should be provided by the government with a geographic monopoly, but with a number of radical twists. He believed that these monopolies should be very small, such as municipalities or proprietary communities, and that they should outsource the provision of security to private firms in order to have some kind of market in security and thus keep costs down. If this is a sell-out then it is a strange kind of sell-out since it is still much more radically anti-state and pro-free market than anything his colleagues were advocating at that time.

Interestingly, his contemporary Herbert Spencer was having similar reservations as the prospects for liberty receded in the late 19th century. In 1851 when Social Statics appeared with the chapter “The Right to Ignore the State,” Spencer believed that Britain was in a “transition state,” where the preconditions for people to live in a fully free and deregulated society were on the verge of being established.[7] If they wished to do so, they had or would soon have the moral framework to live as free and responsible individuals and could “ignore the state” without violating the rights of others. When he republished Social Statics in 1892, he no longer believed this to be the case. Instead he thought the people had become corrupted by the growth of government, militarism, and socialism, and so he withdrew the chapter on “The Right to Ignore the State.” The similarities with Molinari on this matter are striking.

[1] Gérard Minart, Gustave de Molinari (1819-1912) (Institut Charles Coquelin, 2012).

[2] Gustave de Molinari, "De la production de la sécurité,” Journal des Économistes, 15 February 1849, pp. 277-90 PDF version <https://library.mises.org/books/Gustave%20de%20Molinari/The%20Production%20of%20Security.pdf> and HTML version <davidmhart.com/liberty/FrenchClassicalLiberals/Molinari/Articles/ProductionSecurity1.html>; and Les Soirées de la rue Saint-Lazare; entretiens sur les lois économiques et défense de la propriété. (Guillaumin, 1849).  Onzième Soirée, pp. 303-37. Draft translation <Molinari revised chapters 1 3 6 11>.

[3] Gustave de Molinari, Cours d'économie politique, professé au Musée royal de l'industrie belge, 2 vols. (Bruxelles: Librairie polytechnique d'Aug. Decq, 1855). 2nd revised and enlarged edition (Bruxelles et Leipzig: A Lacroix, Verbroeckoven; Paris: Guillaumin, 1863). Tome I: La production et la distribution des richesses. Tome II: La circulation et la consommations des richesses. 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.

[4] The discussion of Les Soirées by the Société d'économie politique took place in October 1849. Present at the discussion were Horace Say (chairman), Gustave de Molinari, Charles Coquelin, Frédéric Bastiat, M. de Parieu, Louis Wolowski, Charles Dunoyer, M. Sainte-Beuve (MP for L'Oise), M. Lopès-Dubec (MP for La Gironde), M. Rodet, and M. Raudot (MP for Saône-et-Loire). See Journal des Economistes, Vol. XXIV, no. 103, 15 October, 1849, pp. 314-16. In the same month Charles Coquelin wrote a hostile review of Les Soirées which appeared in JDE, Vol. XXIV, no. 103, 15 October, 1849, pp. 364-372.

[5] Translated into English in 1904: G. de Molinari, The Society of to-Morrow A Forecast of Its Political and Economic Organisation, trans. P. H. Lee-Warner (New York: G.P. Putnam's Sons, 1904).

[6] Les Lois naturelles de l'économie politique (Paris: Guillaumin, 1887). A more detailed analysis of Molinari's gradual retreat from his early anarcho-capitalist position can be found in the discussion which accompanies this virtual anthology of Molinari's writings on the state between 1846 and 1912 <http://davidmhart.com/liberty/FrenchClassicalLiberals/Molinari/anarcho-capitalism.html>.

[7] Herbert Spencer, Social Statics: or, The Conditions essential to Happiness specified, and the First of them Developed, (London: John Chapman, 1851). Chapter: XIX. The Right to ignore the State. </title/273/6325>.