Tuesday, September 30, 2014


AM | @HDI1780

"... percect security to the inhabitants ..." — Adam Smith

Most people think of Adam Smith as "the archetypal free-marketeer". As The Economist recently pointed out, this is one of the most persistent clichés in the history of economic thought. In fact, Smith is more concerned about the need for personal security than about the preeminence of free markets per se. In his world, the key to prosperity is "to make every individual feel himself perfectly secure in the possession of every right that belongs to him" (WN, v.1). This is why the words secure and security pop up so many times in the Wealth of Nations—a trait that was shared with Histoire des deux Indes [see].

* * *

In the "Digression on the corn trade" (WN, iv.5), Smith praises "That security which the laws in Great Britain give to every man that he shall enjoy the fruits of his own labour [...] and this security was perfected by the [1688] revolution [...] with freedom and security [...] In Britain industry is perfectly secure". Other countries only compound their problems when their bad economic policies are not "counter-balanced by the general liberty and security of the people [...] Industry is there neither free nor secure".

In his comparison of land property regimes across Europe, Smith again praises "the security of the farmer" and "the security of the tenant", which is second to none in England (Scotland is not mentioned). In other parts of Europe, "the term of their security" is limited and "the farmer is less secure" (WN, iii.2). His conclusion leaves no doubt about the primacy of security concerns over the advantages of free markets: "Those laws and customs so favourable to the yeomanry, have perhaps contributed more to the present grandeur of England, than all their boasted regulations of commerce taken together". Thus industry and security go hand in hand: "... when they are secure of enjoying the fruits of their industry, [individuals] naturally exert it to better their condition" (WN, iii.3).

According to Smith, the better condition of North American colonists, compared to those of French, Spanish and Portuguese colonies, is the natural result of "the perfect security" that the English government gave to "the inhabitants of so very distant a province" (WN, iv.7). But what are the factors that determine that perfect security? Smith deals with this issue towards the end of Wealth of Nations. His answer is disarmingly simple: judicial independence is the key to good government and security. Here's what I deem the most important passage of the entire book:

When the judicial is united to the executive power, it is scarce possible that justice should not frequently be sacrified to, what is vulgarly called, politics. The persons entrusted with the great interests of the state may, even without any corrupt views, sometimes imagine it necessary to sacrifice to those interests the rights of a private man. But upon the impartial administration of justice depends the liberty of every individual, the sense which he has of his own security. In order to make every individual feel himself perfectly secure in the possession of every right which belongs to him, it is not only necessary that the judicial should be separated from the executive power, but that it should be rendered as much as possible independent from that power (v.1).

Unsurprisingly, an independent judiciary leads to an increasing supply of credit. In Britain, government bonds are highly valued: "The security which [the government] grants to to the original creditor, is made transferable to any other creditor, and from the universal confidence in the justice of the state, generally sells in the market for more than was originally paid for" (WN, v.3) [1]. Thus, "more regular returns might be expected" in countries with sound judiciaries (WN, i.9). Smith is anticipating a now widely accepted view in finance: secure cash-flows command lower discount rates.

Brilliant stuff indeed.

[1] This idea comes straight from the first edition of Histoire des deux Indes, a book that Smith bought in London in 1773: "Les citoyens accoutumés à regarder la nation comme un corps permanent & indépendant, l'acceptent [le papier-monnaie] d'autant plus volontiers pour caution, qu'ils ont rarement une connoissance exacte de ses facultés, & qu'ils ont de sa justice une idée favorable, fondée ordinairement sur l'expérience. Avec ce préjugé, le crédit y est souvent porté au-delà des ressources & des sûretés. L'Angleterre en est la preuve, Il n'en est pas ainsi dans les monarchies absolues, dans celles surtout qui ont souvent violé leurs engagements" (HDI 1773, iv, p. 76) [see].

Sunday, September 21, 2014


AM | @HDI1780

"Le grand moment de l'idée" — Marcel Gauchet

I am an avowed fan of political checks and balances and the related notions of mixed government, balanced government and the separation of powers. In 1787, just as the political temperature was rising to dangerous levels in North America, the Netherlands and France, John Adams famously described the English constitution as...

...the most stupendious fabric of human invention. And that the Americans ought to be applauded instead of censured, for imitating it as far as they have done. Not the formation of languages, not the whole art of navigation and ship-building does more honour to the human understanding than this system of government [1].

In La Révolution des pouvoirs, Marcel Gauchet devotes an entire chapter to the stunning comeback of the idea of political équilibre after Thermidor [2]. But students of the period are handicapped by the lack of digitized material. For example, Google Books does not have a digitized version of the book published in the spring of 1795 by Pierre-Bernard Lamare (or La Mare) under the imposing title L'Équipondérateur, ou une seule manière d'organiser un gouvernement libre (Paris: An III). I can't find it in Gallica either. Until we get that version, many of us will have to rely on Mr. Gauchet's extremely useful remarks and quotes.

* * *

There is some debate about the role of Lamare as the translator of Adams's Defence, published by Buisson in 1792 in two volumes as Défense des constitutions américaines ou De la nécessité d'une balance dans les pouvoirs d'un gouvernement libre (1, 2). According to Dictionnaire historique, critique et bibliographique (1810), L'Équipondérateur "fut envoyé dans tous les départements par ordre du gouvernement" [see]. The book contains a sharp critique of the French constitutions of 1791 and 1793:

Aucun de ces plans ne représente une sage combinaison des principaux pouvoirs de gouvernement ; je n'y vois aucune de ces balances, limitations ou oppositions connues et admirées dans d'autres constitutions et dont l'effet est de préserver une nation de toutes dispositions arbitraires de la part de ceux qui la gouvernent, de toute violation de ses droits tant individuels que politiques et de lui assurer, quoi qu'il puisse arriver, qu'il ne sera fait pour elle que des lois justes et que ces lois seront exécutées impartialement. En un mot, aucune de ces constitutions n'est équilibrée, et voilà pourquoi je les blâme toutes.

In his discussion of the relevance or irrelevance of mixed government in the age of revolutions, Mr. Gauchet quotes Gordon Wood's critique of John Adams. That critique was effectively answered by C. Bradley Thompson in his book John Adams & the Spirit of Liberty (University Press of Kansas, 1998). But here's the point I want to make about L'Équipondérateur. Lamare understood the importance of a single executive (l'unité du magistrat); but because public opinion was so strongly opposed to this idea, he settled for an executive made up of two consuls, "titre éclatant, imposant et républicain."

Even writers who were courageous enough to defend the notion of political balance, like Pierre-Bernard Lamare, bumped against the wall of a strong and unified executive power. That would prove to be the fatal weakness of the Constitution of 1795. Two conclusions come to mind. On the one hand, we need to know more about Lamare and his fellow supporters of équilibre, a group that has been excluded from the canons of historical scholarship. On the other hand, we would do well to reconsider the meaning of Raynal's intervention at Assemblée Nationale in May 1791; far from representing a despicable surrender of the principles defended by philosophes (the consensus view), it was a noble and courageous affirmation of ... good government.

[1] John Adams. A Defence of the Constitutions of the United States, Vol. 1, letter xx: "England".

[2] Marcel Gauchet. La Révolution des pouvoirs. La souveraineté, le peuple et la représentation 1789-1799. Paris: Gallimard, 1995.

Monday, September 15, 2014


AM | @HDI1780

"Il eut de bonne heure le goût de la lecture" — Saint-Lambert

J'ai déjà eu l'occasion de montrer l'influence de Claude-Adrien Helvétius sur la composition de l'Histoire des deux Indes (1, 2, 3, 4) et sur les écrits de Mariano Moreno au Río de la Plata. Je suis persuadé que Moreno lit l'édition publiée chez Servière à Paris en 1795, édition "Corrigée & augmentée sur les Manuscrits de l'Auteur, avec sa Vie & son Portrait". À chaque recherche sur la Gazeta de Buenos-Ayres, GoogleBooks me renvoie à cette édition-là. (J'en possède moi-même un exemplaire, acheté, soit-dit en passant, à Buenos Aires). 

* * *

La date est importante: depuis la fin de l'année 1792 jusqu'à la mort de Robespierre, Helvétius est considéré persona non grata à Paris. Le 5 décembre 1792, au Club des Jacobins, "les bustes de Mirabeau et d'Helvétius [sont] jetés bas de leurs socles et brisés". Le premier volume contient les 114 pages d'un "Essai sur la vie et les ouvrages d'Helvétius" rédigé par Saint-Lambert, même si celui-ci n'est pas nommé. Saint-Lambert, d'ailleurs, ne fait mention que des trois principaux écrits d'Helvétius: De l'esprit, De l'homme et le Poème du Bonheur.

À remarquer l'intense concurrence entre les éditeurs: Didot publie, en même temps, les Œuvres complètes d'Helvétius en 6 tomes, avec le même "Essai" de Saint-Lambert en guise d'introduction générale. Décidemment, on peut respirer plus librement en 1795! Voici les cinq volumes de l'édition de Servière:

  • Œuvres complettes d’Helvétius, Tome 1. Paris: Servière, 1795 [voir]. Contient un "Essai sur la vie et les ouvrages d'Helvétius" et les Discours I et II de De l'esprit


  • Œuvres complettes d’Helvétius, Tome 2. Paris: Servière, 1795 [voir]. Contient les Discours III et IV de De l'esprit.


  • Œuvres complettes d’Helvétius, Tome 3. Paris: Servière, 1795 [voir]. Contient les Sections I à V de De l'homme.


  • Œuvres complettes d’Helvétius, Tome 4. Paris: Servière, 1795 [voir]. Contient les Sections VI à X de De l'homme, ainsi que la "Récapitulation" et la "Conclusion générale" de l'ouvrage.


  • Œuvres complettes d’Helvétius, Tome 5. Paris: Servière, 1795 [voir]. Contient "Le Bonheur, poëme allégorique", ainsi que des lettres à Voltaire et Montesquieu. Autres textes: "Examen de critiques du livre intitulé De l'esprit", "Les progrès de la raison dans la recherche du vrai".


Saturday, September 13, 2014


AM | @HDI1780

"...both more and less radical..." — Eric Nelson

I vividly remember a conversation, in a Parisian café in the autumn of 2009, about the reception of Tom Paine's Common Sense in Río de la Plata circa 1810. "I am convinced", I told Gabriel Entín, now at Colegio de México, "that Mariano Moreno introduced Paine to porteño readers". But now I can prove it! Moreno translated word by word a large chunk of the French version of Common Sense published by Guillaume-Thomas Raynal in Histoire des deux Indes, xviii.44 (1780). Before I present that translation of a translation, I would like to mention a recent study about Paine, according to which the English-American political activist introduced "a seventeenth-century Hebraizing tradition of republican political theory, one grounded in the conviction that it is idolatrous to assign any human being the title and dignity of a king" (*).

This is interesting, because Moreno was himself a doctor in canon law, a fact that sheds some light into his translation of "Apostrophe aux Hottentots" (HDI 1780, ii.18), a text that relies heavily on Diderot's reading of 1 Samuel 8 [see]. In my reconstruction of Moreno's Cuaderno de Lecturas, I have found proof that the leader of the Río de la Plata revolution also knew Condorcet's « Réponse de Th. Paine à quatre questions, sur les pouvoirs législatif et exécutif, traduit sur le manuscrit » (La Chronique du mois ou les Cahiers patriotiques, July 1792, pp. 15-16) and Paine's Remarques sur les erreurs de l’histoire philosophique de Mr Guillaume Thomas Raynal, par rapport aux affaires de l’Amérique septentrionale, &c.

                                                                  * * *

Finally, let us remember that David Curtis DeForest, the Connecticut merchant who was expelled from Buenos Aires just before de May 1810 revolution, warmly praised Moreno's Representación de los hacendados (1809) as "the Common Sense" of Río de la Plata.

Here's the translation and the text from HDI:

- Mariano Moreno: “Carta escrita de Potosí á el Presidente de la Junta” (Aristogiton), Gazeta de Buenos-Ayres No. 14, 6 September 1810, p. 220 (358) (see).

Pocas naciones han tomado la oportunidad favorable de formar un gobierno. Si esta se escapa no vuelve jamas, y el castigo es durante muchos siglos, la anarquia, ó la esclavitud. Amparaos del caso único que se os presenta. Está en vuestro poder el hacer la mas bella constitucion que haya en el mundo. Vais á decidir en este momento, no de la suerte de una ciudad, ó de una Provincia, sino de un continente inmenso. Lo presente resolverá el problema de lo futuro, y transcursando muchos centenares de años el sol que alumbra el universo alumbrará vuestra gloria, ó vuestro oprobio. ¿O esperareris que en medio de estas convulsiones seamos la presa de un conquistador, y que la esperanza de la mayor parte del globo se destruya? Imaginaos por un momento que todas las generaciones venideras tienen en este momento puestos los ojos, y que os piden su salud. En este crítico período vais á fixar su destino. Si las engañais, algun dia ellas se pasearán con sus cadenas sobre vuestros sepulcros, y os cargarán de imprecaciones.

- Guillaume-Thomas Raynal. Histoire philosophique et politique des Établissemens et du Commerce des Européens dans les deux Indes, xviii.44. Genève: Pellet, 1780, p. 265 (see).

Peu de nations ont saisi le moment favorable pour se faire un gouvernement : une fois échappé, ce moment ne revient plus; & l’on en est puni pendant des siècles par l’anarchie ou l’esclavage. Emparons-nous d’un moment unique pour nous. Il est en notre pouvoir de former la plus belle constitution qu’il y ait jamais eue parmi les hommes. Nous allons, dans ce moment, décider du sort d’une race d’hommes plus nombreuse peut-être que tous les peuples de l’Europe ensemble. [Le présent va décider d’un long avenir; & plusieurs centaines d’années après que nous ne serons plus, le soleil, en éclairant cet hémisphère, éclairera ou notre honte ou notre gloire.] Attendrons-nous que nous soyons la proie d’un conquérant, & que l’espérance de l’univers soit détruite? Imaginons-nous que toutes les générations du monde à venir ont dans ce moment les yeux fixés sur nous, & nous demandent la liberté. Nous allons fixer leur destin. Si nous les trahissons, un jour elles se promeneront avec leurs fers sur nos tombeaux & les chargeront peut-être d’imprécations.

(*) Eric Nelson: "Hebraism and the Republican Turn of 1776: A Contemporary Account of the Debate over Common Sense", William & Mary Quarterly, 3d ser., 70, no. 4 October 2013.

Thursday, September 11, 2014


AM | @HDI1780

"...a dark page in our records" — Winston S. Churchill

Three hundred years ago today, the city of Barcelona surrendered to the Spanish forces under the command of the Duke of Berwick. Following the Treaty of Utrecht and its clause forbidding the union of the crowns of France and Spain (1713), Catalonia had lost any strategic relevance in the eyes of the Anglo-Dutch. Peace negotiations between France and England had started, albeit secretely, in 1711. Queen Anne was keen to insist that any agreement should preserve to the Catalans "the full Enjoyment of their just and ancient Liberties". But King Philip V of Spain sternly opposed any concessions on that front. Finally, Secretary of State Bolingbroke, eager for peace at any cost, surrendered to the pretensions of the Bourbons:

Bolingbroke accepted the formula suggested to him by the plenipotentiary Marquess of Monteleón, which is contained in Article XIII of the Peace and Friendship Treaty between Spain and Great Britain (27 March 1713). The text states, cynically, that the Catalans were granted “all the privileges which the inhabitants of both Castiles [...] have and enjoy,” which was tantamount to saying that it suppressed the freedom of Catalonia. The Count of La Corzana, representing the emperor Charles VI, denounced the abandonment of the Catalans in exchange for the “Opium from Peru and Potosí that has currently put the English ministry to sleep”.

It was of little use that the Catalan ambassador Pau Ignaci de Dalmases, accompanied by the Earl of Peterboroug, was received by Queen Anne on June 1713, and sought her support, reminding her that the Catalans had become involved in the war at the request of the British and that “because this country is so free and loves freedom it should protect another country that in view of its prerogatives could be called free [because] the laws, privileges and freedoms are in all things similar and almost equal to those enjoyed in England” [1].

* * *

In his monumental biography of the Duke of Marlborough, Winston S. Churchill praises "Bolingbroke's statecraft" and his determination to put an end to the war. A few paragraphs later, however, he describes the apalling scenes that followed the capitulation of Barcelona, and the enduring shame that fell upon the British:

...the Catalans, who had been called into the field by the Allies, and particularly by England, and who had adhered with admirable tenacity to Charles III, were delivered over under polite diplomatic phrases to the vengeance of the victorious party in Spain [...] The fate of the Catalans, abandoned, slaughtered, and oppressed, made a dark page in our records, and even to-day plays its part in the internal affairs of Spain [2].

Among the many pamphlets published in England during these troubled years, Catalans are particularly fond of a 98 page-long anonymous text published in 1714 under the title The Deplorable HISTORY of the Catalans, from their first engaging in the WAR, to the Time of their REDUCTION. With the Motives, Declarations, and Engagements, on which they first took Arms. This is the account of September 11, 1714:

The Storm was undertaken the 11th of September, N. S., and was very Bloody and Obstinate. The Besieged disputed every Inch of Ground [...] The Negotiation was terminated the 12th in the Evening upon the following Conditions: That they should be assured of their Lives; that the City should not be plundered; that they should be left to the Discretion of the King of Spain, which they consented to with great Reluctance [...] How well they have kept the Faith of this Treaty, many of these miserable People have dearly experienced already; they were immediately stript and disarmed, forced to redeem themselves from Plunder by large Sums, the Laws of Castile publickly declared, and many of the Chielf of them distributed into several Goals (sic).

[1] Joaquin Albareda: "Catalonia background information", Public Diplomacy Council of Catalonia, October 2013.

[2]  Winston S. Churchill. Marlborough. His Life and Times, Book two [1936]. University of Chicago Press, 2002, pp. 992-996.

Tuesday, September 9, 2014


AM | @HDI1780

- David Bromwich. The Intellectual Life of Edmund Burke. From the Sublime and Beautiful to American Independence. Harvard University Press, 2014. [HUP]

This is the first volume of a new biography of Edmund Burke (1, 2). I saw it a Alibri (@LibreriaAlibri) in Barcelona. It looks interesting, not least because the author appears to focus more on the progressive than on the conservative side of Burke's thought. (Which reminds me of Rudolf Boon's sympathetic portrait Een progressieve conservatief. Edmund Burke als tijgenoot. Aspect, 2004). Says Bromwich: "I like to think of Burke as a conservationist of morals, rather than a conservative". From the editors:

This intellectual biography examines the first three decades of Burke’s professional life. His protest against the cruelties of English society and his criticism of all unchecked power laid the groundwork for his later attacks on abuses of government in India, Ireland, and France. Bromwich allows us to see the youthful skeptic, wary of a social contract based on “nature”; the theorist of love and fear in relation to “the sublime and beautiful”; the advocate of civil liberty, even in the face of civil disorder; the architect of economic reform; and the agitator for peace with America.

- Leo Damrosch. Jonathan Swift. His Life and His World. Yale University Press, 2013 [YUP]. Laura Collins-Hughes: "Jonathan Swift by Leo Damrosh", Boston Globe, January 18, 2014. [VIDEO].

In 1724, in the fourth letter of "M. B. Drapier" against plans to introduce a new currency managed from London, Jonathan Swift, Anglican dean of St. Patricks' Cathedral in Dublin, writes: "For, in reason, all government without the consent of the governed, is the very definition of slavery [...] The king is limited by law" (*). Leo Damrosch, Ernest Bernbaum Research Professor of Literature at Harvard University, is out with a new biography of Swift. From the editors:

In this deeply researched biography, Leo Damrosch draws on discoveries made over the past thirty years to tell the story of Swift’s life anew. Probing holes in the existing evidence, he takes seriously some daring speculations about Swift’s parentage, love life, and various personal relationships and shows how Swift’s public version of his life—the one accepted until recently—was deliberately misleading.

(*) The Works of Jonathan Swift, with Notes by Walter Scott, Vol. VII. Edimburgh, 1814.

- Vincent Azoulay. Les Tyrannicides d'Athènes. Vie et mort de deux statues. Seuil, 2014 [ver].

Es la historia de Harmodius y Aristogiton (Ἁρμόδιος/ Ἀριστογείτων), asesinos del tirano ateniense Hipparchus. Es una historia interesante, con política, celos y sexo (eran homosexuales). Pude comprobar, este año, que el "Antonio Aristhogiton" de la Gazeta de Buenos-Ayres de agosto de 1810 es en realidad Mariano Moreno [ver]. Según Azoulay, fue a partir del siglo XVIII, con la Histoire Universelle de Charles Rollin y con los Viajes del joven Anarcharsis de Jean-Jacques Barthélémy, que la historia de Harmodius y Aristogiton renace en Occidente. Justamente, se trata de autores leídos de cerca por Moreno.


Tuesday, September 2, 2014


AM | @HDI1780

"Un despote ne doit pas obtenir du crédit" — Diderot

In an influential paper, François Velde and David Weir painstakingly calculated the internal rate of return on several French government (or quasi-government) bonds between 1746 and 1793 (*). They took securities prices mostly from Gazette de France. As a benchmark for a "safe asset" that would serve as a proxy for French sovereign risk, they chose the yield on billet d'emprunt d'octobre, also known as billet d'emprunt or Emprunt d'octobre.

* * *

Here are the results, with annual yields expressed as the are average monthly estimates of the internal rate of return:

1746 - 6.54%; 1747 - 6.10%; 1748 - 5.89%; 1749 - 5.42%; 1750 - 4.82%; 1751 - 4.79%; 1752 - 4.59%; 1753 - 4.57%; 1754 - 4.18%; 1755 - 4.70%; 1756 - 5.04%; 1757 - 5.10%; 1758 - 5.19%; 1759 - 5.42%; 1760 - 6.78%; 1761 - 6.87; 1762 - 6.93%; 1763 - 5.95%; 1764 - 5.67%; 1765 - 5.93%; 1766 - 6.30%; 1767 - 6.75%; 1767 - 6.36%; 1768 - 7.11%; 1769 - 7.11%; 1770 - 9.52%; 1771 - 10.12%; 1772 - 9.08%; 1773 - 7.59%; 1774 - 6.75%; 1775 - 5.69%; 1776 - 5.68%; 1777 - 5.86%; 1778 - 6.15%; 1779 - 6.15%; 1780 - 5.94%; 1781 - 5.97%; 1782 - 5.90%; 1783 - 5.82%; 1784 - 5.82%; 1785 - 5.54%; 1786 - 5.50%; 1787 - 5.70%; 1788 - 6.02%; 1789 - 6.47%; 1790 - 6.34%; 1791 - 5.14%; 1792 - 5.44%; 1793 - 5.77%.

There is a sizeable downshift in yields between 1763 and 1765, no doubt reflecting the end of the Seven Years' War. But then look at the years 1770-1772, which Ferdinando Galiani saw as "un moment critique pour la France." The increase in yields shows the market reaction to the stern measures taken by Contrôleur des Finances Joseph-Marie Terray, including the forceful conversion of tontines into life annuities and the unilateral reduction of cash-flows on several types of securities. As Velde and Weir note, rates of return never went back to the 5% levels of the early 1750s—although they declined as soon as Terray and Maupeou were out of office. They rightly conclude: "Terray's partial defaults in 1770 launched rates upward". Brilliant stuff indeed!

But I also think that chancellier René-Charles de Maupeou deserves part of the blame—much more on that ... in early 2015!

(*) François R. Velde and David R. Weir: "The Financial Market and Government Debt Policy in France, 1746–1793", The Journal of Economic History, Vol. 52, No. 1, March 1992, pp. 227-255.