1
Turgot, 1727-1781.
Jacques Turgot (Baron de l'Aulne) was perhaps the leading economist of 18th
Century France. Although often lumped together with Quesnay and the
Physiocrats, his contributions were quite distinct and advanced considerably
upon Physiocratic theories. Turgot can be said to have formed a distinct
school of his own, counting the Abbé Morellet and the Marquis de Condorcet
as close friends and disciples. More importantly, Turgot exercised a deep
influence upon Adam Smith, who was living in France in the 1760s and was
on intimate terms with Turgot. Many of the concepts and ideas in Smith's
Wealth of Nations are drawn directly from Turgot.
Born to a prosperous merchant family in Paris, Jacques Turgot's father was
the Michel Turgot to whom, apparently, is owed the celebrated "Map of Paris"
of 1739. A brilliant student at the Sorbonne, Jacques Turgot was originally
destined for a clerical-academic career. He was made a prior of Sorbonne in
1749 and requested to composed two discourses to be read in Latin.
Turgot's second discourse, on the progrés successifs de l'ésprit humain
(1750) outlined his famous philosophy of history. Turgot argued that human
societies pass through cycles of barbarism and civilization, the former
attended by superstition, the latter the fruits of reason. He discussed the
transfer from one to the other and back again. Human restlessness, a taste
for liberty and a critical spirit elevates societies into civilization, but then these
impulses become institutionalized and conservative and become the very
impediments of further progress. Reason morphs into superstition, and
society is driven back into barbarism.
So, for Turgot, human progress is not self-reinforcing but contains the seeds
of its own demise. On the optimistic side, demise is never permanent. Turgot
was confident that the human spirit would always drive a society out of
stagnation. In many ways, Turgot's thesis has a rather prescient Comtian
character. Turgot hailed the France of Louis XV as very much in the upswing
of the cycle. It is interesting that he pointed out entrepreneurs were a
progressive driving force and that the State would do well to permit great
2
latitude. It also predicted the eventual revolt and independence of the
American Colonies from the English Crown.
Not long after delivering the discourse, Turgot decided against ordination in
the Church and instead entered a career in the royal administration. From
1751 to 1760, Turgot worked at the parlement in Paris. He hobnobbed with
the philosophes and contributed several articles (two of them on linguistics) to
the famous Encyclopèdie of Denis Diderot. In 1753, Turgot wrote his Lettres
urging toleration of Protestants in France. In 1755-6, Turgot accompanied
the free-trade advocate Vincent de Gournay on his official tours of France
and, on their travels, Gournay got him thinking about economic matters. Upon
Gournay's death, Turgot penned a marvelous eulogy to his fallen mentor
(1759).
From 1761 to 1774, Turgot was chief administrator (intendant) for Limoges.
He immediately set himself to work -- fixing roads and drainage, improving tax
collection, reducing internal tariffs, introducing a better relief system for the
poor, etc. Limoges, hitherto one of the poorest areas of France, became a
showpiece for what a determined and enlightened administrator could
accomplish. Many of the reforms he would later institute throughout France
were first tested out here at a smaller scale.
Intellectually, this was also Turgot's most productive period. His masterpiece
was undoubtedly his Reflections on the Formation and Distribution of Riches
(1766). Here, Turgot introduced the concept of capital into the Physiocratic
system. He also clarified the meaning of "surplus" and provided the link
between the "surplus" and "growth" and relating the profit rate to the rate of
interest. He was also among the first to make clear the distinction between
"market" price and "natural" price. As a result, Turgot differed from original
Physiocrats on the nature of the produit net, i.e. that surplus could be
generated by industry as well as agriculture. All of these ideas were to be
taken up by Adam Smith and the Classical School.
Turgot can also be considered a forerunner of the Marginalist Revolution. His
Valeurs et Monnaies (1769) contains a strikingly well-developed demandbased theory of price. In that same work, he presents a remarkably prescient
account of how large number of traders reduce the degree of indeterminacy of
3
exchange, a topic later taken up Edgeworth. Another notable economic
contribution (in his 1768 Observations) was the introduction of variable input
proportions in production. Turgot was also the first to conceive of the notion
of diminishing marginal productivity to factor inputs. Finally, his 1766
discussion on money included the distinction (not made hitherto) between the
real and nominal rates of interest.
On account of his success as an administrator in Limoges and his impressive
intellectual abilities, the Comte de Maurepas asked Turgot to join his new
reformist cabinet. Turgot served as contrôleur général (the equivalent of a
minister of finance) under King Louis XVI from 1774 to 1776.
Turgot was adamant about saving the finances of the decrepit Ancièn
Regime. He figured that if he could keep government spending in check and
encourage private economic enterprise, tax revenues would rise and state
finances would return to solvency. However, he believed that the old
Colbertiste strategy of state-sponsored corporations and protectionist
measures kept industry uncompetitive and unproductive. Inspired by Vincent
de Gournay, Turgot intended to unleash the forces of competition and free
markets. To do so, not only would he have to reverse Colbertiste economic
policies, he would also have to dismantle the Medieval institutions that kept
the French economy in thrall.
Turgot started slowly, propping up growth industries such as the Lyons silk
manufactures, improving roads and transportation, simplifying the tax system,
improving tax collection, abolishing some monopolies, paying back public
debts, etc. He also began reigning back the lavish spending of the French
court and government. His slogan "No bankruptcy, No new taxes, No loans"
left little room for anything else.
In 1775, Turgot took one of his boldest moves and lifted the controls on the
internal trade of grain. This measure had been long advocated by Herbert,
Gournay and Turgot himself (e.g. 1763, 1770). Alas, the immediate
beneficial impact of that policy was canceled by the crop failures of that same
year. Turgot dealt rather harshly with the ensuing riots -- the so-called "Flour
Wars" -- earning him much notoriety among the populace.
4
In 1776, Turgot issued his famous "Six Edicts". The first four were of little
consequence. The fifth dissolved the guild system, which had since the
Middle Ages kept a stultifying hold over commerce and industry. The sixth
eliminated the corvée (i.e. the yearly labor owed by peasants to the state) and
implemented the Physiocrats' favorite policy -- l'impôt unique (the single tax
on property). The nobleman and the landed gentry rose up in protest against
both these measures. Turgot was unmoved and enforced his policies by royal
decree -- itself an unpopular strategy.
By now, Turgot had successfully made enemies with practically every class of
person in France -- except the economistes, who cheered him on. In the
French court, his back was covered only by the king but, when Turgot crossed
Queen Marie Antoinette by refusing favors to her protegès, the die were cast.
Turgot was dismissed in 1776. Before departing, Turgot presciently warned
Louis XVI, "Do not forget, Sire, that it was feebleness that placed the head of
Charles II on the block." Condorcet (then at the royal mint) attempted to
resign in protest. Turgot was succeeded by Jacques Necker, who proceeded
to reverse most of his edicts and policies.
Turgot did not live to see the 1789 Revolution created by the economic
tensions which his policies purportedly sought to defuse. Given his record, it is
an open question whether Turgot might have been driven to guillotine by the
revolutionaries. Unlike his disciple, Condorcet, Turgot was not a republican
and was unpopular among the people. He was a staunch royalist who
believed in radical reform as a necessary step to avert an even more radical
revolution. His methods may have been heavy-handed at times, but he
realized, like nobody else did, the absolute urgency of reform.
Major works of Jacques Turgot






Lettre à M. l'abbé de Cicé, depuis évêque d'Auxerre, sur le papier supplée à la
monnaie, 1749 (copy)
Les avantages que la religion chrétienne a procurés au genre humain,
Discours prononcé en latin, dans les écoles de la Sorbonne, 1750.
Tableau philosophique des progrés successifs de l'ésprit humain, Discours
prononcé en latin, dans les écoles de la Sorbonne, 1750.
Plan de deux discours sur l'histoire universelle, 1751.
Plan d'un ouvrage sur la geographie politique, 1751.
Fragmens et pensees detachees pour servir a l'ouvrage sur la geographie
politique, 1751.
5





















Lettres sur la tolérance, 1753-4
"Étymologie", "Existence", Expansibilité, "Foires et Marchés", "Fondation",
"Langues", 1757, articles in Encyclopèdie of Diderot and d'Alembert.
"Éloge de Vincent de Gournay", 1759, Mercure.
Le commerce des grains: Projet de lettre au contrôleur général Bertin sur un
projet d'édit, 1763.
Réflexions sur la formation et la distribution des richesses, 1766 (Eng:
Reflections on the Formation and Distribution of Wealth) (copy)
Circulaire aux officiers de police des villes, 1766
Observations sur les mémoires de Graslin et Saint-Péravy, 1767.
Lettres sur les émeutes populaires que cause la cherté des bleds et sur les
précautions du moment, 1768 (attrib.)
L'impôt indirect: Observations sur le mémoires récompensés par la Société
d'Agriculture de Limoges, 1768.
Lettres à Hume, 1768.
Valeurs et Monnaies: Projet d'article, 1769 - (copy),
Lettres à DuPont de Nemours, 1766-70
Mémoire sur les prêts d'argent, 1770.
Lettres au contrôleur général (abbé Terray) sur le commerce de grains, 1770.
Extension de la liberté du commerce des colonies, 1772
Lettre au contrôleur général (abbé Terray) sur la marque des fers, 1773.
Arrêt du Conseil établissant la liberté du commerce des grains et des farines à
l'intérieur du royaume et
la liberté de l'importation, 1774
Mémoire sur les moyens de procurer, par une augmentation de travail, des
ressources au peuple Paris,
dans le cas d'une augmentation dans le prix des denrées, 1er mai 1775, 1775
Des administrations provinciales : mémoire présenté au Roi, 1788
Mémoires sur le prêt à intérêt et sur le commerce des fers, 1789
Oeuvres de Turgot. Vol. 1, Vol. 2, (ed. Dupont de Nemours), 1844