Essai politique sur le commerce by Jean-François Melon (review)

Today, Jean-François Melon’s Essai politique sur le commerce is rightly considered a major work in European Enlightenment political economy.⁽⁶⁾ Kenneth Carpenter ranks it quite high in The Economic Bestsellers before 1850,⁽⁷⁾ noting its twenty editions in over eight different languages (German, English, Danish, Spanish, French, Italian, Russian and Swedish). In 1771, Turgot, who could hardly be suspected of sympathy for an author with positions diametrically opposed to his own on such matters as luxury goods, indirect taxes, public credit and slavery, expressed high esteem for the work, which he had read attentively in his youth. Jean-François Melon, cofounder of the Academy of Sciences of Bordeaux, was secretary to John Law when Law was Controller General of France’s finances and to the regent Philippe d’Orléans after Law fell. Following Philippe’s death in 1724, Melon returned to private life, though the royal administration still regularly consulted him, particularly on monetary questions. Returning to his writing, he first produced an allegorical history of the regency entitled Mahmoud le Gasnevide (1730), written in the Orientalist fashion initiated by his friend Montesquieu in the Lettres persanes. But it was his Essai politique sur le commerce (first edition 1734) that won him an important place in Enlightenment historiography.

The first edition of the Essay is somewhat dry and technical, as might be expected from a specialist of the economics and finance of his time. It was short (slightly over 250 pages) and comprised eighteen chapters; the first nine discuss the real economy, the following nine the monetary economy. Two chapters are particularly remarkable: the introduction, judiciously entitled “Principles,” and the last chapter, “Of public credit,” which puts Law’s system, with which Melon was quite familiar, into theoretical and historical perspective.

In the first chapter he develops an abstract model of international and political relations by way of the famous “island” parable. As a good Cartesian who will move from the simple to the complicated, he starts by assigning a single product to each island: corn for one, wool for another, and so forth. He then demonstrates that if the first island is self-sufficient it will be able to exchange products with the other islands while maintaining a surplus. In this way it will drain all the other islands’ resources, particularly human ones. In a few lines, Melon seems to have grasped the pre-eminence that commerce would begin to acquire in international power relations in the first half of the eighteenth century and its naturally political nature. In the remainder of the chapter he works to refine the model, for as he himself acknowledges, the material advantage of having a corn surplus is not necessary in a multi-state Europe; all a country needs is a trade surplus. In the following chapters he further complexifies his analysis, taking into account the dynamic effects of technical progress (a factor seldom included at the time), luxury goods, colonies and population growth (these being more classic factors). Melon’s work is highly sophisticated and far ahead of the thinking of seventeenth-century English authors.

Though his discussion of Law’s system is brief, it immediately elicited reaction from his contemporaries, particularly several other important actors in that system: Nicolas Dutot and the Pâris brothers. More generally, Melon’s discussion of the currency question, which takes up nearly half of the work, had considerable resonance in Enlightenment Europe. Galiani in Naples, David Hume in Scotland, administrators and writers in Spain, Sweden and France were indebted to Melon’s work either in that they borrowed his ideas–such as the positive role that currency devaluations can play–or because they opposed them; Hume, for example, in his Political Essays, contested Melon’s Law-inspired advice to increase monetary mass.

Two years after the Essai was published, Melon brought out a new, enlarged edition with...