Gustave de Molinari

Gustave de Molinari (1819-1912) was a Belgian political economist and French Liberal School theorist associated with French laissez-faire economists such as Frédéric Bastiat. He is considered the founder of anarcho-capitalism, although that term was introduced decades later.

Life

Molinari was the son of the Baron de Molinari, a medical officer in Napoleon's army. In 1840, he moved to Paris where he became a member of the Société d'économie politique (Political economy Society). In 1842, he published his first essay, on the growth of the railways and their influence on the European economy. He took part in Frédéric Bastiat's "Association pour la Liberté des Échanges" (Association for Free Trade) where he became assistant secretary and editor of its journal: Le libre-échange (Free Trade). He also contributed to the Journal des économistes, the journal of the Société d'économie politique.

In 1851, the coup d'état of Louis-Napoléon Bonaparte led Molinari to leave France for Belgium. There he founded the newspaper L'économiste in 1855. During this period, in addition to his activities as an economic journalist and the writing of economics books, he also taught at the Musée de l'industrie (Museum of Industry) in Brussels and at the Institut supérieur de commerce (High Institute for Commerce) in Antwerp. He returned to France in the 1860s where he became editor of the Journal des débats from 1871 to 1876. From 1881 to 1909, he was editor of the Journal des économistes.

Molinari was particularly interested in:

• the natural rules of market organization
• the means for workers to act in the labor market, and the role of unions
• the "non-market" domains such as religion, education, etc.
• the place and role of the state

Youth

Molinari was born on 3 March 1819 in Liège, Wallonia. He was the son of the Baron de Molinari, an officer in Napoleon's army who had settled in Liège as a doctor. Very little is known about his childhood and adolescence, except for his keen interest in literature. Paris was an important artistic and cultural center for many young Europeans of that time. So in 1840, at the age of 21, he left his family to settle in Paris.

His common appearance, average height, myopia and hearing problems were well compensated by an unfailing energy and abundant hair including, as was typical at that time, a mustache and an impériale beard. What was probably his most cherished project, to become a journalist and work in the field of economics, was soon to take shape, thanks in part to his exceptional energy, his ability to persuade and a writing style that made him a master of the French language by the precision of expression, meaning of phrases and word clarity.

First French "campaign" (1840-1851)

In 1842, he joined the Société d'économie politique and a year later he published his first essay, on the growth of the railroads and their effects on industry in Europe. His course was set and his interest in political economy would never cease.

He became close to Frédéric Bastiat when becoming assistant secretary of the Association pour la Liberté des Échanges and editor of its journal, Le libre-échange.

During this time, he defended his ideas in various Parisian publications, including the Journal des économistes, becoming one of its most prominent figures, and publishing his first works on political economy.

During the revolution of 1848, Molinari and his friends of the Club de la liberté opposed socialist propaganda as well as the conservatives, but did not succeed in making their ideas prevail. Similarly, the attempt to rally the masses to these ideas via the Jacques Bonhomme paper, published with his friend Charles Coquelin, was a failure.

The only positive was the election of Bastiat as member of the French National Assembly, but this did not change matters much, since the hardened opinions of that time made their ideas on freedom of work and fredom of trade untenable.

In 1849, soon after the revolutions of 1848, Molinari published two works: an essay, "The Production of Security", and a book, Les Soirées de la rue Saint-Lazare, describing how a market in justice and protection could advantageously replace the state.

In 1851, the coup d'état of Louis-Napoléon Bonaparte led Molinari to leave France to return to his native land.

A time for analysis (1851-1860)

The return to Belgium after the creative period he had just lived through and the setbacks that had followed were occasion for a three-pronged approach:

• Continuation of his journalistic activities by collaborating regularly with the Journal des économistes and by establishing the newspaper L'Économiste in Belgium in 1855.

• Further development of essential concepts in various works:

  • the natural rules of market organization. On the basis of an analysis of the organization of the commodity and capital markets, Molinari perceived the fundamental role played by intermediaries (merchants and bankers) and stock exchanges in the collection and dissemination of information. He then presented an outline of the organization of the labor market that incorporated these two elements. The originality of Molinari's point of view lies in the importance he gave to the gradual emergence of a "natural organization" of markets. He did not see competition as a set of hypotheses but as an organism that develops in response to the various problems and obstacles that impede its functioning. Unlike the liberal economists of his time, he insisted above all on the fact that the establishment of free trade and economic freedom are not enough, but are only a starting point. What is today called a decentralized economy can only function properly when certain institutions have fully developed. Molinari insisted in particular on merchants, in the broad sense of the term, and on exchanges which should make it possible to resolve the difficulties that economic agents have in obtaining information on the state of the various markets on which they act.

  • the means for workers to act in the labor market

  • the "non-market" spheres such as religion, education, etc.

  • the place and role of the state, etc.

• Teaching: during this period, in addition to journalism and writing, he taught political economy at the Musée de l'industrie in Brussels and at the Institut supérieur de commerce in Antwerp.

This period, which somewhat resembles a "crossing of the desert", was essential because it allowed Molinari, strengthened by his experiences, to deepen and develop his thinking. Concerned primarily with understanding and explaining, he never hesitated to push his logic to the extreme in order to identify the fundamental forces and draw the necessary lessons.

Deepening his thoughts (1860-1893)

Continuing his collaboration with the Journal des économistes, of which he became editor-in-chief in 1881, he also participated in the Journal des débats (Journal of Debates) and wrote several works. His overall approach was based on the fundamental idea of true freedom for each individual and of a natural balance of power between capital and labor.

Lucid and not inclined to angelism, he was as wary of the excesses that ownership of capital allowed in certain situations as he was of the risks inherent in collectivism and domination by the state. This led him to oppose both the socialists and the communists, some of whose ideas he considered destructive of freedom, and the policies of Napoleon III, which did not allow the necessary freedom of expression and action. In his view, the primacy of the individual over the state, which was destined to disappear, was the only guarantor of a real and lasting freedom.

In a world full of turmoil and even in direct opposition at the time of the Paris Commune, Molinari's position, strong in its coherence but weakened by its necessarily evolving character, could not prevail. Relying on facts, Molinari continued his reflection and his action by ardently defending three points that he considered essential to the harmonious development of relations between individuals:

• Freedom of expression. Following the example of Voltaire, he believed that all opinions should be able to be expressed and that this is the price for progress in all fields of science.
• Right of association of workers. For Molinari, the possibility of association between individuals was one of the fundamental means for equilibrium in societies but, within this context, that right of workers, confronted with the power of capital, took particular importance. This is why he criticized the restrictive stance of Napoleon III on this point.
• The need to develop individuals. In order for freedom to be fully expressed, it is not enough to proclaim it, but it is also necessary that individuals be able to handle their own affairs freely and by themselves. It is therefore essential to gradually train people, hence his strong interest in education.

These analyses logically led Molinari to continue to develop his work on labor exchanges and on the absolute necessity of ethics in the economic domain.

Moreover, considering that a "state of war" is the basis for depriving individuals of freedom for the benefit of the state, he advocated systems of alliances and collective defense allowing to progressively remove the foundations of this alienation.

Time of concessions and the end (1893-1912)

Molinari's analyses, which were both seductive and rigorous, were not fully understood at the time they were developed. Several reasons can be advanced to try to understand this state of affairs.

• In an extremely tense economic situation, not taking sides with workers against capital or vice versa was not a very promising strategy in the short term.
• To conclude, by an analysis that was certainly logical and coherent, that the state should be completely abolished had little chance of being accepted. Indeed, for both sides, rightly or wrongly, this supreme entity corresponded and still corresponds (for reasons often opposite to each other) to a supreme and indispensable recourse or reference.
• Everyone is conceptually convinced of the necessity of free trade. But this freedom is experienced, on a practical level, as a major risk for the weakest and therefore as "the freedom of the strongest".
• The relevance of proofs does not necessarily imply the success of concepts. in fact, to speak of the total freedom of individuals and of the natural equilibrium that follows might appear at best as a good "bet" and at worst as a utopia. Conversely, recourse to the state, although perhaps less attractive, can be seen as a real guarantee.

Aware that he had pushed his analysis to its conclusion, as appropriate for scientific analysis, Molinari gauged the gap that separated him from the individuals of his time, capital owners or workers, consumers or producers. Without changing his general principles, particularly in the economic field, he agreed to modify his vision of the state by admitting the need for a police state, but denying it any role in the production of goods and services. In his 1899 book, The Society of Tomorrow, he proposed a federated system of collective security, and reiterated his support for private competing defense agencies.

He retired at the age of 90 and died in Adinkerke, Belgium on 28 January 1912. He is buried in the Père-Lachaise cemetery (29th division) in Paris.

Insights

Molinari's critique of the state sometimes resulted in him opposing causes and events which might seemingly be aligned with his overall critique of power and privilege. An example of this was the American War Between the States which Molinari believed to be far more about the trade interests of Northern industrialists than about slavery, although he did not deny that abolitionism was a part of the picture. According to Ralph Raico, Molinari never relented:

The American Civil War had not been simply a humanitarian crusade to free the slaves. The war "ruined the conquered provinces," but the Northern plutocrats pulling the strings achieved their aim: the imposition of a vicious protectionism that led ultimately "to the regime of trusts and produced the billionaires".¹

Molinari supported his liberal views by citing evolutionary concepts, claiming that the "economic state" (an international commercial system) would have a complete laissez-faire. He argued this was the ultimate stage of social evolution, caused by a struggle for existence between competing commercial actors. War has been the driver of early social systems, he felt, which encouraged invention as a result. However, after industry developed, wars grew detrimental rather than beneficial, replaced with economic competition. Molinari thought this would be better, since it applied to all classes in society. As the less fit were eliminated by competition, the entire society would be raised over time. He argued competition like this would never end, but continue forever. Molinari opposed both monarchy and socialism as being detrimental to this process. Acknowledging that great poverty had risen in tandem with wealth, he argued poverty would be eliminated through moral evolution occurring alongside economic progress, which was necessary for it.

Influence

Some anarcho-capitalists consider Molinari to be the first proponent of anarcho-capitalism. Murray Rothbard called The Production of Security the "first presentation anywhere in human history of what is now called anarcho-capitalism", although admitting that "Molinari did not use the terminology, and probably would have balked at the name"². Austrian School economist Hans-Hermann Hoppe says that the "1849 article 'The Production of Security' is probably the single most important contribution to the modern theory of anarcho-capitalism".³ In the past, Molinari influenced some of the political thoughts of individualist anarchist Benjamin Tucker and the Liberty circle. The Molinari Institute directed by philosopher Roderick T. Long is named after him, whom it identifies as the "originator of the theory of Market Anarchism".⁴

This article is derived from the English Wikipedia article "Gustave de Molinari" as of 3 Mar 2022, which is released under the Creative Commons Attribution-Share-Alike License 3.0, and the French Wikipedia article "Gustave de Molinari" as of 26 Nov 2021, which is released under the Creative Commons Attribution-Share-Alike License 3.0.