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Conventionalism and liberalism in Jacques Rueff's early works (1922 to 1929)

2009; Taylor & Francis; Volume: 17; Issue: 3 Linguagem: Inglês

10.1080/09672560903204957

1469-5936

Ludovic Frobert,

Economic Theory and Policy

Abstract From the early 1920s, the French economist Jacques Rueff (1896 to 1978) aimed to reconstruct liberalism on new and modern foundations in order to meet the new challenges faced by capitalism. In this perspective, he presented in 1922 his own discourse on economic method, and a few months later presented his first economic analysis on money, unemployment and international trade. Rueff asserted that his methodology and the philosophical foundations on which it was built – Henri Poincaré's Conventionalism – supported his theory and doctrine. It is the purpose of this paper, focused on the 1922 to 1929 period, first to study Rueff's methodology, theory and doctrine, and second to examine the problematic relations (Methodology → Theory → Doctrine) between these three levels of his first intellectual project. Keywords: Jacques RueffConventionalismliberalismFrench economic engineers Notes 1 In 1933 Rueff wrote a pamphlet, Feu le Libéralisme?. This was never published, although a shorter version appeared in la Revue bleue in 1935 (Rueff Citation1935). In this text, he offered a strong and traditional critique of contemporary experience of organized economies. The pamphlet ended with a chapter on his conception of modern liberalism. Surprisingly for us, he envisaged calling this chapter 'Libéralisme de gauche', only to cross this out. Next he tried 'Restauration de la pensée consciente', again crossed out. He finally settled on 'Restauration du libéralisme'. See the Rueff Archives (RA) – the Fonds Jacques Rueff (RA 579 AP/132). 2 Emil Claasen presented one of the rare systematic analyses of Rueff's methodology (Claasen Citation1967). However, Claassen's analysis focused on the similarities between Rueff's economics methodology and Logical Empiricism – whereas this presentation will try to underline some curious and unexpected proximities between Rueff's methodology and Pragmatism, as well as study the consequences of these proximities on his economics and political thought. 3 In his methodological texts of the early 1920s, Rueff mentioned no epistemological debates in economics. On the other hand, his references included Henri Poincaré's Citation1902 La science et l'hypothèse, Pierre Boutroux's 1914 Principes de l'analyse mathématique, Léon Brunschvig's 1912 Les étapes de la philosophie mathématique, Arthur Eddington's 1920 Space, Time and Gravitation, Jean Perrin's 1913 Les atomes, and Emile Borel's Citation1914 Le hasard. 4 Henri Poincaré (1854 to 1912) was one of the most famous French mathematicians of the time. He initiated modern combinatorial topology and made lasting contributions to mathematical analysis and celestial mechanics. As a philosopher of science, he notably published La Science et l'hypothèse (PoincaréCitation1902), a text in which he formulated Conventionalism; 'One does not ask', he wrote, 'whether a scientific theory is true, but only whether it is convenient' (PoincaréCitation1902). 5 Pierre Duhem (1861 to 1916), the French physicist, is remembered in philosophy for La Théorie physique: son objet, sa structure (1906). Duhem's conception of science is that it is simply a device for calculating: science provides a deductive system that is systematic, economical, and predictive, but not one that represents the deep underlying nature of reality. 6 Paul Painlevé (1863 to 1933), the French mathematician, taught as a professor at the Sorbonne, the Ecole Polytechnique and at the University of Lille. Painlevé was also a politician. A Republican and Radical, he was deputy and then several times minister (War Minister and Prime Minister) between 1915 and 1929. 7 Clément Colson (1853 to 1939), the French economist and engineer, was a professor at the Ecole Polytechnique. 8 Emile Borel (1871 to 1956), French mathematician and probabilist. He published Le hasard (Borel Citation1914) and directed the important series Traité du calcul de probabilité et ses applications (1924 to 1934). He was professor at the Sorbonne, holding the chair of Theory of Functions (1909 to 1941). He also served as director of the Ecole Normale Superieure (1910 to 1920). After World War I, as a politician close to the Radical-Socialist Party, he was deputy and minister (Navy). He wrote an important political text, La politique républicaine, in 1924. 9 Paul Langevin (1872 to 1946), the French physicist, studied paramagnetism and became professor of Physics at the Collège de France in 1909. 10 Jean-Baptiste Perrin (1870 to 1942), the French physicist, specialized in the Brownian movements of particles. He wrote his book Les atomes in 1913. He was professor at the Sorbonne from 1910 to 1940 and received the 1926 Nobel Prize in Physics. 11 Emile Boutroux (1845 to 1921), was a French philosopher of science and religion. At a time when the power of science was rising inexorably, Boutroux defended the idea that religion and science are compatible. His main work De la contingence des lois de la nature in 1874 was an analysis of the implications of Kantian philosophy for science. He was a professor of the history of modern philosophy at the Sorbonne from 1888. 12 Paul Tannery (1843 to 1904), French historian of science. 13 Benjamin Baillaud (1849 to1934), the French astronomer, specialized in celestial mechanics and in 1907 became director of the Paris Observatory. 14 Commenting on Boutroux's works on the idea of contingency, M.J. Nye wrote: '[his] analysis emphasized the freedom with which the mind contemplates a natural world characterized by spontaneous movement and life. He demonstrated the extent to which natural laws (including scientific laws and historical laws) are man's freely reasoned creations and not nature's necessity' (Nye Citation1979: 113). 15 Henri Bergson (1859–1941) one of the most influential French philosophers at this time. He was a professor at the Collège de France and won the Nobel prize for literature in 1927. Bergson's philosophy was hostile to materialism and mechanism, While embracing evolution, he saw it as driven by a creative force or original impetus of life rather than the blind operation of natural selection. Bergson underlined the power of the will and his epistemology raised the role of intuition. In the early 1920s Bergson was the dominant figure in French philosophy. It is not surprising that the young Rueff sought his support. Moreover, if Rueff's methodology borrowed little from Bergsonian subjectivism or his conception of uncertainty (a theme which would later attract Neo-Austrian economists), it agreed with Bergsonism over issues of power, will and the role of action. 16 In 1921 Borel oversaw the translation of Albert Einstein's La théorie de la relativité restreinte et généralisée à la portée de tous, and wrote the preface to it. In his L'espace et le temps, Borel discusses Einstein's principles. 17 Edouard Le Roy (1870 to 1954), French mathematician and philosopher, was a disciple of Bergson, who he was to succeed at the Collège de France, and whose philosophy he steered towards a radical nominalism. 18 Arthur Eddington (1882 to 1944), English physicist, was one of the first to appreciate the importance of Einstein's theories of special and general relativity. 19 Borel notes that 'to explain a phenomenon statistically is to look at it as the result of a large number of unknown phenomena governed by the laws of chance' (Borel Citation1914: III). 20 In his first lectures at the Institut de Statistique de l'Université de Paris in 1923, Rueff quotes Borel's work as presented in Le Hasard and mentions Eugène Bloch's Théorie cinétique des gaz. In the Rueff archives there are some lengthy notes taken from Léon Walras's Element d'économie pure, a work that Colson had just recommended to him. Rueff also praised Irving Fisher (The Purchasing Power of Money), remarking that Fisher's equation of exchange 'encompasses also all monetary economics'. Rueff discusses Fisher's index of monetary stabilization in letters to Colson. 21 Here Rueff responds to and differentiates himself from French old liberalism, which still expressed itself, particularly in the Journal des économistes fighting a rearguard action against the mathematization of economics, opposing to it human subjectivity, freedom and free-will. 22 In his Economic Doctrine and Method, Joseph Schumpeter contrasted these two types of economist: the expert in administration and the philosopher. He wrote that the philosopher was a 'thinker to whom social activities as such appeared as the fundamental problem and as an essential element in their conceptions of the world' (Schumpeter Citation1954: 9). 23 Concerning the intellectual reception of Rueff's thesis on British unemployment, see Benjamin and Kochin (Citation1979). 24 Three levels could be distinguished:–In terms of theoretical argumentation: Rueff took up the problem of transfers for the first time in the third section of an article on exchange rates that was published in the Revue Générale des Sciences. A shorter, complementary article appeared in the Comptes-Rendus Hebdomadaires des Séances de l'Académie des Sciences. –On the level of political action: in 1922 Rueff had already responded to Alexandre Ribot's request and written a 'Report' on the issue of reparations. In January 1923 he summarized it for Merillon, an advisor to Poincaré, who was then Prime Minister and Minister of Finance. Then in 1928 Edouard Dolléans, at that time Secretary General of the International Chamber of Commerce, invited him to take part in the activities of both the international regulatory committee and the balance of payments committee, and to present his 'Report on the issue of international financial regulation' at the June session (RA 579 AP/38). –On the level of polemical debate: in 1928 Rueff argued against René Deméjean in the pages of the Revue Politique et Parlementaire (Deméjean Citation1928, Rueff Citation1928), and in 1929, most significantly, he wrote a response to Keynes in the pages of the Economic Journal. In the Economic Journal of March 1929, Keynes had published 'The German Transfer Problem', a text to which Bertil Ohlin had reacted three months later in the pages of the same journal, publishing his 'The Reparation Problem, a Discussion: Transfer Difficulties, Real and Imagined'. In May 1929 Rueff sent Keynes a critique of his arguments as well as the article he had published a few months before (November 1928) in the journal, L'Information, 'Une erreur économique: L'organisation des transferts'. Keynes proposed that Rueff should publish his critique, which appeared in the Economic Journal of September 1929, 'Mr. Keynes views on the Transfer Problem'. See Rueff (Citation1979b: OC 2.2: 201–2). 25 To use Rueff's words, a mechanism 'which divides and groups individual activities which gives each person a role in the infinite orchestra, which governs men and corrects their errors, which rules without ever making an appearance and, finally, ensures the perennial nature of the collective by bringing to chaos an order which allows it to endure'. 26 Paul Hymans (1865 to 1941), liberal nationalist Belgian politician. 27 Aristide Briand (1862 to 1932), French politician, deputy and minister. After the First World War he became a supporter of international pacifism through the League of Nations. See A. Briand's 1930 Memorandum sur l'organisation d'un régime d'union fédérale européenne. 28 Saint-John Perse (pseudonym of Alexis Léger) (1887 to 1975), French poet and diplomat, Nobel Prize for Literature in 1960. 29 'You cannot have a liberal customs policy in the name of industrial or commercial interests […]. Only an awareness of general and collective interests and of the utter necessity of a coherent international policy can justify and impose the application of a liberal customs policy'. 32 J. Rueff, 'Report on the international bank and the League of Nations' (RA 579 AP/41). 30 'It is therefore up to governments and governments alone to set directives for commercial policy'. 31 An international treaty, the Briand–Kellog Pact was signed on August 1928, 'providing for the renunciation of war as an instrument of national policy.' It failed in this purpose, but is significant for later developments in international law. 33 See note 36. 34 It is equally important, however, to note that one of the harshest critics of Rueff was Morris R. Cohen, who, opposing Dewey, proposed a rationalist and instrumentalist philosophy of knowledge. He saw Rueff's essay as '[…] an undigest rehash of Poincaré's exaggerated nominalism and conventionalism' (Cohen Citation1931: 1151). 37 This letter can be found in the Rueff archives (RA 579 AP/36). It is signed but, unfortunately, I have not been able to identify its author. 35 On the relationship between interests and knowledge and the distinction between the different types of interests – technical, practical, emancipatory – at the origins of the types of knowledge, see: Habermas (Citation1976) 36 In France, Marcel Déat explained that the 1922 essay integrated Rueff into 'the great pragmatist tribe'. But Déat then showed that if, as he claimed, Rueff had followed his own methodological precepts, he would have reached, on a moral and political level, a form of neo-socialism and not the quite orthodox liberalism which he defended concerning reparations, finance or unemployment (Déat Citation1923). 38 Concerning French liberalism, see recent contributions: Jaume (Citation1997, Citation1998) and Rosanvallon (Citation1985, Citation2002). 39 See Bilger (Citation2003), who establishes a parallel between this French Neo-Liberal tradition and the German Ordoliberalism of W. Eucken and W. Röpke. Only after 1945, in L'Ordre Social, did Rueff attempt to more clearly define the limits between the jurisdictional zones of the market and those of organizations, using his distinction between vrais droits and faux droits (true and false rights). The continuities and discontinuities between his propositions of the 1922 to 1929 period and those formulated after 1945 deserve a dedicated study. Be that as it may, it is worth remembering that in 1947 he resumed his position in the following terms: A society will only be pacified if individual sovereignties – those of people, legal entities and the State itself – are strictly compartmentalized through the appropriation of all the existing wealth. Yet the order thus established will only answer to the moral, social or collective demands stemming from the conscience of man if certain aims are imposed on society by methods of government, which may be liberal or authoritarian. In both cases, the liberty of the individual will survive within the field – of variable size according to the political regime – that the governmental will shall not have subjugated. For liberty not to create disorder in this area, it must be disciplined by the free interplay of prices. But the free interplay of prices will remain tolerable only insofar as it is not exclusive of the stability of their average level. And this condition itself can only be satisfied through the establishment of financial equilibrium or the implementation of a generalized 'plan' requiring the strict control of individual activities and the suppression of nearly all liberties. The appropriation of wealth, the correction by the governmental action of the State which the sovereignty of 'owners' would lead to, the free interplay of prices, financial equilibrium or generalized planification, these are (…) the foundations of order in human societies. (Rueff Citation1947)