Yes, A.R.J. Turgot is long dead but ever since the Turgot Collection came out, I’ve been thinking of him as a friend. I’ve enjoyed reading his thoughts, not only because he is such a champion of free commerce and an opponent of all economic controls, but also because his description of his world reminds me so much of our own.
Yesterday we ran his wonderful essay on the difference between fairs and real markets. Fairs in Turgot’s time were apparently officially sanctioned gatherings of merchants where the merchants were given special incentives to be there because they were permitted to buy and sell outside the controls and monopolies enforced within the city states.
Turgot observes that despite the appearance of flourishing trade at fairs, there was an element of phoniness about the entire thing: they existed only because of the controls on general markets. He argued that these controls are more costly to society than people suppose, so costly that not even the flourishing commerce at fairs can make up for it.
A fair and a market are therefore both a gathering of merchants and customers at a set time and place. But in the case of markets the merchants and buyers are brought together by the mutual interest they have in seeking each other, while in the case of fairs it is the desire to enjoy certain privileges — from which it follows that this gathering is inevitably much more numerous and solemn at fairs. Although the natural course of commerce is sufficient to establish markets, as a result of the unfortunate principle which in nearly all governments has infected the administration of commerce — I mean, the mania of directing all, regulating all, and of never relying on the self-interest of man — it has happened, in order to establish markets, that the police has been made to interfere; that the number of markets has been limited on the pretext of preventing them from becoming harmful to each other; that the sale of certain goods has been prohibited except at certain appointed places, either for the convenience of the clerks charged with receiving the duty with which they are burdened, or because the goods were required to be subjected to the formalities of testing and marking, while offices cannot be established everywhere.
How many such fairs exist in our time? Many, I should think. Cities commonly establish no tax days in order to encourage temporary buying sprees. Special tax breaks exists on all sorts of spending and behaviors as a reflection of political priorities. Goods and services are frequently exempted from controls in an effort to manipulate market outcomes. Certain states enjoy “most favored nation” status and enjoy some element of free trade while others are off the list. These are all examples of truncated markets, and the boost in consumption and production that takes place because of the temporary relief from oppression really represents a distortion.
In any case, it is great to see Turgot commenting on all of this in his time in much the same way Mises.org comments on this in our time. The state never changes. It is always and everywhere wrecking things. Had Turgot had swayed the leaders of his time, there probably would have been no French Revolution, no Napoleon, no European wars and upheaval, and France today would be a very different country. Maybe Turgot can have another chance to persuade us today.