A Biography of A.R.J. Turgot – Part 6 – INFLUENCE

One of the striking examples of injustice in the historiography of economic thought is the treatment accorded to Turgot’s brilliant analysis of capital and interest by the great founder of Austrian capital-and-interest theory, Eugen von Böhm-Bawerk. In the 1880s, Böhm-Bawerk set out, in the first volume of his Capital and Interest, to clear the path for […]

A Biography of A.R.J. Turgot – Part 5 – THEORY OF MONEY

While Turgot did not devote a great deal of attention to the theory of money, he had some important contributions to make. In addition to continuing the Hume model and integrating it with his analysis of interest, Turgot was emphatic in his opposition to the now dominant idea that money is purely a conventional token. […]


In the roster of Turgot’s outstanding contributions to economic theory, the most remarkable was his theory of capital and interest, which, in contrast to such fields as utility, sprang up virtually full-blown unrelated to preceding contributions. Not only that, but Turgot worked out almost completely the Austrian theory of capital and interest a century before […]


In one sense, Turgot’s theory of production followed the physiocrats– only agriculture is productive, so there should be a single tax on land. But the major thrust of his theory of production was quite different from that of physiocracy. Even though only land was supposed to be productive, Turgot readily conceded that natural resources must […]

A Biography of A.R.J. Turgot – Part 2 – VALUE, EXCHANGE AND PRICE

One of the most remarkable contributions by Turgot was an unpublished and unfinished paper, “Value and Money,” written around 1769. Turgot developed an Austrian-type theory first of Crusoe economics, then of an isolated two-person exchange, which he later expanded to four persons, and then to a complete market. By concentrating first on the economics of […]

A Biography of A.R.J. Turgot – Part 1 – LAISSEZ-FAIRE AND FREE TRADE

Turgot’s mentor in economics and in administration was his great friend Jacques Claude Marie Vincent, Marquis de Gournay (1712-1759). It is fitting, then, that Turgot developed his laissez-faire views most fully in one of this early works, the “Elegy to Gournay” (1759), a tribute offered when the Marquis died young after a long illness. Turgot […]

A Biography of Adam Smith – Part 9 – On taxation

Over the centuries, economists have contributed little of interest or value on the subject of taxation. In addition to describing forms of taxation, they have generally approached the subject from the point of view of the state as a kindly or not so kindly despot, seeking to maximize its revenue while doing minimum harm to […]

A Biography of Adam Smith – Part 8 – The myth of laissez-faire

If, then, Adam Smith contributed nothing of value to economic thought; if, in fact, he introduced numerous fallacies, including the labour theory of value, and thereby caused a significant deterioration of economic thought from previous French and British economists of the eighteenth century; did he make any positive contribution to economics? A common answer is […]

A Biography of Adam Smith – Part 7 – The theory of money

We have seen that David Hume‘s famous elucidation of the price-specie-flow mechanism in international monetary relations, though attractively written, was itself a deterioration from the pioneering and highly sophisticated analysis of Richard Cantillon. It was, however, better than nothing. Yet, as Jacob Viner put it, ‘One of the mysteries of the history of economic thought’ […]

A Biography of Adam Smith – Part 6 – The theory of distribution

Adam Smith’s theory of distribution was fully as disastrous as his theory of value. Though he was aware of the functions performed by the capitalist, his only venture in explaining the rate of long-run profit was to opine that the greater the ‘amount of stock’ the lower the rate of profit. He arrived at this […]