8
NICOLAS DE CONDORCET (1743–1794)
The French Adam Smith
Most of the people surveyed in this book made contributions to economics that were important but subtle. It is difficult to explain in a single word or phrase the impact of, say, Richard Cantillon or Alfred Marshall–their contributions were more to do with how to think or act like an economist.
The same is not true for Marie Jean Antoine Nicolas de Caritat, Marquis of Condorcet–more commonly known as plain old “Condorcet”. A famous idea about voting, the “Condorcet paradox”, is named after him. In the past 20 years researchers have cited Condorcet some 30,000 times.
In part because of his association with his famous paradox, an abstract and difficult-to-understand beast, Condorcet is often considered to be a pioneer of the use of mathematics in economics. Read pretty much any economics research published today, and it will include plenty of complex equations. To many, Condorcet epitomises the hyper-rational approach taken by modern economists–one where economists make logical deductions from formal axioms, or first principles, ignoring much of the mess of history. Emma Rothschild says that “Condorcet has been seen, since his death in 1794, as the embodiment of the cold, oppressive Enlightenment.” But is that widespread perception a fair one? In fact, Condorcet was a subtler thinker than the caricature allows.
A revolutionary mind
Born in 1743 in northern France, Condorcet was a polymath. He wrote on a wide range of subjects, in particular for the final 20 years of his life. His mind wandered from the American Revolution to voting reform to the grain trade. “The public figures whom he most admired wrote works of profound theory… in a single evening, and dissertations on power… while travelling on river boats,” says Rothschild. Schumpeter grudgingly acknowledged that “[a]mong other things, [Condorcet] was a trained mathematician; his ventures in the application of the calculus of probabilities to legal and political judgments… gave an important impulse; he propagated ‘natural rights,’ popular sovereignty, and equal rights for women, and was a great hater of Christianity.” He was not afraid to speak his mind, criticising the French Constitution of 1793 and being called a traitor as a result. He continued to write while in hiding, but was eventually murdered by revolutionaries.
Let us turn to that famous Condorcet paradox then. What exactly is so special about it? First, some context. It is important to understand why Condorcet started to think about theories of voting. At the time he was writing, more and more ordinary people were being given a say in how their country was being run. In 1776 America had broken free from Britain; in Britain the ascendant capitalist class was having ever more influence over economic and political decisions. The gradual dispersal of power away from a tiny elite at the top was good, of course. But Condorcet perceived that it could pose intellectual problems. Democratic systems of voting, in particular, turned out to be inherently unstable.
When just one person is running the country, making a decision is very easy: everyone does what the king/queen says. When more people have a say, however, things get more complicated. How do the preferences of individuals translate into decisions made on their behalf? The easy answer to this is: “the majority decides”. That is how elections are run in democratic countries today. But Condorcet shows that, under fairly mild assumptions, it is possible to reach an impasse quite quickly, where it is impossible to make any decision at all and remain democratic. Especially when there are more than two possible options to decide between, democracies show themselves to be quite indecisive creatures.
Unfortunately, most explanations of the Condorcet paradox that you will read are not very enlightening to the outsider because they rely heavily on jargon. What follows is my attempt to explain it in as simple language as possible. No doubt I will annoy someone who knows the theory well but that’s a risk I’m willing to take.
Condorcet starts from the assumption that voters’ preferences are rational in a narrow sense (or, in the jargon, “transitive”). If you prefer pizza to burritos, and burritos to sushi, then it follows that you prefer pizza to sushi. Condorcet then goes on to show that even when all the voters’ preferences are rational (transitive), as a whole the group’s preferences may be intransitive.
Imagine that a group of three friends is deciding whether to go to an Italian, a Mexican or a Japanese restaurant. The first person’s order of preferences goes: pizza, burrito, sushi. The second person’s goes: burrito, sushi, pizza. The third person’s goes: sushi, burrito, pizza. Under such a circumstance, it is impossible to decide rationally where to go for dinner. Choosing pizza is not a majority decision because persons 2 and 3 would prefer something else. Neither is choosing sushi. Nor a burrito. The cycle goes on for ever, and we can never find a democratic choice.
Pizza politics
But why does this insight matter? In the 19th century the paradox was not much discussed. The reason it is so influential today is probably because of the impact it had on Kenneth Arrow (1921–2017), an economist who devised something called the “impossibility theorem” in the 1950s. Without going into the details of this theory, which is more complicated than Condorcet’s, Arrow showed that under fairly mild assumptions it becomes quite difficult to collect individual preferences and then shape them into collective decisions. As Michael Morreau, a philosopher, points out, “[t]here are some who… take Arrow’s theorem to show that democracy, conceived as government by the will of the people, is an incoherent illusion.” Arrow’s theorem explains, in the words of Larry Summers, a former US treasury secretary, “why committees have so much trouble coming to consistent conclusions and why, with an increasingly polarised electorate, democracy can become increasingly dysfunctional”.
These may sound like extreme statements. But it turns out that Condorcet’s paradox has some real-world applications. Following Britain’s Brexit referendum of 2016 there was a lively discussion about whether Britain was living in the middle of a Condorcet paradox. The Brexit debate boiled down to three options: Remain, Soft Brexit, or Hard Brexit. Here is where it gets complicated. None of these three options could beat the other two combined. A coalition of hard and soft Brexit beat Remain in the 2016 referendum. But a coalition of Remain and hard Brexit could defeat any soft Brexit proposal. And yet soft Brexiteers could gang up with Remainers to stop any hard exit.
The paradox, then, can be summarised in one sentence: society faces three options, none of which commands more support than the other two combined. It sheds more light on Brexit than volumes of punditry and commentary. It also puts in perspective the claim that Britain’s political class is unusually stupid or shambolic.1 Everyone can know their mind and be consistent in their thinking. And you can still get a shambolic result, if you impose a yes-no choice on a three-way decision.
Irritating Parson Malthus
Condorcet’s contribution to mathematical economics, then, is undeniable. But that was not his only big idea. He also came up with interesting thoughts on economic development. In effect, he asks the question: what does it mean for a society to become better off?
In a famous essay of 1795 he argued that humans were “perfectible”. His Sketch for a Historical Picture of the Progress of the Human Mind, published shortly after he died, held out the promise of a “perfect” society that was just around the corner. French society might currently be gripped by poverty, insecurity, irrationality and religion, but there was no reason why that had to endure for ever. Condorcet’s optimistic view of the world so infuriated Thomas Malthus that he immediately set down to write his deeply pessimistic Essay of 1798 (which is discussed in Chapter 11).
But what does Condorcet mean by “perfect”? It’s a pretty elastic term and Condorcet doesn’t clearly define it in his essay. One interpretation is a utilitarian one: perfection is when human happiness is maximised. These ideas were certainly floating around in Condorcet’s time. Jacques Necker, finance minister to Louis XVI, reckoned that it was possible to tot up happiness and compare it between different people. For instance, he reckoned that 20 people at the level of subsistence were roughly as happy as 10 people who could eat a little more. And he believed that pleasure was all that mattered. Necker might have been perfectly content with the idea of giving everyone a maximum dose of “soma” (the pleasure-inducing drug in Aldous Huxley’s Brave New World) since it would lead to the greatest happiness for the greatest number. Others might argue that societies that are richer are by definition better off, since more money equals more utility.
But Condorcet bitterly disagreed with the utilitarians. He did not believe that you could treat human happiness as so many units to be added or subtracted. The great mathematician therefore criticised the “use of the language of geometry” in economics on the grounds that it was “very far from leading to more precise ideas”. Rothschild reports Condorcet arguing that “[f]eeling the sweetness of liberty” was not the same as knowing “how to calculate its advantages”. The world, in other words, could not be reduced to simple mathematical calculations. Feelings and emotions mattered just as much.
Let’s put that into concrete terms. Imagine if someone tried to argue using only hard statistical data that Qatar was a better place to live than the European Union. They could point to the fact that Qatar has a GDP per person three times the EU’s. Or the fact that Qatar has better weather than the EU. But to focus just on the numbers would miss something enormous about the relative merits of living in EU versus Qatar.
What, then, are Condorcet’s views of social progress, if not the maximisation of utility? He appears to think that perfection is attained when people’s rights are fully respected. A bit like Adam Smith, Condorcet wants people to respect each other and for each person to try to understand the views of the other. For that reason he endorsed the notion of reading novels, the better to understand how people came to reach important decisions.2 Like John Stuart Mill (who also massively qualified his own views on utilitarianism), Condorcet also wants ideas never to be accepted uncritically, but to be constantly argued over.3 He wants people always to be fighting to eradicate social injustices. “His dogma”, says Emma Rothschild, “is that one should never impose one’s dogmas on other people.”
Condorcet’s rights-based approach led him to take a sceptical view of governments of all sorts. It didn’t much matter if the government thought it was enacting the “general will” or doing something “for the good for all”; whatever it did was sure to violate someone’s rights. Therefore, Condorcet is in favour of small government. Condorcet viewed anyone who claimed to impose universal principles on the people, or to speak for them, as a despot. (Is it any wonder that France’s revolutionaries executed him?)
Condorcet’s approach can, justly, be described as laissez-faire in a fairly strict sense. As he argued in 1795, “it appears to be one of the rights of man that he should employ his faculties, dispose of his wealth, and provide for his wants in whatever manner he shall think best. The general interest of the society, so far from restraining him in this respect, forbids, on the contrary, every such attempt.” Joseph Persky, an economist, refers to Condorcet’s laissez-faire as “close to absolute” (though, as we see later, the word “close” is important).
Condorcet’s “close-to-absolute” view of laissez-faire had important implications for public policy. Take the question of the transfer of wealth from one generation to the next, in the form of inheritances or gifts. Should it be taxed? As we shall see, people like John Stuart Mill and Alfred Marshall, from a utilitarian perspective, worried that the unrestricted right to pass on money would perpetuate inequality. They also worried that people who inherited lots of money would not have much of an incentive to work hard.
At the time Condorcet was writing, inheritance was a big deal. Around 1800 the annual flow of French inheritances from one generation to the next equalled a gigantic 20% of national income (far higher than it is today), meaning that a lot of people did not need to bother working at all in order to earn a living. Nonetheless, Condorcet looked at the matter in a different way to Mill and Marshall. He thought that we must respect the rights of people to pass on assets to their descendants as they see fit; it is their right. In his view, “we would not state that the laws on inheritance must aim for the greatest division and the greatest equality of wealth”. For him the only thing that needed tweaking, “as a consequence of natural rights”, was that a father’s property be divided equally among his children.
The law of unintended consequences
Condorcet’s strong support for free-market economics has not endeared him to all. Won’t leaving the market to “do its own thing” obviously lead to high inequality and great unhappiness for a great number of people? It is not for nothing that Charles Augustin Sainte-Beuve, a literary critic, referred to Condorcet as the “extreme product and as it were monstrous brain” of the “final school of the eighteenth century” with its “orgies of rationalism”.
But there is laissez-faire and laissez-faire. Condorcet’s version is more complex than that overused phrase implies. Condorcet is no anarcho-capitalist. Instead he believed that the state needed to provide the conditions under which free markets could operate most efficiently.
That may sound a bit abstract. Fortunately, there is a very concrete example that we can look at, an issue that Condorcet was obsessed with: famine. In 18th-century Europe governments were constantly preoccupied with ensuring that their populations had enough to eat. A poor harvest could spell disaster. At the time the received wisdom was as follows. During periods of scarcity governments should force producers to cut their prices. By cutting the price of food the poor would be able to eat. Jacques Necker, for instance, wrote a pamphlet in 1775 endorsing such policies, which he believed were in the interests of “compassion” for the people.
Condorcet had completely different ideas. In his Reflections on the Grain Trade, published in 1776, he argues that forcing producers to cut their prices would only discourage production in the future.4 If a farmer cannot make a profit on what he is producing, then why should he bother at all? Government interference with the grain market, according to Condorcet, is therefore unhelpful, indeed harmful in its unintended consequences. Famine is “the fruit of the very laws which are intended to prevent [it]”.
The only solution, as far as Condorcet is concerned, is complete and utter freedom of trade in food. Condorcet’s views corresponded closely with those of Adam Smith, who is known to have read Condorcet’s work–and possibly to have met him. But Condorcet was also echoing the words of the physiocrats writing in the decades before him. Like the physiocrats, Condorcet wanted France to have a strong, successful agricultural sector.
Some contend that this argument, rational though it is, lacks common humanity. With free trade in food, producers are perfectly entitled to export their products away from starving poor people towards rich folk who are willing and able to pay more. Some of Condorcet’s contemporaries did implicitly accept that “for the greater good” some people would die. Take the example of Louis Paul Abeille (1719–1807). If the government managed to resist the urge to intervene in grain markets, food prices would remain high, he reasoned. Producers would respond by planting more, and the area would eventually be flooded with grain. Problem solved. But Abeille recognised that some time would pass before suppliers could increase production to take advantage of the higher prices. You can’t grow food overnight. The implication of Abeille’s argument, which is explored in a lot of detail in a lecture by the philosopher Michel Foucault, is that people who could not afford grain should be allowed to die. Efficient economic management trumped humanitarianism.5
Was Condorcet quite so heartless? No. To believe that he was is to misunderstand his laissez-faireism. The very first sentence of his Reflections reads, “That all members of society should be assured subsistence each season, each year, and wherever they live… is the general interest of every nation.” His notion of rights appears once again. Condorcet was therefore an advocate of laissez-faire, but not quite in the way in which it might seem at first.
The best demonstration of this more complex approach is to look at how Condorcet’s friend, the physiocrat Anne Robert Jacques Turgot, behaved when he was put in charge of responding to an impending famine in the Limousin, a poor, sparsely populated area of southern France, in the late 1760s. Emma Rothschild provides a compelling, detailed account of what happened. Though it is not clear whether Turgot got his ideas from Condorcet, or the other way around, it is clear that they were pretty much in agreement on most things. Turgot, unlike Condorcet (or Adam Smith, for that matter), was able to put into practice the theory that he wrote about at such length. And Turgot’s response to the famine was quite different to what you might expect.
For one thing, Turgot clearly cared a great deal for the plight of the suffering people of the Limousin. He once sent his higher-ups a piece of local adulterated bread, to demonstrate to them just how bad the crisis had got. Nonetheless, he remained utterly committed to freedom of the corn trade, as Condorcet advised. At the height of the scarcity he insisted on legal protections to guarantee the freedom to transport and store corn.6
It sounds pretty heartless. At the same time, however, Turgot implemented a series of striking reforms. He did not want merely to give people food, which he viewed as encouraging them to be passive recipients, rather than active agents in their lives. He did not want to meddle in grain markets either. Instead, as David Williams argues, his ultimate objective was to put money in people’s pockets, so that they would have the means to buy food at market prices.7 He sought and received government support to pay for public works of all sorts, a measure that would create jobs. Rothschild shows that he also reduced taxes on the poor–and implemented emergency taxes on the rich. His policies seemed to work. Though the 1769 harvest had been the worst of the century, mortality rates increased little in 1770 and 1771, Rothschild points out.
Reflections on the trade in grains
Maximilien Robespierre remarked that Condorcet was “a great mathematician in the eyes of men of letters and a distinguished man of letters in the eyes of mathematicians”. That is harsh. But Condorcet remains a confusing figure. Today, he is best known for a mathematical conundrum, but that innovation formed a relatively small part of his overall schema of thought. To be sure, Condorcet loved the elegance and simplicity of mathematics. But there was more to life than equations. He believed strongly in the power of free markets, which he thought would allow humanity to reach a state of perfection. On the other hand, he saw plenty of examples where they needed to be managed. That puts him squarely in the ranks of the modern economists.