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 FL Fairs and markets in 18th century France

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maharbbal
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Date d'inscription : 15/02/2007

MessageSujet: FL Fairs and markets in 18th century France   Mer 5 Mar - 23:52

Margairaz Dominique (1986) “La formation du réseau des foires et des marchés : stratégies, pratiques et idéologie”, Annales. Histoire, Sciences Sociales, 1215-1242.

Idea The whole article is available here.

Including space in the models developed by the economists is something relatively new. Each good, service and factor has its own geography which may have nothing to do with administrative frontiers. (1215) When the question of supply and demand is enriched by issues regarding space and the actors involved, trade studies become important. The understanding in18th century France (Gournay, Turgot, Necker) that failures of the demand or the supply can lead to catastrophes, triggered interest for trade (the liberty of the grain trade being one of the most important political battles of the 18th century in the kingdom). Space is an essential problem that policymakers of the time tackle by constructing roads, waterways and by redefining the administrative division of the French territory. (1216)

The transformation of the fairs and markets network in the 1760s is an excellent example of this attention to space-related issues. This redefinition of the commercial flows reflects the realities of production and consumption as well as the opposition of interests and ideas

Theory
Cantillon

Richard Cantillon was the first to both analyse the function of the village’s market and criticized the way they were granted by the administration (not on their objective qualities but depending on the might of the local’s lords and landowners). Markets according to Cantillon decrease transport costs and allow a good allocation of goods. It increases the quantities of potential buyers and sellers. (1217). Above all, it decrease information costs and thus favours a better competition.

Cantillon also remarks that there ought to be a higher density of markets where the population is denser as it reflects greater resources. The bigger village (called bourg) blessed with a market dominates the lesser ones that need the services it provides. (1218) Cantillon is also amongst the first one to highlight the importance of the merchants-entrepreneurs (packaging, transport, stocking, marketing), all the exchanges above the village level depend on them. Their work and the risks (i.e. uncertainty) ought to allow the merchants to gain from trade. They add value to their merchandize by bringing it to the consumer (this vision may seem mundane now, but was original then, as the merchant was often seen as a parasite). (1219)

Turgot
Turgot remarked that the states’ customs and privileges diverted most of the trade toward a few important cities. These customs and privileges hurt commerce in general but benefited a happy few. It increases transportation costs (instead of going to the most practical marketplace, one has to go to the main city), regulations led to an irrational organisation of the trade (some goods being forbidden to be sold in some place, etc.), it negatively affected consumers’ behaviours and limited the traders’ possibilities. (1220)

The results of the regulated system were polar opposites to what they were intended for: irregular supplies, high prices and limited the merchant’s profits. Mercantilist policies divided de facto France in hundreds of counties more or less autarkic (and as such fragile). (1221) The system favoured the consumer over the merchant but actually hurt both; for Turgot, all actors ought to be equals. Demand and supply ought to be the only one deciding when and where the merchants can trade (it need enough consumers, to be within a reasonable range of the production place, etc.). In turn, buyers seeking good prices will go where the merchants are. (1222)

Turgot’s model was very thorough. It predicted a hierarchy of the markets where, in order to limit transportation costs, the bigger a market, the more varied goods it would sell and the bigger the region it would control. For Turgot, free trade alone ought to define how the environment is organized. (1223)

Necker
Necker was a neo-Colbertist, as such for him everything was political. He saw the trade of the luxury, semi-luxury and manufactured goods as being the merchants’ business, but the trade of subsistence goods (grain) was too important to be left to them. As the general interest was at stake, the trade ought to be regulated by the government. (1224) The consumer being poor, un-organized and entirely dependent on the producers’ and the merchants’ good will ought to be protected. How can there be freedom when one of the two actors commands the other’s very life? Moreover free market tends to evolve into a monopoly or an oligopoly, which are dangerous for the consumer and the producer. (1225)

It is the state’s role to make sure that the merchants don’t disturb the direct relationship between producers and consumers. The territory should thus be covered with small markets where the consumers could meet the small landowners and tenants so as to settle on the most equitable price possible. But this of course goes against the other aim of the neo-Colbertists: increasing the number of manufactures, which would increase the density in some places and thus limit the possibilities of direct meeting between local producers and the consumers. (1226)

How did it actually work?
By the end of the Old Regime, most of the important merchants were not attending fairs no more, they bought directly from the producers. The lesser merchants and the consumers were the ones who attended fairs, which, for most of them, only dealt in regional agricultural goods anyway. Overall, there are only about half a dozen of fairs of national importance. The rise of small local fairs and markets goes along with a change of mentality amongst the peasants and artisans, they take conscience of the advantages of commercialisation and division of labour. This ideal of the market-oriented small producers was to be very important during the Revolution. (1227)

These new markets are necessarily located 3 to 4 miles away from the producers (otherwise transportation costs are too high), it allows the collision between producer and consumer that Cantillon described as being the best way for both to get the best price. This radius is too small for most of the bigger village to be efficient, here lays a struggle between small landowners one the one hand and big landlords and merchants on the other; the two groups don’t have the same conception of space: the latters need a much less tight network of markets than the formers.(1228)

The rise of a network
For the lesser producers, a close-by market was the only way to meet other buyers than the big merchants and thus to enjoy the fruits of competition. Markets were to happen twice or thrice a month or seasonally to provide the instruments of trade (before the harvest for instance). But these small markets were only rarely a mean to open the local economy to the regional or national one. Most of the time, the market allowed the allocation of resources within the county but not beyond. The rise to power of the small producers came at the expense of integration of the various local economies to a larger market, and there was little redistribution between the centres and the peripheries. (1229)

This movement shows the lack of trust between the producers and their partners in charge of distributing their products. The rise of the rural proto-industry provided potential local consumers to the lesser markets; the consumers too were keen on breaking the monopoly of the merchants. On average these counties demanding new markets have 2 or 3,000 inhabitants. (1230)

Margairaz sees the development of autarkic rational sans-culotte environment. Fair also allow consumers to avoid the monopoly of the grocers who used to provide overpriced, low quality consumer goods. (1232) This type of fairs either did not have a large range (the equivalent of a few local economies at most, i.e 20 to 30 km radius). They had to be held every week or so, as a result, most of the retailers actually owned a full-time shop in a nearby town which is usually the centre of this provincial economy. (1233)

Conclusion: what changed?
The second half of the 18th century saw a multiplication of the lesser fairs in medium-size villages with no other advantage (administrative for instance) than being close to the producers and the strengthening of the towns as commercial centres. The liberals have managed to shake down the privileges of the ancient fairs, and the economic utility became the basic rational for the establishment of new fairs, their number is not restricted anymore to favour rent-seeking aristocrats. (1234) This liberal switch was to be complete with the Revolution but, based on the idea of general interest, the management of fairs (their creation mostly) was still centralised, thus preventing bottom-up movements.(1236) The administration mostly tried to enhance the performances of the fairs by rationalising their place and time. But, their scope was now strictly local or – at best – regional; by then the main urban merchants went directly to the producers. (1237) This rationalisation of the commercial environment was the economic parallel to the administrative and political unification of France during the Revolution. (1238)
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