ABSTRACT OF PAPER
Title: 'Equal Benefit in Exchange'. Readings of an error
Author: van den Berg Richard
For a short unfinished manuscript not apparently intended for publication by its author, Turgot’s ‘Value and Money’ (written in the late 1760s) has attracted an unusual amount of attention. Generally speaking, there have been two lines of interpretation of the theory of exchange outlined in ‘Value and Money’. On the one hand, the subjective, analytic approach adopted by Turgot has been interpreted in the light of neoclassical theories of exchange first formulated more than a century later. This interpretation focuses on the extent to which Turgot’s attempt reached analytically correct conclusions. It is generally accepted that the central conclusion he wanted to reach, namely that in a freely negotiated exchange both parties typically benefit equally is inadmissible. The alternative reading of ‘Value and Money’ interprets the text in the light in a tradition in Western thought about commercial exchange that goes back to antiquity. In this interpretation, the conclusion Turgot wanted to reach is seen as a novel elaboration of the old concept of commutative justice. The focus in this line of interpretation is not on the analytical correctness of the conclusion, but on the question in which respects Turgot’s conception of commutative justice differs from older ones. In this paper it is argued that Turgot’s likely intention was to give an economic analytical demonstration of the ‘automatic’ realisation under conditions of free exchange of a jurisprudentially desirable outcome. This interpretation is supported by a comparison with the very similar notion of equal benefit in exchange defended by his friend G.F. Le Trosne. A fresh look is taken at the two men’s positions in the debates on the liberalisation of trade and vis-à-vis the natural jurisprudence tradition to explain their particular idea of commutative justice. It is concluded that their attempt was not simply erroneous in several respects, it is also a significant case in long history of the complicated relation between economic analysis and jurisprudential reasoning.
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