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Chapter V


Jovellanos' Introduction to Economics

Jovellanos' interest in economics developed during his ten years in Seville and lasted throughout his lifetime, although in later years partially submerged in educational and political concerns. Economics, education, and politics were for him closely allied fields; the power of the modern state, he believed, depends to a large extent on its wealth (II, 38b), while the distribution of wealth within society affects the position of the social classes. Economics is, then, the science of government par excellence, the key to increased individual welfare and national prosperity (I, 313-15). This concept of economic science is analogous to that which Jovellanos' age held of the natural sciences: in economics, as in physics, certain «natural forces» and «laws» were to be discovered. Man could not change these laws, but he could benefit from them by adapting himself to them.

Although economics was ignored by the universities of his time, which continued to stress juridical and theological training, Jovellanos found in the Seville of Olavide a propitious climate for such study. Olavide himself was busy with economic questions, especially as superintendent of the ambitious development project in the Sierra Morena; and in his circle, the latest foreign and domestic books were read and discussed. In Seville Jovellanos must have first read the economic treatises of Richard Cantillon and Condillac, whom, until the mid-1780's, he considered the foremost authorities on the subject (II, 440). From then on, his economic thinking was increasingly influenced by English authors, particularly by Adam Smith. Jovellanos' familiarity with the principal Spanish economic writers must also date from the Seville period. The main works of Campomanes were published during this time, and we know from Jovellanos' correspondence with that author that he had read at least one of them before leaving for Madrid (II, 139). When an Economic Society was founded in Seville in 1775, Jovellanos was one of its first members (Ceán, p. 133); and both in this capacity and as a magistrate, he found himself engaged in economic studies and the preparation of reports on economic subjects.

The Economic Situation of Spain

The agrarian question occupied Spanish economists and politicians throughout the eighteenth century. In the midst of arguments about whether or not Spanish agriculture was in decline, there was a constant desire to expand production and to reduce the concentration of land ownership. Toward the middle of the century, the king, the nobles, and the Church held about four-fifths of all land; toward the end of the century the nobles and clergy, constituting about one twentieth of the population, owned some two-thirds of all arable land42. This situation created economic, political, and religious problems which the government attempted, with only partial success, to solve.

The state also sought to promote industrialization by establishing factories as «pilot projects», protecting nascent industries, encouraging the immigration of foreign artisans and technicians, and fostering the dissemination of scientific and technical information. The period as a whole was one of falling real wages, and the consequent profit inflation spurred industrial development while depressing the lot of the urban worker43. The declining guild system, condemned by economists of all schools and no longer favored by government, was unable to stop this trend. Commerce, in Spain as in other countries, was frequently hampered by restrictions. Some of these stemmed from a fear of scarcity of such vital products as grain; others reflected a mercantilist «fear of goods» and consequent desire to force exports and restrict imports. Some theorists considered trade economically unproductive and thought it would be socially useful to «eliminate the middleman». Others concentrated their attention on foreign trade, from which, through export surpluses, they hoped to obtain precious metals and thus assure the health and strength of the State. They believed that such exports supported the population at the expense of foreigners. These and other problems are dealt with in Jovellanos' economic writings.

Jovellanos' Report on the Agrarian Law

The outstanding expression of Jovellanos' economic principles is the Informe en el expediente de ley agraria (Report on the Agrarian Law) of 1795. Complaints, analyses, and suggested remedies concerning Spain's agrarian problem had found their way to the Council of Castile, the supreme governing body, which, at the suggestion of its counsel Campomanes, entrusted the expediente or dossier relating to agrarian reform to the Economic Society of Madrid, of which Campomanes was director. In order to aid the Society in the task of preparing a report and suggesting policy, an abstract of the various writings was printed in 1784; and by January of the following year the agricultural committee of the Society was at work on the project. Progress, however, was slow. In 1787 Jovellanos, one of the members of the committee, was asked to formulate a plan for a report; and the following year he was charged with writing the report. Each member of the committee submitted his views on the causes of the decadence of agriculture in Spain; and Jovellanos accepted, reconciled, or rejected the widely-differing opinions44. His report, though reflecting its preparation in the name of the Economic Society, was the work of Jovellanos alone. He did not submit it to the Society until April of 1794, after his «exile» in Gijón had given him additional leisure to work on it; and it was enthusiastically received by the Society, which published it the following year.

The economic principle on which Jovellanos bases his report is self-interest. Although laws must contain its excesses and constrain it within the bounds of justice, their chief aim must be to remove the impediments to self-interest, which normally is self regulating and which, when functioning properly, is the surest way to individual and collective well-being. Jovellanos distinguishes three classes of impediments to this proper functioning. The first and most important are obstacles created by legislation, and Jovellanos suggests remedies for them. Communally owned lands should be given over to private ownership and development. The laws prohibiting enclosure and otherwise limiting property rights to favor sheep raisers at the expense of agriculture should be repealed, so that farmers will improve cultivation in the assurance that wandering herds will not destroy their crops. In this way Jovellanos expects also to encourage settlement of farmers on the land, instead of their living in a village and cultivating distant fields. The benefits of such resettlement are not only economic:

An immense rural population spread out among the fields promises the state a people not only hard-working and rich, but also simple and virtuous. The tenant, living on his plot and free from the clash of the passions which agitate men when they are gathered in towns, will be farther removed from that ferment of corruption which, more or less actively, luxury always infuses in them. Gathered with his family in the scene of his labor, he can, on the one hand, pursue the only object of his interest without distraction, and, on the other, he will feel more forcefully drawn to it by the sentiments of love and tenderness natural to man in domestic society. Then we shall not only be able to expect from our farmers diligence, frugality, and the abundance born of these two, but conjugal, paternal, filial, and fraternal love will reign in their families; peace, charity, and hospitality will reign, and our tenants will possess those social and domestic virtues which make for the happiness of families and the true glory of states.

(II, 90a)                

Although he recognized that certain terrains and climates are more suitable for large-scale exploitation, Jovellanos cherished the ideal of the small self-sufficient farmer living close to the soil in virtuous simplicity and moderate well-being. What for many was a poetic theme was for him also an important consideration in economic policy.

The accumulation of property, the goal and result of the operation of self-interest, produces an undesirable inequality among men; but Jovellanos seeks the remedy for this evil in its cause: the desire of others to accumulate property, if allowed to exercise itself, will always redistribute property and thus prevent permanent gross inequalities (II, 98b). The law, however, interferes with this remedy by providing for cases in which property, once acquired, can never be sold. The concentration of ownership is thus progressive and irreversible. Negotiable land becomes scarcer and therefore more expensive. Although land ownership continues to bring prestige and is therefore desired, yields on capital thus invested fall, and improvements are discouraged. The number of landowners decreases and the proportion of tenants, already very high in some provinces, rises.

All of these are evils in Jovellanos' view, and he proceeds to attack them. He declares mortmain, the inalienable possession by ecclesiastical bodies, to be illegal in origin, even though subsequently sanctioned by legislation; and he blames the accumulation of land by the Church for the decline of Castile: «What has remained of that former glory but the skeletons of her cities, once populous and full of factories and workshops, of ware houses and stores, and today inhabited only by churches, convents, and hospitals, which survive the wretchedness they have caused?» (II, 100b). Jovellanos asks that further passage of land into mortmain be prohibited and that the clergy be encouraged voluntarily to dispose of their lands through sale or long-term leases.

Civil entails were even more widespread than mortmain, and Jovellanos considers them equally pernicious. The creator of a mayorazgo or entail in primogeniture, could establish the inalienability of his property for all time, perpetually favoring the eldest sons of his family and beggaring all other descendants. Jovellanos considers this system contrary to the laws of reason and nature. Property is, in his opinion, a natural right derived from man's right to his body and the labor of that body; but the right to transmit property by will is established not by natural but by positive law and therefore modifiable by it (II, 103b-4). Entails are not only unjust but socially harmful. Like mortmain, they restrict economic activity and accentuate inequality; and they increase the class of poor nobles who lack both the means to support their pretensions and the humility to acquire those means. The destitute and unproductive noble, useless to society, is a well-known figure in Spanish literature since the sixteenth-century picaresque novel Lazarillo de Tormes. Himself, however, a member of a noble family, Jovellanos understands that great wealth allows his class to play its role of disinterested service in the monarchic state (II, 105b, 291); and for this reason, and in recognition of the limits of the possible, he temporizes with entails, suggesting that some degree of alienation should be allowed and that further entail of land should only be permitted as a reward for very special merits.

Turning to other legal obstacles to the development of agriculture, Jovellanos condemns such restraints on trade as price controls. He believes that only competition can produce the cheapness and abundance which these measures seek to achieve. They reflect foolish prejudices against merchants and, while trying to limit or prevent their profits, interfere with the division of labor which for Jovellanos, as for Adam Smith, is one of the principal sources of wealth. Division of labor also applies to entire provinces; and to constrain trade between agricultural and industrial provinces is to reduce the productivity of both, since production will adjust itself to consumption. Many restraints were intended to prevent scarcity of grains or monopoly of grain supplies; but Jovellanos argues that such measures will, by restricting the market, produce the evils they seek to avoid (II, 108-13).

These arguments also apply, up to a point, to foreign trade. Jovellanos decries the mercantilistic policy of prohibiting exports of raw materials in order to force their elaboration at home and cheaply supply domestic industry. Such measures unfairly sacrifice agriculture to manufacturing and are furthermore self-defeating, since a restricted market will decrease production (ibid.). Only with respect to grain exports does Jovellanos depart from this line. Noting the vital necessity of grain and the importance of psychological factors in grain prices, he argues that the permission to export encourages fear of scarcity and high prices. Since, furthermore, there is as yet no proof of the existence of an exportable surplus, Jovellanos urges that export prohibitions be maintained at least provisionally (II, 114-17). Grain was, of course, the basic food of the masses of the people; and grain prices were thought to affect wages and, consequently, the price of manufactured goods. Any increase in grain prices, let alone a famine, was an evil to be avoided. This explains Jovellanos' deviation from his principles, though it does not strengthen his logic. Ultimately all prices are affected by psychological factors and by estimates of supply and demand (as opposed to the facts of supply and demand); and if restriction of the market depresses production of other items, including domestically-traded grain, the same should hold true with regard to foreign trade in grain. In fact, Jovellanos hesitated before he took his public position, which seems to owe something to the writings of the Swiss economist Jacques Necker; and he later disavowed privately what he had written in the name of the Economic Society45.

Jovellanos also urges reform of tax legislation. He argues that sales taxes in particular are regressive and hamper trade. They are offensive when levied on capital (e. g., land) whose product, when sold, will also be taxed; and they are particularly unfair because the wealthiest landowners, whose lands are amortized and thus cannot be sold, are exempt from them (II, 118b-19a).

The second class of obstacles to the development of agriculture includes erroneous opinions and ignorance. Although agriculture, Jovellanos maintains, is the chief source of prosperity and of moral and physical well-being, public policy has consistently neglected it in favor of commerce. The peasant, furthermore, has traditionally borne the main burden of taxes and personal services. To remedy these conditions Jovellanos urges the wider study of economics, in the belief that understanding will bring improvement. Outside the universities, from which, like other reformers, he expected little, Jovellanos wished to establish institutes in which the landowning classes could acquire practical knowledge that would help them to improve their management of the land. Peasants, with the assistance of the clergy and the Economic Societies, should also be educated, first to read and write, and then to improve their methods of cultivation by study of simple technical manuals (II, 124-26).

Natural obstacles to agricultural development constitute Jovellanos' third class and include lack of irrigation, of roads, of river and canal communications, and of improved seaports. Jovellanos urges the government to allot regularly to public works the money wasted on wars and useless ornamentation, proceeds from the sale of public lands, the labor of troops and local citizens, and the revenue from taxes (II, 132 ff.). Such taxes, Jovellanos declares, should be imposed on all citizens, and in proportion to their ability to pay-standards which seem modern enough until we note the author's preference for the salt tax, a perfectly regressive tax on consumption (II, 133a). In more general terms, Jovellanos asks that the quality of rural life be improved by decreasing useless and oppressive regimentation of the peasantry and allowing them to live more freely and more happily (II, 134b-35a).

The Report on the Agrarian Law was published in 1795 with the support of Godoy, whose government, hard pressed for revenues, hoped to impose new taxes on amortized lands (Herr, pp. 380 ff.). The Inquisition, however, also took notice of the work. Denunciation was followed by investigation, and the Inquisition's censors condemned Jovellanos' opinions on the property rights of the Church and saw dangerous egalitarian tendencies in his hostility toward entails. The inquisitorial process was ordered suspended in July, 1797, perhaps because of Jovellanos' rise in the favor of Godoy; and when Jovellanos began his ministry, he was entrusted with organizing the sale of the property of charitable institutions46. The years following the publication of the Report saw it translated into English, French, and German; and it has been repeatedly republished in Spain, notably in 1820, when a fuller and more accurate version than that of 1795 appeared. In 1812 the cortes, or parliament, recommended its study. Such marks of esteem, however, did not save the work from being placed on the Index of Forbidden Books in 1825 and remaining there for a hundred years. Many of Jovellanos' proposals were not put into practice until the nineteenth century.


The foundations of Jovellanos' economics are three interrelated principles: private property rights, self-interest, and liberty. Like St. Thomas Aquinas and the Irish philosopher Francis Hutcheson, whom he admired and who was Adam Smith's teacher, Jovellanos conceives of property rights as grounded in natural law but modified by society47. Justified by their social usefulness, their exercise can be regulated by society in order to further this aim. Jovellanos here occupies the middle ground between those who, like Locke, Smith, and Condillac, see property as a natural right independent of society and one which governments are instituted to safeguard, and those who would derive all property rights from the State. The latter group includes Grotius, Hobbes, Montesquieu, and Rousseau. For Jovellanos, as for Adam Smith, property rights originate in every man's right to the labor of his own body; the sanctity of this labor sanctifies the fruits of labor and establishes man's most basic property right, the right to work48.

Jovellanos deals with this topic most explicitly in his Informe sobre el libre ejercicio de las artes (Report on the Free Exercise of Crafts), 1785, II, 33-45, where, like most economists of his time, he attacks labor guilds. It was alleged that restrictive guild practices raised wages and therefore prices -an argument which, at least for Spain, is belied by the sharp decline in real wages (about 20% increase of money wages, as against a doubling of prices) in the second half of the eighteenth century (Hamilton, pp. 208, 214, 215, 220). Jovellanos, like Campomanes, also favored the development of cottage industries and accused the guilds of concentrating manufactures in the large cities. He further believed that they resisted innovation and the division of labor. Finally, guilds, by interfering with free contracts between employee and employer, restricted the former's rights in his labor.

Jovellanos' proposals -the abolition of guilds and their replacement with government-sponsored craft registers and advisers from the Economic Societies- draw heavily on Campomanes49. In effect, they replace guild controls with governmental controls, eliminating a pocket of autonomy unwelcome to the centralism of Enlightened Despotism; but the freedom and welfare of the laborer are not necessarily advanced by this change. Furthermore, the freedom of contract between employee and employer depends on equality between the contracting parties. Jovellanos and his contemporaries, in all good faith, failed to recognize the bargaining advantage which the abolition of guilds would give to employers. The fall of real wages shows that the decline of the guilds was accompanied by a lowering of labor's standard of living, even though employment may also have become more widespread.


Property is important to Jovellanos because he believes, like Adam Smith, that the desire to acquire it, that is, the «pursuit of happiness», if freely exercised within the bounds of justice, is the surest way to the prosperity of the individual; and since society consists of individuals, collective prosperity will be augmented as individuals flourish (I, 264b; II, 88; IV, 230-32). He explains that an enlightened government

will recognize that in their self-interest men have a sufficiently powerful stimulus to seek their private well-being, and it will allow this self-interest to act freely. It will recognize that the public interest is inseparable from this individual interest, and therefore it will not trouble to promote the former by directing the latter. It will be vigilant, but not uneasy; and in place of this constant pressure and flux of laws and regulations, which instead of stimulating and guiding the operation of self-interest only hinder and discourage it, it will bestow on it only that watchful but passive protection which moves to check self-interest when it breaks the bounds of justice.

(IV, 198 a)                

This faith in the operation of self-interest was shared by most of the economists of Jovellanos' time, although they differed on whether this principle was powerful enough to overcome obstacles unaided, and whether its goodness was absolute. Adam Smith and Jovellanos both believed that no law can be more effective than a man's own interest in directing his economic activities toward his own welfare, and they therefore distrust both stimuli and impediments to this interest. This does not, however, mean that they favor untrammeled self-interest, since both recognize the existence of a public interest and of norms of justice which may need protection50. Both are concerned with the welfare of the individual, and particularly of the worker. «No society», writes Adam Smith, «can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, cloathed and lodged» (p. 79). Jovellanos similarly writes to Antonio Ponz:

I see, my friend, that there is much talk of public welfare and little of individual welfare; that we seek more peasants, and not food and clothing for these peasants; that we want many artisans and craftsmen, and that they should be content with a wretched wage. These ideas seem to me some what bizarre. They place the people, that is, the class which is most necessary and most worthy of care, in a miserable condition; they found the opulence of the rich on the misery of the poor and base the well-being of the State on the oppression of the members of that very State.

(II, 294)                

Shortly after the publication of the Report on the Agrarian Law, Jovellanos declares: «I [...] shall recognize no public prosperity that is not derived from and based on individual prosperity; and all talk of national power, riches, glory, and well-being will seem to me vain and dismal unless it represents individual portions of the goods to which we apply these names»51.

By way of contrast, mercantilists, much of whose thinking survives in such contemporaries of Jovellanos' as Campomanes, were primarily interested in strengthening the relative position of the State in the political competition with other States; and they normally considered the welfare of the individual only as a means to the ends of the State. How else can one explain their ideal of a low-wage economy producing abundant goods which are then exchanged for the silver and gold of foreigners?

Does self-interest produce the results which Jovellanos and others expected from it? Jovellanos overestimated the ease with which the factors of production can shift from one line of endeavor to another, and perhaps he failed to distinguish adequately between short-run interest and long-term interest. He recognized that for its perfect operation, self-interest should be perfectly enlightened, and that this was not the case; hence his insistence on the importance of education as an adjunct to economic development. And while he believed that even with these impediments the free exercise of self-interest, in the form of free competition, is its own best regulator, he occasionally called for legal interference with its operation. Thus he favored prohibiting the excessive subdivision of farms in his native Asturias, explaining that as long as law directed and controlled economic activity in general, it ought also to prevent farmers from creating, with the best of intentions, holdings so small as not to be viable (II, 291-93).


Jovellanos summed up his ideal economic program as libertad, luces y auxilios(«liberty, enlightenment, and assistance») II, 69b, 74b. By the last, he meant such public works as roads, ports, and canals. By luces he meant the education of all classes so that each individual might be able to discern his own true interest and be aided in pursuing it effectively. By liberty, Jovellanos meant that capital should be able to move without hindrance from one investment to another and be freely exploited, without such restraints as entail, prohibition of enclosure, etc.; that labor should be able to contract freely with employers for its services, without the restrictions of the guild system; and that trade should be free from oppressive taxation and from prohibitions and price controls. As early as 1774, and repeatedly thereafter, he argues that only freely determined market prices are just and that efforts to fix a «fair price» by law are necessarily either pointless (if they coincide with the market price) or unjust (if they violate the principle of liberty and force prices either up or down) II, 2-3, 53, 108-10, 473; V, 223b. Furthermore, artificially low prices, designed to insure a cheap and plentiful supply, will have results contrary to those intended: by depressing profits, they will curtail production. With regard to foreign trade, Jovellanos, while free of the mercantilists' obsession with a «favorable» balance of trade, vacillates between arguments for free trade and a moderately protectionist policy designed to encourage developing industries (II, 50-52, 72; V, 225a).

Wealth, Money, and Prices

In spite of occasional lapses, Jovellanos normally thinks of national wealth in terms of goods, with money being only a sign of value, not a value in itself (II, 443a). His economic proposals are therefore oriented toward increasing the domestic consumption of goods -in other words, the material well-being of the population- rather than toward the export surpluses dear to mercantilists. He likewise differs with mercantilism in his assessment of the role of commerce and manufactures. For Jovellanos, the most fruitful source of wealth is agriculture, in which the spontaneous productivity of nature is joined to that of labor and capital and which, through abundance of raw materials and cheapness of foodstuffs, makes possible the development of industry and trade (II, 120-21). Unlike the economists of the physiocratic school, however, Jovellanos does not consider agriculture the only source of wealth. In effect, he declares that all wealth springs from the application of labor to a product and that education, which improves and perfects this application, is therefore the ultimate source of wealth (V, 7-10).

Anticipating Fisher's equation, Jovellanos sees prices as the result of variations not only in the supply of money and the amount of goods, but also in the velocity of the circulation of money (II, 11). Insofar as money itself is a commodity, it has a price like any other, so that interest, long condemned by the Church, is neither evil nor fearsome for our author (II, 8a). We have already seen that Jovellanos discards the medieval concept of a «just» price.

The Significance of Jovellanos' Economic Writings

Jovellanos' private opinions were more «advanced» than those which he expressed in his public writings, and an examination of his doctrine must therefore be supplemented with study of his letters and diary. Concerning the Report on the Agrarian Law, he wrote a fellow member of the Economic Society of Madrid: «I might certainly have said more about amortization, entails, taxes, etc.; but you, who know how much must be overcome in order to accomplish anything in these matters, will perhaps think that I have rather overshot the mark. It is not enough to see one's goal; one must not lose sight of one's starting place» (IV, 189b-90a). In his diary, he promises to tell his friends «why I did not propose the absolute abolition of every kind of entail and amortization, which I consider necessary, why I blocked free grain exports, which I consider just, and other matters in keeping with the demands of these times» (D II, 149). This reticence stemmed in part from Jovellanos' «writing in the name of a body which would not then have adopted my ideas and which even now will not easily approve of them, and whose approbation is nevertheless important, not only to give them the weight of authority but also because only thus can they hope for public examination and some acceptance» (II, 367b). We have seen that even in this muted form, Jovellanos' ideas were too radical for some of his contemporaries.

Apart from its significance in the history of Spanish economic and political thought, the Report on the Agrarian Law is a masterpiece of systematic exposition, developing specific proposals from explicitly stated principles with that geometric clarity so dear to the eighteenth century. Though remarkably free of the aridity of technical jargon, as comparison with the writings of Campomanes will show, it gives literary status to an abundance of technical and regional terms, proving that they are not incompatible with elegant prose52. As had some of his verses, Jovellanos' Report foreshadows the linguistic emancipation which accompanied the Romantic revolution.

Jovellanos' economic writings were responses to specific practical problems; and they sought solutions which, within the realm of the feasible, would come as close as possible to the desirable. In dealing with questions which had concerned other Spanish writers for more than a century, Jovellanos naturally followed, at least in part, in their footsteps; but he was not afraid to develop new ideas and to make use of the latest economic thinking. Thus he came to advance beyond the relatively liberal mercantilism of Campomanes and, especially after he discovered Adam Smith's Wealth of Nations, which he read several times, to move ever more in the direction of classical liberalism. Like Smith, he stressed the basic importance of agriculture in the national economy while also recognizing the productive role of manufactures and commerce. Jovellanos, like Smith, was eclectic and pragmatic, applying principles to specific cases.

Jovellanos' economic thought cannot be divorced from social and political considerations. His agrarian proposals would build a rural middle class of independent small farmers at the expense of the grazing interests, the nobles, and the Church. They would produce a less rigidly stratified society and at the same time strengthen the State by weakening the upper classes. His other economic writings envisage a similar growth of an urban middle class of manufacturers and merchants, freed from the restraints and stigmas of a feudal order. Jovellanos was neither irreligious nor egalitarian; but he thought of both Church and nobility as functional members of society, subject to the control of the State and not entitled to any privileges that did not contribute to their social usefulness. The abolition of legal restraints and the resulting growth of industry and trade would, he believed, improve the lot of the working class, providing more jobs and a larger share in an increased national wealth. Jovellanos' works bear witness to his conviction that economic progress depends on educational progress and is, in turn, only a means to social, political, and humanitarian goals.

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