Political Economy

Jean Charles L onard de Sismondi (1773 - 1842), whose real name was Simonde, was a writer born at Geneva. He is best known for his works on French and Italian history, and his economic ideas. As an economist, Sismondi represented a humanitarian protest against the dominant orthodoxy of his time. In his first book, he followed Adam Smith; but in his principal subsequent economic work, Nouveaux principes d' conomie politique (1819), he insisted on the fact that economic science studied the means of increasing wealth too much, and the use of wealth for producing happiness, too little. Sismondi also contributed a great deal to economics with his thoughts on aggregate demand. Observing the capitalist industrial system in England, Sismondi saw that unchecked competition both resulted in producers all increasing individual production (because of lack of knowledge of other producers' production) this was then seen as forcing employers to cut prices, which they did by sacrificing workers' wages. This yielded overproduction and underconsumption; with most of England's workforce suffering from depressed wages, workers were then unable to afford the goods they had produced, and underconsumption of goods then followed. Sismondi believed that by increasing the wages of laborers they would have more buying power, be able to buy the national output and thus increase demand. In his book On Classical Economics, Thomas Sowell devotes a chapter to Sismondi, arguing that he was a neglected pioneer.