Margairaz Dominique (1986) “La formation du réseau des foires et des marchés : stratégies, pratiques et idéologie”, Annales. Histoire, Sciences Sociales, 1215-1242.
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). The question of supply and demand can be enriched by issues regarding space and the actors involved. The understanding in 18th 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 was an essential problem that policymakers of the time tackled 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
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 influence of the local lords and landowners). Markets according to Cantillon decreased transport costs and allowed a better allocation of goods. It increased the quantities of potential buyers and sellers (1217). Above all, it decreaseed information costs and thus favoured a better competition.
Cantillon also remarked that there ought to be a higher density of markets where the population is denser as it reflects greater resources (1218). Cantillon was also amongst the first one to highlight the importance of the merchants-entrepreneurs (packaging, transport, stocking, marketing), all the exchanges above the village level depended on them. Their work and the risks (i.e. uncertainty) ought to allow the merchants to gain from trade. They added value to their merchandise 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 remarked that 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 increased transportation costs (instead of going to the most practical marketplace, one had to go to the one the administration had picked), regulations led to an irrational organisation of the trade (some goods products couldn’t be sold in some places to maintain artificially the income of established merchants), 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 had to be the only force deciding when and where the merchants could trade (they needed enough consumers, and to be within a reasonable range of the production place, etc.). In turn, buyers seeking good prices will go where the merchants were (1222).
Turgot’s model was very thorough. It was based on a hierarchy of markets: the bigger ones sold more products, and a greater variety of good; their influence reached further geographically than the lesser ones. For Turgot, free trade alone ought to define how the environment was organized (1223).
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 had to be regulated by the government (1224). The consumer being poor, un-organized and entirely dependent on the producers’ and the merchants’ good will, they had to be protected. How could 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 any more, they bought directly from the producers. The lesser merchants and the consumers were the ones who attended fairs, which, in most cases, only dealt in regional agricultural goods. Overall, there were only about half a dozen of fairs of national importance. The rise of small local fairs and markets went along with a change of mentality amongst the peasants and artisans, they took conscience of the advantages of commercialisation and division of labour. This ideal of the market-oriented small producers equals amongst them and facing the commercial elite was to be very important during the Revolution (1227).
These new markets were necessarily located 3 to 4 miles away from the producers (otherwise transportation costs were too high), it allowed the direct ‘collision’ between producers and consumers (i.e. not mediated by a merchant) that Cantillon described as being the best way for both to get the best price. This radius was too small for most of the bigger village to be efficient, here laid the cause of the struggle between small landowners on the one hand and big landlords and merchants on the other; the two groups did not have the same conception of space: the latter needed a much less tight network of markets than the formers as they could transport their products away more easily (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 had 2 or 3,000 inhabitants (1230).
Margairaz considers these local economies as the direct cause of the development of the autarkic ideal of the sans-culottes (1232). Seasonal fairs where tools, cattle and groceries were available 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 was 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-sized villages with no other advantage than being close to the producers and the strengthening of the towns as commercial centres. The liberals had 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 was 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, but 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 (1237). This rationalisation of the commercial environment was the economic parallel to the administrative and political unification of France during the Revolution (1238).