Letters, Wheat, and Wealth: Rediscovering Ferdinando Galiani
Ferdinando Galiani was an 18th‑century Italian economist, diplomat, and cleric whose sharp mind and lively wit made him one of the most intriguing figures of the European Enlightenment. He is best remembered for his pioneering ideas on value, money, trade, and economic policy, which anticipated later developments in marginalism and historically grounded political economy.
Galiani was born on 2 December 1728 in Chieti, in the Kingdom of Naples, and received a classical education before taking religious orders, which earned him the title of abbé. His early intellectual talent attracted the attention of powerful patrons in Naples, including King Charles of Naples (later Charles III of Spain) and his minister Bernardo Tanucci, who helped launch his public career. As a young man, he quickly gained a reputation for combining solid scholarship with a playful, ironic style of expression that charmed many of the leading thinkers of his age.
His first major work, Della moneta (On Money), was written while he was still very young and published in 1750–51. In this book, he intervened in debates on reforming the Neapolitan economy, offering both concrete policy advice and a sophisticated analysis of money, value, and interest. Della moneta is often cited as the core of his theoretical contribution, because it contains his early statements on utility, scarcity, and time preference that would much later echo in marginalist and Austrian value and interest theory.
In 1759, Galiani was appointed secretary to the Neapolitan embassy in Paris, a post he held for a decade that placed him at the heart of Enlightenment intellectual life. In Paris, he befriended figures such as Diderot, Voltaire, Grimm, and Turgot and became known as a brilliant conversationalist whose letters later provided vivid portraits of the political and social climate of the time. It was during this Parisian period that he wrote his second great economic work, Dialogues sur le commerce des blés (Dialogues on the Grain Trade), published in French in 1770.
After returning to Naples around 1769, Galiani took on a series of high‑level administrative posts in the kingdom, including serving as a councillor of the tribunal of commerce and later as administrator of the royal domains. In these roles, he helped shape and implement economic policy, applying his theoretical insights to practical issues of taxation, trade, and public finance. He continued to write on a range of topics, including international law in his work on the duties of neutral princes, and maintained a dense network of correspondence until his death in Naples on 30 October 1787.
Galiani’s theory of value is central to his legacy. In Della moneta, he argued that the value of goods and money arises from their utility to individuals and their relative scarcity, rather than solely from the quantity of labor or metal they contain. This line of thought anticipates the marginal utility theories of the 19th century, leading later historians to regard him as a precursor of the marginalist and Italian utility traditions. He also developed an early version of a time‑preference theory of interest, suggesting that interest reflects people’s preference for present goods over future goods, a notion that foreshadows later work by Böhm‑Bawerk and others.
His ideas on money and monetary policy were equally advanced. Galiani saw money’s value as dependent on its purchasing power and on the trust and conventions of society, rather than on its mere metal content. He examined the effects of currency debasement, inflation, and changes in the money supply, warning that poorly managed monetary interventions could destabilize prices and social order. At the same time, he believed that well‑designed policy could mitigate economic shocks, especially in sensitive markets like grain, where sudden shortages directly threatened subsistence.
In the Dialogues on the Grain Trade, Galiani entered the French debate on free trade in grain and set himself against the more doctrinaire laissez‑faire of the Physiocrats. While he accepted that internal freedom of trade could stimulate efficiency and growth, he argued that foreign grain trade required more caution, because unrestricted exports could lead to domestic famine and political unrest. He emphasized that economic policy must respect the concrete constraints of time, place, and historical circumstance, and insisted that the needs of subsistence and social peace sometimes justify targeted regulation of grain exports and imports.
Galiani’s view of the relationship between agriculture and industry also departed from Physiocratic orthodoxy. Physiocratic orthodoxy refers to the main doctrines of the Physiocrats, a group of 18th-century French economists who believed that the true source of a nation’s wealth was agriculture and the productive power of land. They taught that only agricultural work created a net surplus, while manufacturing and trade were considered “sterile” and merely transformed value from one form to another without adding to it.
In contrast, Galiani argued that manufacturing offers increasing returns and fewer natural limits compared with agriculture, whose output is constrained by land. In his eyes, a flourishing industrial sector generates income, demand, and capital that feed back into agriculture, making industry a key engine of long‑term national wealth. This led him to favor policies that strengthened manufactures and trade as a complement to, rather than a mere consequence of, agricultural development.
A distinctive hallmark of Galiani’s thought is his insistence on historical and geographical relativity in economic policy. He maintained that even the best abstract models must be adapted to local conditions before they can guide real‑world decisions, a stance that anticipates later historical schools of economics. This did not make him hostile to theory; instead, he sought a balance between general principles and the particular needs of specific societies, especially in areas touching on basic welfare such as food and employment.
His moral and political reflections deepen this picture. Galiani linked economic freedom with personal liberty, arguing that voluntary exchange and respect for contracts are important safeguards against arbitrary power. Yet he also recognized that markets alone could not handle every crisis, and he believed that responsible governments must step in when unregulated markets threaten basic subsistence, public order, or international stability. This combination of respect for individual choice, sensitivity to institutional context, and willingness to use policy instruments makes his work both cautious and innovative by Enlightenment standards.
Beyond technical economics, Galiani’s letters and essays show a writer deeply engaged with literature, philosophy, and the arts. His correspondence with figures like Diderot, d’Épinay, and Turgot reveals a mind constantly probing the relationship between ideas, power, and everyday life in 18th‑century Europe. Because he wove humor and irony into his discussions of serious topics, contemporaries and later admirers praised him as one of the most refined and penetrating intellects of his century.
Taken together, Galiani’s life and work show an Enlightenment thinker who refused to separate theory from practice. His early formulations of utility and time preference, his nuanced approach to monetary and trade policy, and his insistence on historical context all contributed to a distinctive style of political economy that still attracts attention today. For anyone interested in how economics first grappled with questions of value, policy, and social order, Galiani remains an essential figure, if sometimes underappreciated.
