From Wicksell to Le Bourva: The éCompensation Thesis' in Monetary Theory
Starting from this reality, the present article opens the debate on the theoretical background of this central banking practices by going back beyond the well known Post-Keynesian heterodoxy. In our inquiry, we demonstrate that an horizontalist approach was already present in France in the writings of a French economist Jacques Le Bourva (1959). Despite the work of Lavoie (1992) to popularize Le Bourva monetary approach, his theory is quite unkown. However, we go beyond that by comparing his approach to that of Wicksell on whose shoulders Le Bourva seems to stand. In so doing, we fill in a missing link in the endogenous monetary theory history.
The goal of this article is twofold. First, it aims at demonstrating to what extent money is 'always and everywhere' an endogenous phenomenon. In this respect, the 'Le Bourva-Wicksell' wedding is worth considering. Second, the popularization of Le Bourva monetary theory adsd new elements to the French monetary theory of that time.
In this article we review, first, the articles published by Le Bourva (1959, 1962) in order to shed light on the history of the compensation thesis. Following this first part, which introduces the theory, we compare it with the ideas of Wicksell (1898) in the second part. In the third part we argue that to a substantial extent the current central bank policy has been foreshadowed by Le Bourva and Wicksell. As far as central banking theory is concerned, the article underlines to what extent the heterodox approach to monetary theory was already present in Le Bourva, even if there does not remain an echo in the Bank of France's corridors.