Claude Frédéric Bastiat (June 30, 1801–December 24, 1850) was a French classical liberal theorist, political economist, and member of the French assembly.
Bastiat was born in Bayonne, Aquitaine, France. When he was nine years old, he was orphaned and became a ward of his father's parents. At age seventeen he left school to become more involved with his family's business as an exporter. Economist Thomas DiLorenzo suggests that this family business experience was crucial to Bastiat's later work because it allowed young Frédéric to acquire first-hand knowledge of some of the effects of trade regulations on the market. Sheldon Richman notes that "he came of age during the Napoleonic wars, with their extensive government intervention in economic affairs."
When Bastiat was twenty-five, his grandfather and benefactor died, leaving the young man his family estate and providing him with the means to further his own theoretical inquiries. His areas of intellectual interest were diverse, including "philosophy, history, politics, religion, travel, poetry, political economy, [and] biography."
His public career as an economist began only in 1844, and was cut short by his untimely death in 1850. Bastiat had contracted tuberculosis, probably during his tours throughout France to promote libertarian ideas, and that illness eventually prevented him from making further speeches (particularly at the legislative assembly to which he was elected in 1848 and 1849) and took his life. Frédéric Bastiat died in Rome on December 24, 1850. He declared on his death bed that his friend Gustave de Molinari (publisher of Bastiat's masterpiece The Law in 1849) was his spiritual heir.
Bastiat can be said to be of the "Harmonic" school of libertarians, who consider utilitarian and natural law arguments as two complementary aspects of a same world. Bastiat did not take part in the anarchist-minarchist debate (he arguably died too early for that); he seems to have considered the State as something inevitable as far as immediate practical matter—something that ought to be taken into account as long as it existed. However, like all classical liberals, Bastiat maintained a deep distrust of all government, in any form, and worked all his life to demonstrate that government control of private individuals and regulation of private industry is inefficient, economically damaging, and morally wrong.
Because of his stress on the role of consumer demand in initiating economic progress, Bastiat has been described by Mark Thornton, Thomas DiLorenzo, and other economists as a forerunner of the Austrian School. In his Economic Harmonies, Bastiat states that,
Thornton posits that Bastiat, through taking this position on the motivations of human action, demonstrates a pronounced "Austrian flavor."
One of Bastiat's most important contributions to the field of economics was his admonition to the effect that good economic decisions can only be made by taking into account the "full picture." That is, economic truths should be arrived at by observing not only the immediate consequences—that is, benefits or liabilities—of an economic decision, but also by examining the long-term consequences. Additionally, one must examine the decision's effect not only on a single group of people (say candlemakers) or a single industry (say candles), but on all people and all industries in the society as a whole. As Bastiat famously put it: an economist must take into account both "What is Seen and What is Not Seen." Bastiat's "rule" was later expounded by Henry Hazlitt in his work Economics in One Lesson, in which Hazlitt borrowed Bastiat's trenchant "Broken Window Fallacy" and went on to demonstrate how it applies to a wide variety of economic falsehoods.
Bastiat was the author of many works on economics and political economy, generally characterized by their clear organization, forceful argument and acerbic wit. Among his most well known works is Economic Fallacies, which contains many trenchant attacks on statist (that is, "big government") policies. Bastiat wrote it while living in England in an attempt to advise the shapers of the French Republic on pitfalls to avoid.
Contained within Economic Fallacies is the famous satirical episode best known as the "Candlemakers' petition" pdf which presents itself as a demand from the candlemakers' guild to the French government, asking the government to block out the Sun to prevent its unfair competition with their products. Much like Jonathan Swift's A Modest Proposal or Benjamin Franklin's anti-slavery works, Bastiat's argument cleverly highlights the basic flaws in state-support of industry by demonstrating its absurdity when carried to a logical extreme.
Bastiat's most famous work, however, is undoubtedly The Law, originally published as a pamphlet in 1850. It deals with the issues underlying the development of a just and free system of laws, and how such laws should be applied in a free society.
A famous section of Economic Fallacies concerns the way that tariffs are inherently counterproductive. Bastiat posits a theoretical railway between Spain and France that is built in order to reduce the costs of trade between the two countries. This is achieved, of course, by making goods move to and from the two nations faster and more easily. Bastiat demonstrates that this situation benefits both countries' consumers because it reduces the cost of shipping goods, and therefore reduces the price at market for those goods.
However, each country's producers begin to rail at their governments because the other country's producers can now provide certain goods to the domestic market at reduced price. Domestic producers of these goods are afraid of being outcompeted by the newly viable industry from the other country. So, these domestic producers demand that tariffs be enacted to artificially raise the cost of the foreign goods back to their pre-railroad levels, so that they can continue to compete.
Bastiat raises two highly trenchant points here:
To further demonstrate his points, Bastiat suggests that, rather than enacting tariffs, the government should simply destroy the railroad anywhere that foreign goods can outcompete local goods. Since this would be just about everywhere, he goes on to suggest that that government should simply build a broken or "negative" railroad right from the start, and not waste time with tariffs and rail building. This is an example of Bastiat's consummate skill with the reductio ad absurdum rhetorical technique. Indeed, we can take Bastiat's argument even farther and see that, by examining everything from the perspective of the producer, society would be "best" if we were regressed to a cave-man state where supply of goods was at maximum scarcity. Then people would have to work as hard as possible for as little as possible and never have to fear outside competition.
In short, Bastiat proves two major points:
An important corrollary to these conclusions is that the power that consumers wield with any governing body, while theoretically tremendous, is extremely diffuse. Producers, on the other hand, while not as powerful on the whole as the sum total of consumers, have the ability to consolidate their power in ways that make it much more attractive for governing bodies to service their needs. Thus, while consumers could theoretically shut down an entire industry (or government) by refusing to buy/sell/do something, the likelihood of the great mass of people organizing in this way for any reason whatever is so infinitesimal as to be pratically impossible. Producers, on the other hand, are able to threaten or cajole the government with shutting down a single industry, with reductions in political and financial contributions to the government agents who make certain decisions, &c. It is for this reason that governments are much more likely to pander to the desires of producers than to consumers, and it is for this reason, Bastiat concludes, that governments are inherently adversarial to the interests of the people as a whole. Indeed, they are even adversarial, in some way, to the interests of the producers themselves, as the producers of one good or service are still consumers of all the other goods and services.
The following titles were originally published by the Foundation for Economic Education in Irvington-on-Hudson, NY, and are made available online by The Library of Economics and Liberty.