Frederic Bastiat

Frédéric Bastiat

Claude Frédéric Bastiat (June 30, 1801–December 24, 1850) was a French classical liberal theorist, political economist, and member of the French assembly.

Biography

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.^[1] Sheldon Richman notes that "he came of age during the Napoleonic wars, with their extensive government intervention in economic affairs."^[2]

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."^[1]

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.

Views

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^[1], and other economists as a forerunner of the Austrian School. In his Economic Harmonies, Bastiat states that,

We cannot doubt that self-interest is the mainspring of human nature. It must be clearly understood that this word is used here to designate a universal, incontestable fact, resulting from the nature of man, and not an adverse judgment, as would be the word selfishness.

Thornton posits that Bastiat, through taking this position on the motivations of human action, demonstrates a pronounced "Austrian flavor."^[3]

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.

Works

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.

Bastiat's Negative Railroad

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:

1. Even if the producers in a society are benefitted by these tariffs (which Bastiat goes on to prove that they are not), the consumers in that society are clearly hurt by the tariffs, as they are now unable to secure the goods they want at the low price they should be able to secure them at.
2. The tariffs completely negate any gains made by the railroad and therefore make it essentially pointless.

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:

1. All economic decisions should be made with the consumer in mind. (This is CENTRAL to Bastiat's ideas and to all laissez faire thought)
2. Tariffs serve no purpose but to negate the gains provided to society by technology, labor, ingenuity, determination and progress.

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.

Selected quotations

• "If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind?"—from The Law

• "When under the pretext of fraternity, the legal code imposes mutual sacrifices on the citizens, human nature is not thereby abrogated. Everyone will then direct his efforts toward contributing little to, and taking much from, the common fund of sacrifices. Now, is it the most unfortunate who gains from this struggle? Certainly not, but rather the most influential and calculating."—from The Law

• "Life, faculties, production—in other words, individuality, liberty, property—this is man. And in spite of the cunning of artful political leaders, these three gifts from God precede all human legislation, and are superior to it. Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place."—from The Law

• "But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime."—from The Law

• "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."—from Government

• "Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain."—from The Law

• "It seems to me that this is theoretically right, for whatever the question under discussion—whether religious, philosophical, political, or economic; whether it concerns prosperity, morality, equality, right, justice, progress, responsibility, cooperation, property, labor, trade, capital, wages, taxes, population, finance, or government—at whatever point on the scientific horizon I begin my researches, I invariably reach this one conclusion: The solution to the problems of human relationships is to be found in liberty."—from The Law

• "Try to imagine a regulation of labor imposed by force that is not a violation of liberty; a transfer of wealth imposed by force that is not a violation of property. If you cannot reconcile these contradictions, then you must conclude that the law cannot organize labor and industry without organizing injustice."—from The Law

See also

• Frédéric Bastiat's debate with Proudhon
• His parable of the broken window
• Physiocrats
• Liberalism
• Contributions to liberal theory

Notes

1. ^ ^a b c DiLorenzo, Thomas. "Frederic Bastiat (1801-1850): Between the French and Marginalist Revolutions." Mises.org.[1]
2. ^ Richman, Sheldon. "Frédéric Bastiat: An Annotated Bibliography." The Library of Economics and Liberty. 2000. [2]
3. ^ Thornton, Mark. "Frédéric Bastiat as an Austrian Economist." Mises.org. .PDF

Bastiat in English translation

• 1869 (1849). Capital and Interest. Translator unknown.

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.

• 1996 (1845). Economic Sophisms, trans. and ed. by Arthur Goddard, with introduction by Henry Hazlitt.
• 1995 (1848). Selected Essays on Political Economy, trans. by Seymour Cain; George B. de Huszar, ed., with introduction by Friedrich Hayek.
• 1995 (1850). The Law, trans. by Seymour Cain, with introduction by George B. de Huszar.
• 1998 (1850). [ The Law,] trans. by Dean Russell, with introduction by Walter E. Williams and foreword by Sheldon Richman.
• 1996 (1850). Economic Harmonies, trans. by W. Hayden Boyers; George B. de Huszar, ed., with introduction by Dean Russell.

References

• Sheldon Richman, 2000, "Annotated Bibliography," The Library of Economics and Liberty. Actually a biographical essay and an introduction to Bastiat's work.