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Introduction

Richard Ebeling

The defense of economic liberty has never been an easy task. Adam Smith expressed his own despair at this problem in The Wealth of Nations. After presenting his powerful criticisms of mercantilism—the eighteenth-century system of government regulation and planning—he despondently suggested that free trade in Great Britain was as unlikely as the establishment of a utopia.

He said that two factors made the success of economic liberty unpromising. “Not only the prejudices of the public,” Smith said, “but what is much more unconquerable, the private interests of many individuals, irresistibly oppose it.”[1] By the prejudices of the public, Smith meant the apparent difficulty of many ordinary people to follow the often abstract and complex arguments of the economic theorist that demonstrate the superior workings of the free market over various forms of government intervention and control. And by the private interests of many individuals, Smith had in mind the wide variety of special interest groups that gain from, and would therefore always lobby hard to maintain, government regulations that limit or prevent open competition. In combination, Smith feared, these two factors would permanently prevent the logic of economic freedom from ever winning in the arenas of ideas and politics.

In the nineteenth century, however, there was one champion of freedom who mastered the art of making the complexities of economic reasoning understandable to the layman: the French classical-liberal economist Frederic Bastiat (1801–1850). More than one historian of economic thought has emphasized Bastiat’s special abilities in undermining the rationales for protectionism, socialism, and interventionism.

Sir Alexander Gray, for example, said that, “No one has ever been quite so skillful in making the case of his antagonist look extremely foolish. Even now his most ephemeral work remains a joy to read, by reason of its wit, its merciless satire and the neatness wherewith he pinks his opponents.”[2] Lewis Haney referred to Bastiat’s “pleasing and luminous style” and how, “brilliantly, with fable and irony, the masses are appealed to.”[3]

Eduard Heimann, a critic of the market economy, described him as, “A brilliant writer, [who] achieved world fame with his parable of the candle-makers, who petition for protection against the unfair competition of the sun in order that the community may become richer by the enrichment of their industry.”[4] Charles Gide and Charles Rist pointed out that “If modern Protectionists no longer speak of the ‘inundation of a country’ or of an ‘invasion of foreign goods’ . . . we too often forget that all this is due to the small but admirable pamphlets written by Bastiat . . . . No one could more scornfully show the laughable inconsistency of tunneling the mountains which divide countries, with a view to facilitating exchange, while at the same time setting up a customs barrier at each end.”[5] And even though Bastiat’s pen was sharp against the protectionist and collectivist ideas of his time, William Scott emphasized that the French liberal’s “attitude was calm and dignified and in spite of the incisiveness of his criticism he showed appreciation of the motives of his adversaries. He gave them full credit for a desire to promote the well-being of society, but wished simply to show that they were on the wrong path and, if possible, to set them right.”[6]

Those qualities led Joseph A. Schumpeter to call Bastiat “the most brilliant economic journalist who ever lived.”[7] And Ludwig von Mises praised him as a “brilliant stylist, so that the reading of his writings affords a quite genuine pleasure. . . . [H]is critique of all protectionist and related tendencies is even today unsurpassed. The protectionists and interventionists have not been able to advance a single word in pertinent and objective rejoinder.”[8]

Other authors have modeled some of their own works after him. At the beginning of the twentieth century, the French freemarket economist Yves Guyot said that his own little book, Economic Prejudices, was offered in the footsteps of Frederic Bastiat, with the purpose of “[setting] forth truths in a handy, convenient form that is easy to remember, to criticize errors by means of proof that any one can apply,” as Bastiat had done half a century earlier.[9] And surely the most famous and influential adaptation of Bastiat’s method and approach in the twentieth century was Henry Hazlitt’s Economics in One Lesson, in which the author said, “The present work may, in fact, be regarded as a modernization, extension and generalization of the approach found in Bastiat’s pamphlet,” known by the title “What Is Seen and What Is Not Seen.”[10]  

R  R  R  

Claude Frederic Bastiat was born on June 30, 1801 , in Bayonne , France , the son of a prominent merchant.[11] His mother died when he was seven years old, and his father passed away two years later, when Frederic was only nine. He was brought up by an aunt, who also saw to it that he went to the College of Sorèze beginning when he was 14. But at 17 he left without finishing the requirements for his degree and entered his uncle’s commercial firm in Bayonne . Shortly afterward he came across the writings of the French classical-liberal economist Jean-Baptiste Say, and they transformed his life and thinking.[12] He began a serious study of political economy and soon discovered the works of many of the other classical-liberal writers in France and Great Britain .

In 1825 he inherited a modest estate in Mugron from his grandfather and remained there until 1846, when he moved to Paris . During these 20 years Bastiat devoted almost all his time to absorbing a vast amount of literature on a wide variety of subjects, sharing books and ideas with his friend Félix Coudroy. It seems that Coudroy had socialist leanings, and Bastiat began to refine his skills in clear thinking and writing by formulating the arguments that finally won over his friend to a philosophy of freedom.

In the late 1820s and 1830s he began writing monographs and essays on a variety of economic topics. But his real reputation as a writer began in 1844, when he published a lengthy article in defense of free trade and then a monograph on Cobden and the League: The English Movement for Free Trade. While writing these works Bastiat began a correspondence with Richard Cobden, one of the primary leaders of the British Anti-Corn Law League, the association working for the repeal of all barriers to free trade. The two proponents of economic freedom became fast friends, supporting each other in the cause of liberty.

The success of these writings, and the inspiration from the success of Cobden’s free-trade activities in bringing about the end of agricultural protectionism in Great Britain in 1846, resulted in Bastiat’s moving to Paris to establish a French free-trade association and to start Le Libre Échange, a newspaper devoted to this cause.[13] For two years Bastiat labored to organize and propagandize for free trade. At first he was able to attract a variety of people in commerce and industry to support his activities, including delivering speeches, designing legislation for the repeal of French protectionism, and preparing writings to change public opinion. But it was to no avail. There were too many special interests benefiting from privileges and favors given by the government, and he was unable to arouse a sustained interest in his cause among the general public. It appeared that Adam Smith had been right in lamenting the prejudices of the public and the power of the interests, at least in France .

Following the revolution of February 1848, Bastiat began a career in politics, serving first in the French Constituent Assembly and then in the Legislative Assembly. Having devoted most of his previous writings to demonstrating the fallacies in the arguments for protectionism, Bastiat turned his attention to a new enemy of economic liberty: socialism. In the Legislative Assembly he delivered powerful speeches against public-works programs, guaranteed national-employment schemes, wealth redistribution proposals, nationalization of industry, and rationales for the expansion of bureaucratic controls over social and economic life. But because of a worsening tuberculosis that weakened his voice, he turned to the written word, producing a large number of essays detailing the absurdities in the arguments of the socialists.

Bastiat made his last appearance in the Assembly in February 1850. By spring of that year his health had declined so dramatically that he was forced to step down from his legislative responsibilities and spend the summer in the Pyrénées mountains in the south of France . He returned to Paris in September and visited his friends in the cause for free trade, before setting out for Italy in search of a cure for his tuberculosis. He died in Rome on December 24, 1850 , at the age of 49.

Frederic Bastiat’s intellectual legacy in the fight for economic freedom is contained in three volumes. Two of them are collections of some of his most biting, witty, and insightful essays and articles, and are available in English under the titles Economic Sophisms[14] and Selected Essays on Political Economy.[15] In his last years, Bastiat devoted part of his time to a general work of social philosophy and economic principles, published under the name Economic Harmonies.[16]

As Henry Hazlitt rightly emphasized, the central idea in much of Bastiat’s writings is captured in his essay “What Is Seen and What Is Not Seen,” which was the last piece he wrote before his death in 1850.[17] He points out that the short-run effects of any action or policy can often be quite different from its longer-run consequences, and that these more remote consequences in fact may be the opposite from what one had hoped for or originally planned.

Bastiat was able to apply the principle of the seen and the unseen to taxes and government jobs. When government taxes, what is seen are the workers employed and the results of their labor: a road, a bridge, or a canal. What is unseen are all the other things that would have been produced if the tax money had not been taken from individuals in the private sector and if the resources and labor employed by the government had been free to serve the desires of those private citizens. Government, Bastiat explained, produces nothing independent from the resources and labor it diverts from private uses.

This simple but profoundly important insight is the theoretical weapon through which Bastiat is able to demonstrate the errors and contradictions in the ideas of both protectionists and socialists. Thus in such essays as “Abundance and Scarcity,” “Obstacle and Cause,” and “Effort and Result,” he shows that barriers and prohibitions to freedom of trade only lead to poverty.[18]

He points out that each of us is both a consumer and a producer. To consume a good we must either make it ourselves or make some other good that we think someone else will take in exchange for the good we want. As consumers we desire as many goods as possible at the lowest possible prices. In other words, we want abundance. But as producers we want a scarcity of the goods we bring to market. In open competition, in which all exchanges are voluntary, the only way to “capture” customers and earn the income that enables each of us, in turn, to be a consumer is to offer better, cheaper, and more goods than our competitors. The alternative to this method, Bastiat warns, is for each of us as a producer to turn to the government to gain from our neighbors what we are unable to obtain through peaceful, nonviolent trade on the market.

Herein lies Bastiat’s famous distinction between illegal and legal plunder, which is at the center of his analysis in The Law.[19] The purpose of government, he says, is precisely to secure individuals in their rights to life, liberty, and property. Without such security men are reduced to a primitive life of fear and self-defense, with every neighbor a potential enemy ready to plunder what another has produced. If a government is strictly limited to protecting men’s rights, then peace prevails, and men can go about working to improve their lives, associating with their neighbors in a division of labor and exchange.

But government can also be turned against those whom it is meant to protect in their property. There can arise legal plunder, in which the powers of government are used by various individuals and groups to prevent rivals from competing, to restrict the domestic and foreign trading opportunities of other consumers in the society, and therefore to steal the wealth of one’s neighbors. This, Bastiat argues, is the origin and basis of protectionism, regulation, and redistributive taxation.

But the consequences of legal plunder are not only the political legitimizing of theft and the breakdown of morality through the blurring of the distinction between right and wrong—however crucially important and dangerous these may be for the long-term stability and well-being of society. Such policies also, by necessity, reduce the prosperity of the society.

Every trade protection, every domestic regulatory restriction, every redistributive act of taxation above that minimal amount necessary to secure the equal protection of each individual’s rights, Bastiat insisted, reduces production and competition in society. Scarcity replaces abundance. Limiting competition reduces the supply of goods available to all members of the society. Imposing protectionist barriers on foreign trade or domestic regulations on production decreases the general availability of goods and makes them more expensive. Everyone is, in the end, made worse off. And thus Bastiat reached his famous conclusion that the state is the great fiction through which everyone tries to live at the expense of everyone else.

Why does legal plunder come about? Bastiat saw its origin in two sources. First, as we have just seen, some people see it as an easier means of acquiring wealth than through work and production. They use political power to redistribute from others what they are unwilling or unable to obtain from their neighbors through the voluntary exchanges of the marketplace. One basis for legal plunder, in other words, is the misguided spirit of theft.

The second, and far more dangerous, source of legal plunder is the arrogant mentality of the social engineer. Through the ages, Bastiat showed, social and political philosophers have viewed the multitude of humanity as passive matter, similar to clay, waiting to be molded and shaped, arranged and moved about according to the design of an intellectually superior elite.

With a timeless relevance, Bastiat points out that the political elite praises the ideal of democracy, under which “the people” select those who will hold political office. But once the electoral process is finished, those elected to high political office arrogate to themselves the planning, directing, and controlling of every aspect of social and economic life. The task of modern democracy, apparently, is to periodically appoint those who shall be our societal dictators.

Is this the way men have to live? Was illegal and legal plunder the only form of social existence? Bastiat answered no. In Economic Harmonies he tried to explain the nature and logic of a system of peaceful human association through production and trade. Historians of economic thought and other critics of Bastiat have said this work demonstrates that, despite his brilliant journalistic talents, he failed as a serious economic theorist. They point to his use of a form of a labor theory of value or his faulty theory of savings, capital, and interest.[20]

But beyond these errors and limitations is an aspect of Economic Harmonies that still makes it insightful. Harmonies attempts to offer a grand vision of the causal relationships among work, the division of labor, voluntary exchange, and mutual improvement of men’s condition, as well as the importance of private property, individual freedom, and domestic and foreign free trade. In freedom there is social harmony, since each man sees his neighbor not as an enemy but as a partner in the ongoing processes of human improvement. Where relationships are based on consent and mutual agreement there can be no plunder, only reinforcing prosperity, as each works to trade with his neighbors and acquire all the things that make life better for each and all.

If one looks at the period during which Bastiat devoted his efforts to fight for freedom and free trade, the conclusion would appear to be that his life ended in failure. Both during his lifetime and following his death France remained in the grip of the protectionist and interventionist spirit, never achieving the degree of economic liberty enjoyed in Great Britain through the second half of the nineteenth century.

And yet Bastiat’s life should be seen as a glorious success. For the 150 years since his passing, each new generation of advocates of economic liberty has been inspired by his writings. His fables and essays read as fresh as if they were written yesterday, because they address the underlying nature of human association and the dangers from political encroachment on the social and market orders.  

1. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book Four, chapter two (New York: Modern Library, 1937 [1776]), pp. 437–38.

2. Sir Alexander Gray, The Development of Economic Doctrine: An Introductory Survey (London: Longmans, Green, 1931), pp. 244–45.

3. Lewis H. Haney, History of Economic Thought (New York: Macmillan, 1936), pp. 331–32.

4. Eduard Heimann, History of Economic Doctrines: An Introduction to Economic Theory (London: Oxford University Press, 1945), p. 124.

5. Charles Gide and Charles Rist, A History of Economic Doctrines, From the Time of the Physiocrats to the Present Day (Boston: D.C. Heath, 1915), pp. 329–30.

6. William A. Scott, The Development of Economics (New York: The Century Co., 1933), p. 244.

7. Joseph A. Schumpeter, History of Economic Analysis (New York: Oxford University Press, 1954), p. 500.

8. Ludwig von Mises, Liberalism: The Classical Tradition (Irvington-on- Hudson, N.Y.: Foundation for Economic Education, 1996 [1927]), p. 197.

9. Yves Guyot, Economic Prejudices (London: Swan Sonnenschein, 1910), p. v.

10. Henry Hazlitt, Economics in One Lesson (New York: Harper & Brothers, 1946).

11. The following brief summary of Bastiat’s life and professional activities is drawn primarily from Dean Russell, Frédéric Bastiat: Ideas and Influence (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1965); also Dean Russell, Frédéric Bastiat and the Free Trade Movement in France and England, 1840–1850 (Geneva: Imprimarie Albert Kundig, 1959); and George C. Roche, Frederic Bastiat: A Man Alone (Hillsdale, Mich.: Hillsdale College Press, 1977).

12. Jean-Baptiste Say, A Treatise on Political Economy, or the Production, Distribution and Consumption of Wealth [1921] (N.Y.: Augustus M. Kelley, 1971); Say, Letters to Mr. Malthus on Several Subjects of Political Economy [1821] (N.Y.: Augustus M. Kelley, 1967); and R. R. Palmer, ed., J.-B. Say: An Economist in Troubled Times (Princeton, N.J.: Princeton University Press, 1997).

13. For a brief account of the free-trade movement in Great Britain and its triumph in the middle of the nineteenth century, see Richard M. Ebeling, Austrian Economics and the Political Economy of Freedom (Northampton, Mass.: Edward Elgar, 2005), ch. 10: “The Global Economy and Classical Liberalism: Past, Present and Future,” pp. 247–281, and especially pp. 248–252.

14. Economic Sophisms, trans. and ed. Arthur Goddard, with introduction by Henry Hazlitt (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1996 [1845]).

15. Selected Essays on Political Economy, trans. Seymour Cain, ed. George B. de Huszar, with introduction by F. A. Hayek (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1995 [1964]).

16. Economic Harmonies, trans. W. Hayden Boyers, ed. George B. de Huszar, with introduction by Dean Russell (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1996 [1850]).

17. In Selected Essays, pp. 1–50.

18. Economic Sophisms, pp. 7–27.

19. “The Law,” in Selected Essays, pp. 51–96; and, “The Physiology of Plunder,” in Economic Sophisms, pp. 129–46.

20. See, for example, Eugen von Böhm-Bawerk, Capital and Interest, vol. 1: History and Critique of Interest Theories (South Holland, Ill.: Libertarian Press, 1959), pp. 191–94.

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The Law  

The law perverted! And the police powers of the state perverted along with it! The law, I say, not only turned from its proper purpose but made to follow an entirely contrary purpose! The law become the weapon of every kind of greed! Instead of checking crime, the law itself guilty of the evils it is supposed to punish!

If this is true, it is a serious fact, and moral duty requires me to call the attention of my fellow-citizens to it.  

Life Is a Gift from God   

We hold from God the gift which includes all others. This gift is life—physical, intellectual, and moral life.

But life cannot maintain itself alone. The Creator of life has entrusted us with the responsibility of preserving, developing, and perfecting it. In order that we may accomplish this, He has provided us with a collection of marvelous faculties. And He has put us in the midst of a variety of natural resources. By the application of our faculties to these natural resources we convert them into products, and use them. This process is necessary in order that life may run its appointed course.

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.  

What Is Law?  

What, then, is law? It is the collective organization of the individual right to lawful defense. Each of us has a natural right—from God—to defend his person, his liberty, and his property. These are the three basic requirements of life, and the preservation of any one of them is completely dependent upon the preservation of the other two. For what are our faculties but the extension of our individuality? And what is property but an extension of our faculties? If every person has the right to defend—even by force—his person, his liberty, and his property, then it follows that a group of men have the right to organize and support a common force to protect these rights constantly. Thus the principle of collective right—its reason for existing, its lawfulness—is based on individual right. And the common force that protects this collective right cannot logically have any other purpose or any other mission than that for which it acts as a substitute. Thus, since an individual cannot lawfully use force against the person, liberty, or property of another individual, then the common force—for the same reason—cannot lawfully be used to destroy the person, liberty, or property of individuals or groups. Such a perversion of force would be, in both cases, contrary to our premise. Force has been given to us to defend our own individual rights. Who will dare to say that force has been given to us to destroy the equal rights of our brothers? Since no individual acting separately can lawfully use force to destroy the rights of others, does it not logically follow that the same principle also applies to the common force that is nothing more than the organized combination of the individual forces? If this is true, then nothing can be more evident than this: The law is the organization of the natural right of lawful defense. It is the substitution of a common force for individual forces. And this common force is to do only what the individual forces have a natural and lawful right to do: to protect persons, liberties, and properties; to maintain the right of each, and to cause justice to reign over us all.  

A Just and Enduring Government  

If a nation were founded on this basis, it seems to me that order would prevail among the people, in thought as well as in deed. It seems to me that such a nation would have the most simple, easy to accept, economical, limited, non-oppressive, just, and enduring government imaginable—whatever its political form might be.

Under such an administration, everyone would understand that he possessed all the privileges as well as all the responsibilities of his existence. No one would have any argument with government, provided that his person was respected, his labor was free, and the fruits of his labor were protected against all unjust attack. When successful, we would not have to thank the state for our success. And, conversely, when unsuccessful, we would no more think of blaming the state for our misfortune than would the farmers blame the state because of hail or frost. The state would be felt only by the invaluable blessings of safety provided by this concept of government.

It can be further stated that, thanks to the non-intervention of the state in private affairs, our wants and their satisfactions would develop themselves in a logical manner. We would not see poor families seeking literary instruction before they have bread. We would not see cities populated at the expense of rural districts, nor rural districts at the expense of cities. We would not see the great displacements of capital, labor, and population that are caused by legislative decisions.

The sources of our existence are made uncertain and precarious by these state-created displacements. And, furthermore, these acts burden the government with increased responsibilities.  

The Complete Perversion of the Law  

But, unfortunately, law by no means confines itself to its proper functions. And when it has exceeded its proper functions, it has not done so merely in some inconsequential and debatable matters. The law has gone further than this; it has acted in direct opposition to its own purpose. The law has been used to destroy its own objective: It has been applied to annihilating the justice that it was supposed to maintain; to limiting and destroying rights which its real purpose was to respect. The law has placed the collective force at the disposal of the unscrupulous who wish, without risk, to exploit the person, liberty, and property of others. It has converted plunder into a right, in order to protect plunder. And it has converted lawful defense into a crime, in order to punish lawful defense.

How has this perversion of the law been accomplished? And what have been the results?

The law has been perverted by the influence of two entirely different causes: stupid greed and false philanthropy. Let us speak of the first.  

A Fatal Tendency of Mankind  

Self-preservation and self-development are common aspirations among all people. And if everyone enjoyed the unrestricted use of his faculties and the free disposition of the fruits of his labor, social progress would be ceaseless, uninterrupted, and unfailing.

But there is also another tendency that is common among people. When they can, they wish to live and prosper at the expense of others. This is no rash accusation. Nor does it come from a gloomy and uncharitable spirit. The annals of history bear witness to the truth of it: the incessant wars, mass migrations, religious persecutions, universal slavery, dishonesty in commerce, and monopolies. This fatal desire has its origin in the very nature of man—in that primitive, universal, and insuppressible instinct that impels him to satisfy his desires with the least possible pain.  

Property and Plunder  

Man can live and satisfy his wants only by ceaseless labor; by the ceaseless application of his faculties to natural resources. This process is the origin of property.

But it is also true that a man may live and satisfy his wants by seizing and consuming the products of the labor of others. This process is the origin of plunder.

Now since man is naturally inclined to avoid pain—and since labor is pain in itself—it follows that men will resort to plunder whenever plunder is easier than work. History shows this quite clearly. And under these conditions, neither religion nor morality can stop it.

When, then, does plunder stop? It stops when it becomes more painful and more dangerous than labor. It is evident, then, that the proper purpose of law is to use the power of its collective force to stop this fatal tendency to plunder instead of to work. All the measures of the law should protect property and punish plunder.

But, generally, the law is made by one man or one class of men. And since law cannot operate without the sanction and support of a dominating force, this force must be entrusted to those who make the laws.

This fact, combined with the fatal tendency that exists in the heart of man to satisfy his wants with the least possible effort, explains the almost universal perversion of the law. Thus it is easy to understand how law, instead of checking injustice, becomes the invincible weapon of injustice. It is easy to understand why the law is used by the legislator to destroy in varying degrees among the rest of the people, their personal independence by slavery, their liberty by oppression, and their property by plunder. This is done for the benefit of the person who makes the law, and in proportion to the power that he holds.  

Victims of Lawful Plunder  

Men naturally rebel against the injustice of which they are victims. Thus, when plunder is organized by law for the profit of those who make the law, all the plundered classes try somehow to enter—by peaceful or revolutionary means—into the making of laws. According to their degree of enlightenment, these plundered classes may propose one of two entirely different purposes when they attempt to attain political power: Either they may wish to stop lawful plunder, or they may wish to share in it.

Woe to the nation when this latter purpose prevails among the mass victims of lawful plunder when they, in turn, seize the power to make laws!

Until that happens, the few practice lawful plunder upon the many, a common practice where the right to participate in the making of law is limited to a few persons. But then, participation in the making of law becomes universal. And then, men seek to balance their conflicting interests by universal plunder. Instead of rooting out the injustices found in society, they make these injustices general. As soon as the plundered classes gain political power, they establish a system of reprisals against other classes. They do not abolish legal plunder. (This objective would demand more enlightenment than they possess.) Instead, they emulate their evil predecessors by participating in this legal plunder, even though it is against their own interests.

It is as if it were necessary, before a reign of justice appears, for everyone to suffer a cruel retribution—some for their evilness, and some for their lack of understanding.  .