Robinson Crusoe and Free Trade
JANUARY 01, 1958 by FREDERIC BASTIAT
Robinson Crusoe discovered that his island was suitable for both hunting and agriculture. So he and Friday soon developed a 12-hour work schedule that ensured them an adequate supply of food. But it is not generally known that they once had an opportunity to secure the same amount of food at a 25 per cent reduction in their labor — and turned it down!
As the fable goes, one day a canoe arrived from a foreign island. Since there was plenty of game but no agriculture on that island, the foreigner wanted to trade game for vegetables. He offered to supply Robinson and Friday with all the game they needed — and thus to cut six hours from their working day. In return, they were to give him two baskets of vegetables each day. This would increase the time they devoted to agriculture from six hours to nine hours. Thus the foreign trade would result in a net saving of three hours of labor each day for both Robinson and Friday.
They walked away from the foreigner to discuss his offer in private.
It soon developed that Friday was in favor of the trade, and Crusoe was opposed. Their reasoning went somewhat as follows:
Robinson pointed out to Friday that if they accepted the foreigner’s offer, their own hunting industry would thereby be ruined. In turn, Friday pointed out to Robinson that they would still have as much game to eat as they now had. True, they would have to work longer at agriculture, but they would still save three hours of labor on the total transaction.
Then Robinson argued that the three hours of saved labor was not a gain but a loss, since everybody knows that labor is wealth. Anyway, what would they do with those three hours?
Friday replied that they could use them to fish, or to improve their house, or to read, or merely to loaf. But Robinson was too firmly grounded in the labor theory of protectionism to be convinced. He honestly believed that labor itself (rather than the net product of that labor) is the measure of wealth.
Robinson then added that there were also political reasons for rejecting the offer of the perfidious foreigner. For example, the foreigner wouldn’t make the offer unless he expected to gain from it. Friday agreed, but pointed out that they also would gain from the trade.
Next, Robinson explained to Friday that this trade would make them dependent on the foreigner. Again Friday agreed, but argued that the foreigner would likewise be dependent on them.
Then Robinson pointed out that the foreigner might learn to grow his own vegetables on his own island. If that happened, he would no longer bring game to them, and they might starve. Or, even worse, he might bring vegetables as well as game, and thus destroy two of their industries instead of merely one.
Friday was of the opinion that if the trade ceased altogether, they would be no worse off than now. And if the foreigner brought both game and vegetables, they would then have to produce something else to exchange with him.
But Robinson thought that Friday’s arguments were impractical and based on mere theory. So, refusing to listen further, he returned to the foreigner, and spoke as follows:
"Stranger, before we accept your offer, we must be sure of two things. First, you must assure us that your island is not richer in game than is ours, for we wish to fight with equal weapons. Second, since in all exchange there is necessarily a winner and a loser, you must lose by the exchange. Now what do you say to that?"
"Nothing," said the foreigner. And laughing loudly, he regained his canoe and paddled away.
Translated and condensed by Dean Russell from Selected Works of Frederic Bastiat, Volume 1.
The Open Door
The redeeming feature in opening our markets to free trade among the so-called "backward" countries of the world is that it would cost us nothing to do so. On net balance, we would gain as much as they. Here is an opportunity to demonstrate to the world that when we glibly talk "free enterprise" we talk it with conviction — not with restriction.
W. M. Curtiss, The Tariff Idea