Freeman

ARTICLE

The Wisdom of Bastiat

APRIL 01, 1965 by WILLIAM HENRY CHAMBERLAIN

Mr. Chamberlin is a skilled observer and re­porter of economic and political conditions at home and abroad. In addition to writing a number of books, he has lectured widely and is a contributor to The Wall Street Journal and numerous magazines.

Among the intellectual champions of the free economy, none surpass­es in brilliance, clarity, wit, and humor the French economic writer, Frederic Bastiat, whose life coincided with the first half of the nineteenth century. Thor­oughly consistent in outlook, he fought socialism, protectionism, and every form of state interven­tion in the economic field with a powerful arsenal of weapons, con­vincing logic, parable, humorous hyperbole. His definition of the state—never more topical than at the present time when its powers in the economic field have swelled far beyond Bastiat’s wildest dreams or nightmares—should of itself insure him immortality:

"The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else."

And this is only the high point of a superb essay on the state which is a masterpiece of realistic exposition, brushing aside cant and illusion and making clear, one would think, even to the dullest mind, the illusory fallacy that the state can give without stint or limit, and not, in some way or other, take back the equivalent of its gifts, plus the cost of its own bureaucratic administration, from the supposed beneficiaries. The two paragraphs of elabora­tion that follow the designation of the state as the supreme fiction are as prophetic an indictment of the welfare state as one could find:

Each of us, more or less, would like to profit from the labor of others. One does not dare to proclaim this feeling publicly, one conceals it from oneself, and then what does one do? One imagines an intermedi­ary; one addresses the state, and each class proceeds in turn to say to it: "You, who can take fairly and honorably, take from the public and share with us!" Alas, the state is only too ready to follow such diabol­ical advice: for it is composed of cabinet ministers, of bureaucrats, of men, in short, who, like all men, carry in their hearts the desire, and always enthusiastically seize the op­portunity, to see their wealth and in­fluence grow. The state understands, then, very quickly the use it can make of the role the public entrusts to it. It will be the arbiter, the mas­ter, of all destinies. It will take a great deal; hence, a great deal will remain for itself. It will multiply the number of its agents; it will en­large the scope of its prerogatives; it will end by acquiring overwhelm­ing proportions.

But what is most noteworthy is the astonishing blindness of the pub­lic to all this. When victorious sol­diers reduced the vanquished to slav­ery they were barbarous, but theywere not absurd. Their object was, as ours is, to live at the expense of others; but, unlike us, they attained it. What are we to think of a people who apparently do not suspect that reciprocal pillage is no less pillage because it is reciprocal, that it is no less criminal because it is carried out legally and in an orderly man­ner; that it adds nothing to the pub­lic welfare; that, on the contrary, it diminishes it by all that this spend­thrift intermediary that we call the state costs. (Italics supplied).

Tocqueville’s Foresight

This prediction of the expand­ing role of the state recalls an­other vision of the perceptive French political scientist and traveler in America, Alexis de Tocqueville, expressed in some­what more poetic terms:

Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications and to watch over their fate. That power is abso­lute, minute, regular, provident and mild. It would be like the authority of a parent, if, like that authority, its object were to prepare men for manhood; but it seeks, on the con­trary, to keep them in perpetual childhood; it is well content that the people should rejoice, provided they think of nothing but rejoicing. For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness. It provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, reg­ulates the descent of property and subdivides their inheritances. What remains but to spare them all the care of thinking and all the trouble of living?…

The will of man is not shattered, but softened, bent and guided. Men are seldom forced by it to act, but they are constantly restrained from acting. Such a power does not de­stroy, but it prevents existence. It does not tyrannize, but it compresses, enervates, extinguishes and stupifies a people, till each nation is reduced to be nothing better than a flock of timid and industrious animals, of which the government is the shep­herd. I have always thought that servitude of the regular, quiet and gentle kind which I have just de­scribed might be combined more easily than is commonly believed with some of the outward forms of freedom; and that it might even es­tablish itself under the wing of the sovereignty of the people. (Italics supplied.)

Bastiat’s Distinctive Service

Bastiat’s works, quite extensive despite the fact that he died com­paratively young, are not as well-known to American readers as they should be. So it is a distinct public service of the publishers, the Van Nostrand Company, with the aid of the Volker Foundation, to issue English translations of three of his works under the titles Selected Essays on Political Economy (352 pp., $7.50), Economic Sophisms (291 pp., $6.75), and Economic Harmonies (596 pp., $11.50).

Unlike economists who put their ideas in forbiddingly ab­struse and difficult terms, Bastiat operated with humor and satire, understandable to all. He was a master of the device known as reduction ad absurdum, making an unsound idea ridiculous by carry­ing it to extreme conclusions. Two examples of this method are his proposal for "a negative railway" and, best of all, his imaginary petition of candlemakers against the unfair competition of the sun.

Some eager beaver, intent on the local interests of Bordeaux, had proposed that a new railway from Madrid to Paris should have an artificial break, with change of trains at Bordeaux. This would benefit local hotels, carriers, port­ers, and others standing to gain employment from such a break. An excellent idea, comments Bas­tiat. But why stop with Bor­deaux? Why not break the rail­way at half a dozen other way stations, for the same supposedly beneficial results? Better yet, why not construct a railway line that is all breaks, a "negative rail­way"?

The Candlemakers and the Sun

Even better is the Gargantuan joke of the petitioning candle-makers, protesting to parliament against "the ruinous competition of a foreign rival who apparently works under conditions so far superior to our own for the pro­duction of light that he is flooding the domestic market with it at an incredibly low price." The rival, of course, is the sun, and in a su­perb parody of protectionist argu­ments the candlemakers suggest that the sun is an agent of Eng­land, where it is less frequently visible than in France, and urge, as a remedy, the passing of a law forbidding windows and other means of access to the sun.

Such a law, they argue, would benefit immeasurably the whole French economy. If France con­sumes more tallow for a larger output of candles, there will have to be more cattle and sheep. So there will be an increase in cleared fields, meat, wool, leather, and es­pecially manure, the basis of all agricultural wealth. As more oil is required for light, there will be an expansion in the cultivation of olives and poppies. Thousands of vessels will be required for whal­ing; the need for chandeliers and other appurtenances for lighting will grow; there is not one French­man, from the wealthy stockhold­er to the humble seller of matches, whose prosperity will not be en­hanced. As the final clinching argu­ment the petitioners point out that customs barriers serve the pur­pose of keeping cheaper products out of France and they end their appeal:

"Make your choice; but be log­ical. So long as you ban, as you do, foreign coal, iron, wheat, and textiles, in proportion as their price approaches zero, how incon­sistent it would be to admit the light of the sun, of which the price is zero all day long."

As Henry Hazlitt, who writes the introduction to this volume, Economic Sophisms, says:

"The petition of the candle-makers is devastating. It is a flash of pure genius, a reductio ad ab­surdum that can never be exceed­ed, suffhcient in itself to assure Bastiat immortal fame among economists."

When he dispenses with humor and resorts to pure reason, Bas­tiat can be a formidable debater. Consider this passage from one of the sophisms entitled, "Abun­dance and Scarcity":

There is a fundamental antago­nism between the seller and the buyer.

The former wants the goods on the market to be scarce, in short supply, and expensive. The latter wants them abundant, in plentiful supply, and cheap.

Our laws, which should at least be neutral, take the side of the seller against the buyer, of the producer against the consumer, of high prices against low prices, of scarcity against abundance. They operate, if not in­tentionally, at least logically on the assumption that a nation is rich when it is lacking in everything.

One wishes Bastiat had been alive in the twentieth century to observe the operation of the United States farm subsidy legis­lation, under which all consumers and taxpayers are required to sub­sidize a few producers for pro­ducing as little as possible. One suspects that his normal flow of ridicule and invective would have dried up; he would have felt that it was enough to state the facts without further comment.

A Gifted Pamphleteer

Bastiat is not so much an orig­inal, seminal thinker in econom­ics as a highly gifted pamph­leteer, prepared to break a lance any day for the propositions that the best service government can render to business, industrial or agricultural, large or small, is to let it alone; that the free market is a far better, more reliable, and painless adjuster of economic dif­ficulties than a variety of state interventions; that the state is incapable of creating wealth and can only give to some by takingfrom others; that no service or benefit is given free. His message is well summarized in the opening sentences of Arthur Goddard’s preface to the English Language Edition of his works:

Ever since the advent of repre­sentative government placed the ulti­mate power to direct the administra­tion of public affairs in the hands of the people, the primary instrument by which the few have managed to plunder the many has been the soph­istry that persuades the victims that they are being robbed for their own benefit. The public has been despoiled of a great part of its wealth and has been induced to give up more and more of its freedom of choice because it is unable to detect the error in the delusive sophisms by which protec­tionist demagogues, national social­ists and proponents of government planning exploit its gullibility and its ignorance of economics.

Many of Bastiat’s essays are comparatively short and, natural­ly, there are a number of ref­erences to individuals and events of his country and time, although the editors, along with indices and notes, have supplied useful ex­planations where these seem re­quired. One of his longest and most fruitful essays, entitled "What Is Seen and What Is Not Seen," composed shortly before his death, is a searching examina­tion of the invisible as well as the visible effects of economic meas­ures. This is a very important subject, because almost every in­stance of state intervention may seem justified in terms of an im­mediate favorable effect. It is the long range consequences, invisible at first sight, that are less desir­able.

As is often his custom, Bastiat illustrates this point with a home­ly illustration. Suppose a careless boy breaks a window pane. His father pays six francs for a new pane. Here, it would seem, is a small subsidy and stimulus for the glass industry. In the view of some economists the broken pane is a blessing in disguise. But suppose the pane had not been broken. The six francs would have been spent for a new pair of shoes. The gain of the glass industry is the shoe industry’s loss. Bastiat is continu­ally in arms against the fallacy that the government can improve employment by "making" work out of public funds. For what is spent on promoting one kind of job is withdrawn from the support of another.

He exposes this fallacy with one simple example after another. Sup­pose a farmer wants to drain his land. But the money which he pro­posed to employ for this purpose is taken away by the tax collector and transferred to the entertain­ment allowance of the Ministry of the Interior. The Minister may offer a more lavish state dinner; but the farmer loses the advantage of having his land drained. What one group of workers gains is withheld from another. The author sums up his proposition as fol­lows:

In noting what the state is going to do with the millions of francs voted, do not neglect to note also what the taxpayers would have done, and can no longer do, with these same mil­lions. You see, then, that a public en­terprise is a coin with two sides. On one the figure of a busy worker, with this device: What Is Seen; on the other, an unemployed worker, with this device: What Is Not Seen…. The state opens a road, builds a palace, re­pairs a street, digs a canal; with these projects it gives jobs to certain workers. That is what is seen. But it deprives certain other laborers of em­ployment. That is what is not seen.

Refutation of Ricardo’s Law

In one of his more ambitious works, Economic Harmonies, Bas­tiat lights on an important truth, which, incidentally, refutes Ri­cardo’s "iron law" of wages. This Ricardian concept, so influential on Marx in formulating his the­ory, and now knocked into a cocked hat by experience in all leading noncommunist industrial nations, held that the poor would grow poorer and more numerous and the rich fewer and richer.

The truth Bastiat discovered is that, as the amount of capital em­ployed in a nation increases, the share of the resulting production going to the workers grows, both in percentage and in total amount. This is exactly what has happened in the United States and other countries as capital accumulates under the conditions of a market economy.

It is fashionable in some circles to regard capitalism as a luxury that wealthy countries can afford, whereas the underdeveloped areas of the world are supposed to be under some compulsion to adopt socialism. This is one of the least feasible of dogmatic theories. In the first place, how did the capi­talist countries invariably become wealthier, if not by permitting the benefits of the market economy under free competition and se­curity of private property? In the second place, why do the "under­developed" countries, with their assorted socialist experiments, be­come steadily poorer, notwith­standing foreign aid on an un­precedented scale? Is it not highly probable that these socialist ex­periments, with their expropria­tion of domestic capital and their discouragement of foreign invest­ment, lead inevitably to impover­ishment, no matter how much of the accumulated savings of the more well-to-do lands is poured down the drain of subsidization?

The United States and other free countries could well use more Bastiats today to direct a drum-fire of reasoned argument and witty ridicule against the current fallacies of the all-powerful state and the supposed curative virtues of state planned economies. To be sure, one of the principal dangers of our age was not a reality in Bastiat’s time, when no finance minister would have advocated a planned deficit as a sure recipe for continuing prosperity. Much of his reasoning is based on the as­sumption that a state expenditure must be balanced by a state-im­posed tax.

What Bastiat would have said if confronted with a proposal for higher state expenditures, lower taxes, and budget deficits indefi­nitely prolonged would defy the imagination. Perhaps his comment would scarcely have been print­able.

Note: The three volumes of the new translation of these works of Bastiat, published by Van Nostrand, may be ordered from the Founda­tion for Economic Education, Irvington-on-Hudson, New York 10533.

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April 1965

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