Frédéric Bastiat
Frédéric Bastiat
Classical liberalism
Bastiat.jpg
Born 30 June 1801(1801-06-30)
Bayonne, France
Died 24 December 1850(1850-12-24) (aged 49)
Rome, Papal States
Nationality French
Influences Richard Cobden, Anti-Corn Law League, Adam Smith
Influenced Austrian School, Libertarianism, Ludwig von Mises

Claude Frédéric Bastiat (pronounced: [klod fʁedeʁik bastja]) (29 June 1801[1] – 24 December 1850) was a French classical liberal theorist, political economist, and member of the French assembly. He was notable for developing the important economic concept of opportunity cost.

Contents

Biography

Bastiat was born in Bayonne, Aquitaine, France. When he was nine years old, he was orphaned and became a ward of his paternal grandparents. At 17, he left school to work in his family's export business. Economist Thomas DiLorenzo suggests that this experience was crucial to Bastiat's later work since it allowed young Frédéric to acquire first-hand knowledge of how regulation can affect markets.[2] Sheldon Richman notes that "he came of age during the Napoleonic wars, with their extensive government intervention in economic affairs."[3]

When Bastiat was 25, his grandfather died, leaving the young man the family estate, thereby providing him with the means to further his theoretical inquiries. Bastiat developed intellectual interests in several areas including "philosophy, history, politics, religion, travel, poetry, political economy and biography."[2] "After the middle-class Revolution of 1830, Bastiat became politically active and was elected justice of the peace in 1831 and to the Council General (county-level assembly) in 1832. He was elected to the national legislative assembly after the French Revolution of 1848."[1]

His public career as an economist began only in 1844. It was cut short by his untimely death in 1850. Bastiat had contracted tuberculosis, probably during his tours throughout France to promote his 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. Bastiat died in Rome on 24 December 1850.

Works

Bastiat was the author of many works on economics and political economy, generally characterized by their clear organization, forceful argumentation, and acerbic wit. Economist Murray Rothbard wrote that "Bastiat was indeed a lucid and superb writer, whose brilliant and witty essays and fables to this day are remarkable and devastating demolitions of protectionism and of all forms of government subsidy and control. He was a truly scintillating advocate of an untrammeled free market."[1] On the other hand, Bastiat himself declared that subsidy should be available, but limited: "under extraordinary circumstances, for urgent cases, the State should set aside some resources to assist certain unfortunate people, to help them adjust to changing conditions."[4] Among his better known works is Economic Sophisms,[5] which contains many strongly worded attacks on statist policies. Bastiat wrote it while living in England to advise the shapers of the French Republic on pitfalls to avoid.

Contained within Economic Sophisms is the famous satirical parable known as the "Candlemakers' petition"[6] 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. He also facetiously "advocated" forbidding the usage of everyone's right hand, based on the assumptions that more difficulty means more work and more work means more wealth.[7] Much like Jonathan Swift's A Modest Proposal or Benjamin Franklin's anti-slavery works, Bastiat's argument cleverly highlights basic flaws in protectionism by demonstrating its absurdity through logical extremes.

Bastiat's most famous work, however, is undoubtedly The Law, originally published as a pamphlet in 1850. It defines, through development, a just system of laws and then demonstrates how such law facilitates a free society.

He also famously engaged in a debate, between 1849 and 1850, with Pierre-Joseph Proudhon about the legitimacy of interest.[8]

Views

Bastiat asserted that the sole purpose of government is to defend and protect the right of an individual to life, liberty and property. From this definition, Bastiat concluded that the law cannot defend life, liberty and property if it promotes socialist policies, which are inherently opposed to these very things. In this way, he says, the law is perverted and turned against the only things (life, liberty, and property) it is supposed to defend.[9]

He was also a strong supporter of free trade. He "was inspired by and routinely corresponded with Richard Cobden and the English Anti-Corn Law League and worked with free-trade associations in France."[1]

In The Law, Bastiat explains that if the privileged classes use the government for "legalized plunder" this will encourage the lower classes to revolt or use socialist "legalized plunder" and that the correct response to both the socialists and the corporatists is to cease all "legalized plunder". Bastiat also explains why his position is that the law cannot defend life, liberty and property if it promotes socialist policies. When used to obtain "legalized plunder" for any group, he says, the law is perverted and turned against the thing it is supposed to defend.[9]

Because of his stress on the role of consumer demand in initiating economic progress, Bastiat has been described by Mark Thornton, Thomas DiLorenzo,[2] 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."[10]

Frédéric Bastiat

One of Bastiat's most important contributions to the field of economics was his admonition to the effect that good economic decisions can be made only 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 second and third consequences. Additionally, one must examine the decision's effect not only on a single group of people (say candlemakers) or a single industry (say candlemaking), 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 and developed 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.

Negative railroad

A famous section of Economic Sophisms 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 criticize 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 out-competed 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 significant points here:

  1. Even if the producers in a society are benefited by these tariffs (which, Bastiat claims, 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 at which they should be able to secure them.
  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.

In short, the thrust of Bastiat's negative railroad hinges on two major points:

  1. All economic decisions should be made with the consumer in mind (this is the central theme of Bastiat's economic ideology, and favoring the consumer rather than the supplier is demand side economics, the opposite of supply side economics, but Bastiat does not share the interventionism of Keynesian demand side economists).
  2. Tariffs serve no purpose but to negate the gains provided to society by technology, labor, ingenuity, determination and progress.

An important corollary to these conclusions is that the power that consumers wield with any governing body, while theoretically tremendous, is extremely diffuse in application. 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 boycotting, or 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 practically impossible. Producers, on the other hand, can form combinations and trade groups and are thus 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, etc. It is for this reason that governments are much more likely to pander to the desires of producers than to those of 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.

Bastiat's tomb

Bastiat's tomb in San Luigi dei Francesi

Bastiat died in Rome and is buried at San Luigi dei Francesi in the center of that city. He declared on his deathbed that his friend Gustave de Molinari (publisher of Bastiat's 1850 book The Law) was his spiritual heir.

Bastiat in English translation

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.

A collection of Bastiat's major works is available from the Ludwig von Mises Institute:

  • 2007. The Bastiat Collection, Volume 1[11] and Volume 2[12] Ludwig von Mises Institute.
  • The Man and the Statesman, The Correspondence and Articles on Politics (2009) Jacques de Guenin, General Editor; Introduction by Jacques de Guenin and Jean-Claude Paul Dejean; Dennis O'Keeffe, Translation Editor; David M. Hart, Academic Editor. Liberty Fund. Book overview

See also

Additional reading

  • Roche, George, Charles. Frederic Bastiat : A Man Alone Arlington House (1971) ISBN 978-0870001161
  • Russell, Dean. Frederic Bastiat: Ideas and Influence Irvington-on-Hudson, N.Y.: 1969: Foundation for Economic Education.

References

  1. ^ a b c d Thornton, Mark (2011-04-11) Why Bastiat Is Still Great, Mises Institute
  2. ^ a b c DiLorenzo, Thomas. "Frederic Bastiat (1801-1850): Between the French and Marginalist Revolutions." Mises.org.
  3. ^ Richman, Sheldon. "Frédéric Bastiat: An Annotated Bibliography." The Library of Economics and Liberty. 2000.
  4. ^ Justice and fraternity, in Journal des Économistes, 15 June 1848, pg. 313
  5. ^ Bastiat, Frédéric. "Economic Sophisms". http://www.econlib.org/library/Bastiat/basSoph.html. Retrieved 2008-12-12. 
  6. ^ Bastiat, Frédéric. "Candlemakers' petition". http://silentpc.org/university/Candlemaker.pdf. Retrieved 2008-12-12. 
  7. ^ "Bastiat: Economic Sophisms, Series 2, Chapter 14-17". Library of Economics and Liberty. http://www.econlib.org/library/Bastiat/basSoph8.html#S.2,%20Ch.16,%20The%20Right%20Hand%20and%20the%20Left. Retrieved 2008-12-02. 
  8. ^ "Bastiat-Proudhon Debate on Interest". Praxeology.net. http://praxeology.net/FB-PJP-DOI.htm. Retrieved 2008-12-02. 
  9. ^ a b Bastiat, Frédéric. The Law. Ludwig von Mises Institute, 2007.
  10. ^ Thornton, Mark. "Frédéric Bastiat as an Austrian Economist." Mises.org.
  11. ^ Mises.org
  12. ^ Mises.org

External links


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