23 Aug
2010
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Frédéric Bastiat: A Guide for Our Times

In this age of Keynesian based economic interventionism, when Congress and the President (and this president’s predecessor, for that matter) refuse to let large companies and banks declare bankruptcy and refinance; when each government induced market failure is “combated” with a newer, more extensive central plans; when the government ominously declares itself to be on the side of the “working man” whilst destroying his employer; when the political class is every bit as dangerous as the Snake in the Garden of Eden…

It helps to have at your disposal a reliable guide for dependable truth and wisdom.  Enter Frederic Bastiat.  A perennial favorite of free market oriented economists from Joseph Schumpeter, to F.A. Hayek, to Murray Rothbard, to Henry Hazlitt (Bastiat was Hazlitt’s archetype in many respects) to Milton Friedman, Bastiat’s common-sense based denunciations of meddling government resonates to this day.

Monsieur Bastiat lived from 1801-1850.  He was a French economist, political philosopher, and statesman.  A dedicated classical liberal, he wrote timeless critiques of mercantilism, socialism, and statism.  The majority of his work that survives was written from the period of 1848, the year of French revolution, to the time of his death in 1850.  In a span of two years he poured out some of the wittiest, incisive, most consistent and withering critiques of improper governmental action of all times.

His most famous work is The Law, which distinguishes between two types of law: those that protect natural rights, i.e. the proper intention of law, and those that pervert the function of law and reduce it to a mechanism for “legal plunder.”  Bastiat writes, famously,

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. [emphasis added]

Equally as instructive as The Law is his essay on the subject of the economic science.  In That Which is Seen, and That Which is Not Seen, Bastiat explains that economics must consider the short term and the long term, the factual and the counter-factual, of all economic questions.  Writes Bastiat,

In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause – it is seen. The others unfold in succession – they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference – the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, – at the risk of a small present evil.

In a lesser known work entitled What is Money?, Bastiat takes on the nearly impossible task of trying to explain the most confounding of all economic subjects.  In a Socratic dialogue between a frenzied Financier, F, and an alarmed and patient interlocutor, B, Bastiat works through a multitude of common fallacies related to the topic of money: socialism, inflationism, protectionism, and war.  Explains the Financier,

F. Heaven preserve me from that! For riches, don’t you see, are not a little more or a little less money. They are bread for the hungry, clothes for the naked, fuel to warm you, oil to lengthen the day, a career open to your son, a certain portion for your daughter, a day of rest after fatigue, a cordial for the faint, a little assistance slipped into the hand of a poor man, a shelter from the storm, a diversion for a brain worn by thought, the incomparable pleasure of making those happy who are dear to us. Riches are instruction, independence, dignity, confidence, charity; they are progress and civilization. Riches are the admirable civilizing result of two admirable agents, more civilizing even than riches themselves — labor and exchange….

B. Well! now you seem to be singing the praises of riches, when, a moment ago, you were loading them with imprecations!

F. Why, don’t you see that it was only the whim of an economist? I cry out against money, just because everybody confounds it, as you did just now, with riches, and that this confusion is the cause of errors and calamities without number. I cry out against it because its function in society is not understood, and very difficult to explain. I cry out against it because it jumbles all ideas, causes the means to be taken for the end, the obstacle for the cause, the alpha for the omega; because its presence in the world, though in itself beneficial, has, nevertheless, introduced a fatal notion, a perversion of principles, a contradictory theory, which, in a multitude of forms, has impoverished mankind and deluged the earth with blood. I cry out against it, because I feel that I am incapable of contending against the error to which it has given birth, otherwise than by a long and fastidious dissertation to which no one would listen. Oh! if I could only find a patient and benevolent listener! [emphasis added]

I confess this piece holds a special place in my heart because it was finally able to establish a basic understanding of monetary principles in my own head.  I confess also that I sympathize with the desperately frustrated F and his impending despair.  When the leading intellectual monetary authorities are preaching a perverted doctrine of money and economics, attempting to explain sound theory requires first a thorough deprogramming.  This task is made doubly difficult, as both the leading economists of the Left (Krugman, Keynes) and the Right (Friedman, most of Wall St.) are lost in hopelessly specious, pseudo-sophisticated planning schemes.

Whether you’re interested in politics, economics, or money, Bastiat’s words are as edifying as they are entertaining.  Unlike many boring journalists and commentators, who make a living parroting their favorite politicians regardless of their consistency, Bastiat writes independently, with great learning and tremendous wit.

At times, the reader glimpses Mssr. Bastiat’s wry and sardonic personality.  From his work, A Petition, written as an open letter to the French Parliament ostensibly from France’s candlemakers,

We are suffering from 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; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival… is none other than the sun… [emphasis added]

In that particular work, dripping thick with derision, one can almost sense his disgust with contemptible politicians who use the law to stifle competition and harm consumer interests.  Indeed, as the above passage exemplifies, even if you’re completely uninterested in all things political, his writing qua writing is deserving of your attention for its literary merit and rhetorical charge.

Bastiat’s worth in these times is incalculable (a formulation he may or may not take issue with!), as the American government expands in size and power with every vote of Congress.

Additional resources for the works of Bastiat can be found here and here.

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