If each man has the right to defend, even by force, his person, his liberty, and his property, several men have the right to get together, come to an understanding, and organize a collective force to provide regularly for this defense. Collective right, then, has its principle, its raison d’être, its legitimate basis, in individual right; and the collective force can rationally have no other end, no other function, than that of the individual forces for which it substitutes. Thus, as an individual cannot legitimately use force against the person, liberty, or property of another individual, for the same reason collective force cannot legitimately be applied to destroy the person, liberty, and property of individuals or classes.
– Frédéric Bastiat in The Law
In a modern France that idolizes José Bové, a French farmer who is best known for vandalizing a McDonald’s restaurant, as a national hero, it is easy to forget that there once lived in that same country, a liberal economist by the name of Claude Frédéric Bastiat. In America, he happens to be one of the most well-known of the French liberalists, yet is almost completely unheard of in his native France.
Bastiat is most famous for his 1845 “Candle-makers’ Petition”, a satirical plea on behalf of the candle-makers of France to the French Parliament to ban the sun, which he wittily describes as a competitor that brings ruin to the candle-makers since it offers illumination for free. Here, Bastiat effectively demonstrates that if the citizens of the country may obtain a good or a service cheaply, it would be ludicrous to turn down this offer even if it would mean some loss of business for the domestic producers of that same good or service. This is one of the best-argued denunciations of protectionism ever written and is justly reprinted in a number of economics textbooks.
Like this faux petition, many of his other insights, including his dismantlement of the commonly held misconception that exports are inherently good and imports inherently bad, his exposition of the notion of opportunity cost before the term itself was coined, and his critique of the “lump of labor” fallacy, in which the total amount of work available in an economy is seen to be fixed, remain highly relevant to this day.
In many of these instances, he was not the first to give voice to these ideas of reason, for others such as Adam Smith, David Ricardo and David Hume had in their time expressed similar sentiments. However his eloquence in the presentation of these thoughts was unique and his mastery of satire is a match for that of Jonathan Swift. Above all, he intended at all times for his writing to be readable and readily understandable by common men, a lesson that today’s economists would do well to heed. The extreme care that he took to ensure that his ideas would be accessible to all is aptly illustrated in de Fontenay’s excellent Notice sur la vie et les écrits de Frédéric Bastiat, where it is claimed that one of his Sophisms, among other works, was rewritten no less than three times, each in a markedly different tone. The first is described as being scientifically precise and firm, Bastiat writing for himself, the second was a down-to-earth discussion, free of technical jargon, the last was written in the light tone of an amusing conversation, Bastiat conscious of the difficulties of getting through to a generally ignorant and easily distracted public.
Born to a well-to-do family in Bayonne in 1801 and orphaned at the age of nine, Bastiat was well-placed from the beginning to resent the destructive intervention of the state on private commerce. The Bastiat family was one of original beneficiaries of the privatization of national assets due to the revolution of 1789, which also abolished all indirect taxes, allowing the family business to flourish. However the opposite was true under the prohibitory regime of the Empire, involving protectionist policies and high duty tariffs, driving the Bastiats’ family business to the verge of bankruptcy, a contrast that could not have escaped the young Frédéric Bastiat.
In 1814, Bastiat began studying in one of the most prestigious and cosmopolitan schools of the period, the Sorèze, and was influenced by the spirit of liberal tolerance that prevailed among its students. He inherited an extensive estate after the death of his grandfather in 1825 and turned his attention to farming. His success in this domain however, despite his continued efforts to introduce modern agricultural techniques was only marginal.
Between 1831 and 1846, Bastiat served as justice of the peace at Mugron, a post that allowed him to come into contact with a variety of farmers, laborers, and traders, giving him an overall view of the socioeconomic problems of the period. In a decision in a small village in 1841 that was particularly characteristic of his liberal tendencies, he refused to prosecute a barkeeper who was accused of violating a mayoral edict ordering that pubs be closed during Church services, saying that the question of “religious and moral respect falls outside of the domain of the secular powers,” and should be left to the individual consciences of citizens.
At Mugron, his best friend was his neighbor Félix Coudroy, who was in many ways, a mirror to Bastiat, and in their conversations, Bastiat’s developed and refined his own thoughts and ideas. Though initially a sympathizer of Rousseau’s utopist socialism, Coudroy was eventually converted by Bastiat, who in turn invoking the ideas of thinkers like Adam Smith, Jean-Baptiste Say and Destutt de Tracy, persuaded his friend that individual manifestations of self-interest are inherently self-limiting and this seemingly chaotic behavior will naturally lead to an equilibrium acceptable to a majority of people.
In Les Années de Formation de Frédéric Bastiat, Jean-Claude Paul-DeJean explains the fundamentals of Bastiat’s thought: that man is a being who has needs and achieves satisfaction when those needs are fulfilled. Between this need and its satisfaction is an obstacle that prevents the immediate satisfaction of the need, and effort is required to overcome this obstacle. Man is therefore forced to permanently judge between the tedium of his efforts and the satisfaction of his need. Bastiat’s insight was that he realized that this judgment can only be made by the individual; need and satisfaction are not transmissible to anyone else. Effort however is transmissible, and exchange of effort or labor is therefore the foundation of any society.
Bastiat’s first published pamphlets and articles concerned the reform of the customs system, on which he had worked on and off since 1825. In 1834, he wrote an article in response to a petition by the merchants of Bordeaux, Le Havre, and Lyons to eliminate tariffs on agricultural products but to maintain them on manufactured goods. There, Bastiat argued that all tariffs should be abolished entirely, writing that “You demand privilege for a few”, whereas ” I demand liberty for all.” In 1841, he wrote a second essay, Le fisc et la vigne, to oppose all domestic taxes on wine.
In France, it seemed that Bastiat’s struggle for free trade was hopeless, and it was only by pure chance that he learned how far advanced the same struggle had come in neighboring England. By virtue of his liberal education and his fluency in the English language, Bastiat often found himself defending English ideas and culture from the Anglophobia that gripped his compatriots. One day, one of these Anglophobes showed Bastiat a translation of a speech said to have been delivered by the Prime Minister Sir Robert Peel of England, which insulted the French nation.
Curious, Bastiat ordered the copies of the original English publication in which the speech was recorded, and discovered that the quoted words were never uttered. However with the English newspapers in hand, he soon made another, far more important discovery: the French press failed to make any report whatsoever of the vigorous free trade reform then going on in England. In 1844, he wrote an essay Sur l’influence des tarifs anglais et français, with the intent of airing the ideas of free trade in France and persuading his fellow Frenchmen to imitate the English in this reform, for the prestigious Journal des Économistes.
This essay propelled Bastiat to national and international fame and led to his friendship with Richard Cobden, the leader of the British Anti-Corn Law League, which succeeded in abolishing all trade restrictions in England by 1850. Bastiat continued to publish essays in various journals and in 1846 organized a similar French Free-Trade Association and served as the editor of the association’s newspaper, Le Libre-Exchange.
The association itself was short-lived, interrupted as it was by the French revolution of 1848. Though Bastiat was elected to the Constituent Assembly, and then to the Legislative Assembly of the new Republic, he had to struggled against a resurgent socialism and he devoted the rest of his life to refute each of the arguments of socialism, publishing such essays and pamphlets as Propriété et Loi, Justice et fraternité, Protectionnisme et communisme, Maudit argent and L’État. In fact, Bastiat wanted to do more than that. As de Fontenay writes in his Notice, having examined economic phenomena and the fundamental forms of modern societies through the triple lens of self-interest, general interest and justice, he wanted to demonstrate that all three were concordant, in such a way that “the good of the individual leads to the good of all, and the good of all leads to the good of the individual.” He believed that “the natural result of the social mechanism is a constant elevation of the physical, intellectual and moral level of all classes, with a tendency towards equality” and all that would be required to achieve this is individual liberty.
Towards the end of life, he worked on his Harmonies that were supposed to spell out his full thought, and the idea of harmony to him was an almost religious faith in the ultimate unity of science, which would include social laws that were as infallible as physical laws. This began with the Harmonies économiques that explained that in a free society in which the government confines its responsibilities to suppressing crime and special-interest groups who seek to use the state as a means of plundering their fellow citizens, man’s conflicting interests can be made harmonious. This was to have been followed by the more ambitious Harmonies sociales, but Bastiat never completed this work, having died at the age of 49 in 1850. His career as an economist had lasted a mere five years. The Harmonies were never accepted by his contemporaries. While his Sophisms were generally applauded and is regarded now as the best literary argument of free trade available, the Harmonies, too ambitious and too revolutionary, were greeted only by a cold silence and spurned even by his allies.
That the need for Bastiat’s Harmonies has never been more pressing is evident: a ceremony marking the bicentenary of Bastiat in his hometown of Mugron in July 2001, attended notably by foreign economists, was disrupted by anti-globalization protesters. The debacles of Seattle, Genoa and virtually every other major meeting involving the IMF, the World Bank or the World Trade Organization, only accentuates how badly the proponents of free-trade have failed in the public opinion war: as The Economist notes, globalization, far from being the greatest cause of poverty, is its only feasible cure.
If the argument for free-trade is clear cut, however badly the public has misunderstood it, there is another growing movement that Bastiat would have found alarming. In August 2001, the policy-making body of Amnesty International met in Dakar to discuss expanding its mandate to encompass the, until now largely ignored, International Covenant on Economic, Social and Cultural Rights. This was the second of two declarations of human rights made by the United Nations after the second world war. The first, the International Covenant on Civil and Political Rights, which Bastiat would probably have agreed with, covering such rights as the right to vote, the right not to be tortured, and the right to free speech are largely accepted and implemented in real laws. The second is far more controversial and would have worried Bastiat: it asserts that all humans have the rights to health, food and employment.
In The Law, Bastiat wrote, “The prevailing illusion of our age is that it is possible to enrich all classes at the expense of one another—to make plunder universal under the pretext of organizing it. Now, legal plunder can be committed in an infinite number of ways; hence, there are an infinite number of plans for organizing it: tariffs, protection, bonuses, subsidies, incentives, the progressive income tax, free education, the right to employment, the right to profit, the right to wages, the right to relief, the right to the tools of production, interest-free credit, etc., etc. And it is the aggregate of all these plans, in respect to what they have in common, legal plunder, that goes under the name of socialism.”
So while it may seem to be noble to accord additional rights to man, Bastiat warned that empowering governments to honor and uphold these so-called second generation rights would create conflicts with first generation rights. For example, imposing taxes on the rich in order to guarantee free education on the poor is a forced transfer of wealth and therefore a violation of an individual’s right to private property. Certainly charity would not be charity if it had to be solicited at gunpoint, even if it were under the aegis of the state. Again in The Law, Bastiat pointed this out, saying, “People not only want the law to be just; they also want it to be philanthropic. They are not satisfied that justice should guarantee to each citizen the free and inoffensive exercise of his faculties for his physical, intellectual, and moral development; they require of it that it should directly spread welfare, education, and morality throughout the country. This is the seductive aspect of socialism. But, I repeat, these two functions of the law contradict each other. We must choose between them. A citizen cannot at the same time be free and not free. M. de Lamartine wrote me one day: ‘Your doctrine is only the half of my program; you have stopped at liberty; I go on to fraternity.’ I answered him: ‘The second half of your program will destroy the first half.’ And, in fact, it is quite impossible for me to separate the word ‘fraternity’ from the word ‘voluntary.’ It is quite impossible for me to conceive of fraternity as legally enforced, without liberty being legally destroyed, and justice being legally trampled underfoot.”
To be certain, Bastiat’s unapologetic brand of laissez-faire capitalism embarrasses even many of today’s most ardent advocates of free-trade. But ranged against the many thousands of anti-globalization protesters eager to prevent further economic integration, some of whom are no more than thugs and others who protest for the simple act of protesting, those who love and cherish freedom would do well to draw on the inspiration and example of Bastiat. Not only has he courageously and honestly pointed out the inherent contradictions in the arguments of the protectionists and socialists, he did so in a manner than the members of the general public could understand and admire.
At the time of writing of this essay, the world is inching towards a new round of WTO agreements based on talks begun in Qatar, where the items on the agenda, trade in agricultural products and textiles, if passed, would go a long way in helping to eliminate poverty in the poorest parts of the world. At the same time, the global economy is in an unusually synchronized downturn, with some commentators thinking that this could turn out to be the most severe world recession since the 1930s. The initial reactions of the world’s governments to these events are not promising: the United States is likely to invoke anti-dumping rules to protect its uncompetitive domestic steel industry, a directive aimed at making cross-border takeovers was recently defeated in the European Parliament in order to protect the national utilities of European countries, and Japan continues to pretend that its banking system is healthy in order to stave off much-needed reforms. In short, governments are resorting to protectionist measures of the sort that Bastiat would have decried, while precisely the opposite needs to be done. At times like this, it is easy to be over-dramatic and elevate undeserving heroes, but never have the dangers of economic illiteracy been graver, and never has the corresponding need for eloquent, honest and intelligent economic educators like Bastiat been greater.