Frédéric Bastiat

Frédéric Bastiat
Born Claude-Frédéric Bastiat
(1801-06-29)29 June 1801
Bayonne, France
Died 24 December 1850(1850-12-24) (aged 49)
Rome, Papal States
Nationality French
School or
tradition		 Classical liberalism
Influences Richard Cobden, Adam Smith, Jean-Baptiste Say, Charles Comte, Charles Dunoyer
Contributions The Law (La Loi)
Notes

Claude-Frédéric Bastiat (French: [klod fʁedeʁik bastja]; 29 June 1801[1] – 24 December 1850) was a French economist and author who was a prominent member of the French Liberal School. He developed the economic concept of opportunity cost, and introduced the Parable of the Broken Window. He was also a Freemason, and member of the French National Assembly.[2]

As a strong advocate of classical liberalism and the economics of Adam Smith, his views favouring free trade and opposing protectionism provided a basis for libertarian capitalism and the Austrian School.[3]

Biography

Bastiat was born in Bayonne, Aquitaine, a port town in the south of France on the Bay of Biscay, on 29 June 1801. His father, Pierre Bastiat, was a prominent businessman in the town. His mother died in 1808 when Frédéric was seven years old.[4] His father moved inland to the town of Mugron with Frédéric following soon afterward. The Bastiat estate in Mugron had been acquired during the French Revolution and had previously belonged to the Marquis of Poyanne. Pierre Bastiat died in 1810, leaving Frédéric an orphan. He was fostered by his paternal grandfather and his maiden aunt, Justine Bastiat.[4]

Bust of Frédéric Bastiat in Mugron, France

He attended a school in Bayonne, but his aunt thought poorly of it and so enrolled him in the school Saint-Sever. At age 17, he left school at Sorèze to work for his uncle in his family's export business. It was the same firm where his father had been a partner.

Bastiat began to develop an intellectual interest. He no longer wished to work with his uncle and desired to go to Paris for formal studies. This hope never came true as his grandfather was in poor health and wished to go to the Mugron estate. Bastiat accompanied him and cared for him. The next year, when Bastiat was 24, his grandfather died, leaving the young man the family estate, thereby providing him with the means to further his theoretical inquiries.[4] Bastiat developed intellectual interests in several areas including philosophy, history, politics, religion, travel, poetry, political economy and biography. "After the middle-class Revolution of 1830, Bastiat became politically active and was elected justice of the peace of Mugron in 1831 and to the Council General (county-level assembly) of Landes in 1832. He was elected to the national legislative assembly soon after the French Revolution of 1848."[3]

His public career as an economist began only in 1844 when his first article was published in the Journal des economistes during October of that year. It was ended by his untimely death in 1850. Bastiat 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 ended his life. During the autumn of 1850, he was sent to Italy by his doctors. He first traveled to Pisa, then on to Rome. On 24 December 1850, Bastiat called those with him to approach his bed. He murmured twice the words "the truth" then died.[4]

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 unrestricted free market."[3] However, 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."[5] Among his better known works is Economic Sophisms,[6] a series of essays (originally published in the Journal des Économistes) which contain a defence of free trade and many strongly worded attacks on statist policies. Bastiat wrote the work while living in England to advise the shapers of the French Republic on perils to avoid. Economic Sophisms was translated and adapted for an American readership in 1867 by the economist and historian of money Alexander del Mar, writing under the pseudonym "Emile Walter".[7]

Economic Sophisms and the "Candlemakers' Petition"

Contained within Economic Sophisms is the satirical parable known as the "Candlemakers' petition" in which candlemakers and tallow producers lobby the Chamber of Deputies of the French July Monarchy (1830–1848) to block out the Sun to prevent its unfair competition with their products.[8] Also included in the Sophisms is a facetious petition to the king asking for a law forbidding the usage of everyone's right hand, based on a presumption by some of his contemporaries that more difficulty means more work and more work means more wealth.[9]

The Law (1850)

Bastiat's most famous work, however, is The Law,[10] 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.

In The Law, he wrote that everyone has a right to protect "his person, his liberty, and his property". The State should be only a "substitution of a common force for individual forces" to defend this right. "Justice" (defense of one's life, liberty, property) has precise limits, but if government power extends further, into philanthropic endeavors, government becomes so limitless that it can grow endlessly. The resulting statism is "based on this triple hypothesis: the total inertness of mankind, the omnipotence of the law, and the infallibility of the legislator." The public then becomes socially-engineered by the legislator and must bend to the legislators' will "like the clay to the potter":

I do not dispute their right to invent social combinations, to advertise them, to advocate them, and to try them upon themselves, at their own expense and risk. But I do dispute their right to impose these plans upon us by law – by force – and to compel us to pay for them with our taxes.

Bastiat posits that the law becomes perverted when it punishes one's right to self-defense (of his life, liberty, and property) in favor of another's right to "legalized plunder," which he defines as: "if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime."[11] Bastiat was thus against redistribution.

"What is Seen and What is Unseen"

In his 1850 essay "Ce qu'on voit et ce qu'on ne voit pas" ("What is Seen and What is Unseen"), through the parable of the broken window, he introduced the concept of opportunity cost in all but name; this term was not coined until over 60 years after his death—in 1914 by Friedrich von Wieser.

Debate with Proudhon

He also famously engaged in a debate, between 1849 and 1850, with Pierre-Joseph Proudhon about the legitimacy of interest.[12] As Robert Leroux argued, Bastiat had the conviction that Proudhon's anti-interest doctrine "was the complete antithesis of any serious approach".[13] Proudhon famously lost his temper and declared to Bastiat: "Your intelligence is asleep, or rather it has never been awake...You are a man for whom logic does not exist...You do not hear anything, you do not understand anything...You are without philosophy, without science, without humanity...Your ability to reason, like your ability to pay attention and make comparisons is zero...Scientifically, Mr. Bastiat, you are a dead man."[14]

Views

Bastiat asserted that the sole purpose of government is to protect the right of an individual to life, liberty, and property, and why it is dangerous and morally wrong for government to interfere with an individual's other personal matters. From this, Bastiat concluded that the law cannot defend life, liberty, and property if it promotes "legal [or legalized] plunder," which he defined as using government force and laws to take something from one individual and give it to others (as opposed to a transfer of property via mutually-agreed contracts, without using fraud nor violent threats against the other party, which Bastiat considered a legitimate transfer of property).[15]

In The Law, Bastiat explains that, if the privileged classes or socialists use the government for "legalized plunder," this will encourage the other socio-economic class to also use "legal plunder," and that the correct response to both the socialists and the corporatists is to cease all "legal plunder." Bastiat also explains in The Law why his opinion 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 against the only things (life, liberty, and property) it is supposed to defend.[15]

Bastiat 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."[3]

Because of his stress on the role of consumer demand in initiating economic progress (a form of demand-side economics), Bastiat has been described by Mark Thornton, Thomas DiLorenzo, 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."[16]

Frédéric Bastiat

One of Bastiat's most important contributions to 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 outcompeted 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 makes two significant statements 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 statements, Bastiat suggests—in a classic reductio ad absurdum—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 this government should simply build a broken or "negative" railroad right from the start, and not waste time with tariffs and rail building.[17]

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.

Books

See also

References

  1. ↑ "Frederic Bastiat". Encyclopædia Britannica.
  2. ↑ initiated in 1820 at "La Zélée" lodge in Bayonne (La Franc-maçonnerie à Bayonne, 1980)
  3. 1 2 3 4 Thornton, Mark (11 April 2011) Why Bastiat Is Still Great, Mises Institute
  4. 1 2 3 4 Roche III, George Charles (1971). Frédéric Bastiat: A Man Alone. New Rochelle, New York: Arlington House. ISBN 0-87000-116-7.
  5. ↑ Justice and fraternity, in Journal des Économistes, 15 June 1848, pg. 313
  6. ↑ Bastiat, Frédéric [1845] (1996). "Economic Sophisms". Goddard, A. (trans.). Irvington-on-Hudson, NY: The Foundation for Economic Education.
  7. ↑ "Emile Walter" (del Mar, Alexander, pseud.) (1867). What is free trade? An adaptation of Frederick Bastiat's "Sophismes economiques" | Designed for the American reader. New York: G.P. Putnam and Son, repr. Dodo Press, 2009. ISBN 978-1-4099-3812-5
  8. ↑ Bastiat, Frédéric. "Candlemakers' petition" (PDF). Retrieved 2008-12-12.
  9. ↑ "Bastiat: Economic Sophisms, Series 2, Chapter 16". Library of Economics and Liberty.
  10. ↑ Frédéric Bastiat. "The law" (PDF). Retrieved 2015-03-29.
  11. ↑ The Law, at bastiat.org
  12. ↑ "Bastiat-Proudhon Debate on Interest". Praxeology.net. Retrieved 2008-12-02.
  13. ↑ Leroux, Robert. "Political Economy and Liberalism: The Economic Contribution of Frédéric Bastiat" Routledge, 2011, p. 118.
  14. ↑ Roche, Charles George. "Frederic Bastiat: A Man Alone". Arlington House, 1971, p. 153.
  15. 1 2 Bastiat, Frédéric. The Law. Ludwig von Mises Institute, 2007.
  16. ↑ Thornton, Mark. "Frédéric Bastiat as an Austrian Economist." Mises.org.
  17. ↑ "Bastiat: Economic Sophisms, Chapter 13-23".

Further reading

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