Part 5 - Frederic Bastiat
Once the American Republic was up and running, several challenges presented themselves to the American people. The constraints of the Constitution were too easily exceeded for popular causes, as the beast apparently contained by James Madison and colleagues proved adept at expanding itself in a series of democratic orgies.
The Law and Other Essays
Frederic Bastiat (1801-1850) was a French statesman, philosopher and economist. After Karl Marx wrote the Communist Manifesto in 1848, Frederic Bastiat wrote his most well-known work, The Law, in 1850—the year of his death. It was a shining light for freedom, in a new Europe where socialism was in the process of taking over everything. It is even more important and relevant today than it was then.
Bastiat’s thesis in The Law was simple—the law stops protecting people when it begins to transfer wealth. According to Bastiat, the primary purpose of law is to protect people and the fruits of their labor (property, after Locke). This protection mechanism fails when the law is used to force, at the point of a gun, the transfer of wealth from those who produce it to those who don’t. Marx’s socialist tide gained popularity in Europe and later, the U.S. There’s nothing like the promise of a free lunch to get voters and politicians excited about something. When somebody else appears to be paying the bill, government jobs, government contracts, government regulations (“protecting industries”) and government everything else seems like a good deal. You will see why this ultimately doesn’t work when I get to Henry Hazlitt, the last of our freedom builders.
Here’s an excerpt from the beginning of Bastiat’s The Law, which points out that collective rights depend entirely on individual rights:
Each of us has a natural right—from God—to defend his person, his liberty, and his property. These are the three basic requirements of life, and the preservation of any one of them is completely dependent upon the preservation of the other two. For what are our faculties but the extension of our individuality? And what is property but an extension of our faculties? If every person has the right to defend even by force—his person, his liberty, and his property, then it follows that a group of men have the right to organize and support a common force to protect these rights constantly. Thus the principle of collective right—its reason for existing, its lawfulness—is based on individual right. And the common force that protects this collective right cannot logically have any other purpose or any other mission than that for which it acts as a substitute. Thus, since an individual cannot lawfully use force against the person, liberty, or property of another individual, then the common force—for the same reason—cannot lawfully be used to destroy the person, liberty, or property of individuals or groups.Bastiat wrote many things relevant in today’s world, including essays criticizing the popular practice of mercantilism (government subsidy of business) as did Adam Smith in his famous Wealth of Nations. Legislatures are ever suckers for giving public monies to some private enterprise or individual, hoping to “stimulate the economy,” but all these ever do is simply make the recipients weak, inefficient and dependent on government aid, as with social and other well-intended, but misguided, programs.
In an essay called Abundance and Scarcity, Bastiat, with sarcastic humor, pointed out that when workers or businesses lobby for restrictions on trade, what they are really doing is displaying their fear of abundance and celebrating scarcity:
How does it happen that in the eyes of workers, of publicists and of statesmen, abundance seems dangerous and scarcity advantageous? I propose to trace this illusion to its source.In Money Prices, Bastiat said,
We observe that a man acquires wealth in proportion as he puts his labor to better account, that is to say, he sells at a higher price. He sells at a higher price in proportion to the shortage, the scarcity, of the type of commodity produced by his labor. …we conclude from this that scarcity enriches him.
The same holds true for abundance. We observe that, when a product is plentiful, it sells for a low price; thus, the producer earns less. If all producers are in this plight, they are all poverty-stricken; hence, it is abundance that ruins society.
Do you wish to decide between trade and protectionism? Do you wish to appreciate the significance of an economic phenomenon? Inquire into the extent of its affects upon abundance or scarcity of commodities, and not upon a rise or fall in prices. …Beware of thinking in terms of money prices; they will lead you into an inextricable labyrinth.Bastiat's brilliant and logical defense of property under the law made him one of the most passionate, articulate and effective advocates of human freedom I have ever known. But to my knowledge, he never proposed the controversial tactic for which our next builder, Henry David Thoreau, is remembered.
Is it not true that restrictive measures, by impeding change, by limiting the division of labor, by forcing workers to compensate for hardships due to geographic situation and climatic conditions, ultimately diminish the quantity produced by a given amount of labor? And what difference does it make that the lesser quantity produced under the protective system has the same nominal value as the greater quantity produced under conditions of free trade? Man does not live on nominal values, but on commodities actually produced; and the more he has of these quantities, regardless of their price, the richer he is.
Government is the great fiction by which everybody expects to live at the expense of everybody else - Frederic Bastiat
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