Monday, February 11, 2013

SUMMER SNIPPETS: ‘Frederic Bastiat: A Man Alone’

Frederic Bastiat: A Man AloneFrederic Bastiat was the nineteenth century’s great economic populariser of free trade, and probably the most entertaining debunker ever of economic baloney. Here are a few snippets from my summer reading of his biography by George Charles Roche: A Man Alone.

As Bastiat’s fame spread and his arguments favouring free trade appeared in various newspapers and pamphlets throughout France, he immediately became the target for numerous public attacks…  Every half-truth and non-truth imaginable was trotted out by opponents of free trade….
    “Bastiat kept his temper and published refutations of the entire protectionist position, demolishing his opposition with simple language and easily-understood examples. Throughout, Bastiat reflected a sense of humour that illuminated the foibles of his age and which made the hard facts and tight logical analysis of his position far more popular and palatable than the usual grim preaching by reformers  Fredric Bastiat was perhaps the first of the ‘happy libertarians,’ a special breed who are at once a delight to their friends and a thorn in the side of their enemies.”

Bastiat returned to his central themes again and again: the myth of “overproduction”; emphasis up on the interests of the consumer (reminding his readers that we are all consumers); and special emphasis upon the idea that a fundamental harmony pervaded the free market place… Building on Adam Smith [and J.B. Say], Bastiat stressed that fee exchange permitted a division of labour, 
        ‘…which makes it possible for each man, instead of struggling on his own
    behalf to overcome all the obstacles that stand in his way, to struggle
    against only
one, not solely on his own account, but for the
    benefit of his fellow men, who in turn perform the same service for him.’
“Thus, specialisation leads to increased production of those items most desired by consumers, at a price which the consumers themselves are willing to pay.  In free exchange, then, a natural harmony exists between production and consumption, between specialists and consumers of the speciality, provided only that … voluntary choice and free choice prevail.
     “As Bastiat wrote:
        ‘For a man, when he gets up in the morning, to be able to put on a suit of clothes, a piece of land has had to
    be enclosed, fertilized, drained, cultivated, planted with a certain kind of vegetation; flocks of sheep have had
    to feed on it; they have had to give their wool; this wool has had to be spun, woven, dyed, and converted
    into cloth; this cloth has had to be cut, sewn, and fashioned into a garment. And this series of operations
    implies a host of others; for it presupposes the use of farming implements, of sheepfolds, of factories, of coal,
    of machines, of carriages, etc.
        ‘If society were not a very real association, anyone who wanted a suit of clothes would be reduced to
    working in isolation, that is, to performing himself the innumerable operations in this series, from the first
    blow of the pickaxe that initiates it right down to the last thrust of the needle that terminates it.
        ‘But thanks to that readiness to associate which is the distinctive characteristic of our species, these
    operations have been distributed among a multitude of workers, and they keep subdividing themselves more
    and more for the common good to the point where, as consumption increases, a single specialized operation
    can support a new industry. Then comes the distribution of the proceeds, according to the portion of value
    each one has contributed to the total work. If this is not association, I should like to know what is…
         ‘Do not this division of labor and these arrangements, decided upon in full liberty, serve the common good?
    Do we, then, need a socialist, under the pretext of planning, to come and despotically destroy our
    voluntary arrangements, put an end to the division of labor, substitute isolated efforts for co-operative
    efforts, and reverse the progress of civilization?’”

imageThe 1840s in France had spawned a host of enemies for the Bourgeois Monarchy…  Though [the Second Republic]  was finally established under Lamartine, he and his fellow members in the government never recovered from the enormous surprise involved when they found themselves in charge of the French state… 
    “Lamartine had already been a major political figure and a member of the Chamber of Deputies before the February Revolution.  He and Bastiat had ben in correspondence for some three years before the Revolution…  In fact, Lamartine had written to Bastiat shortly before the outbreak of revolution, ‘If ever the storm carries me to Power, you will help me carry out our ideas.’  Bastiat was apparently offered a high position in the new regime, but preferred to retain his freedom of criticism.
    “And criticise he did.  When Lamartine began to make speeches referring to the necessity for fraternity as enforced by government in various social welfare measures, Bastiat immediately rose to the occasion:
        ‘I happened to discuss this question with the eminent gentleman whom the Revolution lifted to such great heights.  I said to him, "Only justice can be demanded from the law, which acts by means of coercion." 
    ‘He thought that people can, in addition, expect fraternity from the law. Last August he wrote me: "If ever, in a time of crisis, I find myself placed at the helm, your idea will be half of my creed."And I reply to him here: "The second half of your creed will stifle the first, for you cannot legislate fraternity without legislating injustice"…
    ‘When, under the pretext of fraternity, the legal code imposes mutual sacrifices on the citizens, human nature is not thereby abrogated. Everyone will then direct his efforts toward contributing little to, and taking much from, the common fund of sacrifices. Now, is it the most unfortunate who gain in this struggle? Certainly not, but rather the most influential and calculating.’
   
“Such frankness was not calculated to make Bastiat a favourite of the new regime.”

Lamartine proposed a national exposition, to be financed by government funds.  He had pointed out how the expenditure of of those government funds would be a tremendous boost to employment, painting a moving picture of all the painted, masons, decorateros, costumers, architects, and all other workmen who would thus find their position improved and who would then be able to provide necessities for themselves and fro their children.  Lamartine concluded his speech to the Assembly amidst cheers and approval, insisting, ‘It is to them that you give these 60,000 francs.’
    “To the Assembly’s cries of ‘Very good!’, Bastiat replied, ‘Very bad!’:
        ‘Yes, it is, at least in part, to the workers in the theatres that the sixty thousand francs in question will go. 
    A few scraps might well get lost on the way.  If one scrutinised the matter closely, one might even discover
    that most of the pie will find its way elsewhere.  The workers will be fortunate if there are a few crumbs left
    for them!  But I should like to assume that the entire subsidy will go to the painters, decorators,
    costumers, hairdressers, etc.
That is what is seen.
        ‘But where does it come from?  This is the other side of the coin, just as important to examine as its face. What
    is the source of those sixty thousand francs?  And where
would they have gone if a legislative vote had not
    first directed them to the Rue de Rivoli and from there to the Rue de Grenelle [i.e., from the tax department to
    the theatrical suppliers in the Left Bank.] 
That is what is not seen.
        ‘Surely, no one will dare maintain that the legislative vote has caused this sum to hatch out from the ballot
    box; that it is a pure addition to the national wealth; that, without this miraculous vote, these sixty
    thousand francs would have remained invisible and impalpable. It must be admitted that all that the
    majority can do is to decide that they will be taken from somewhere to be sent somewhere else, and that
    they will have one destination only by being deflected from another.
        ‘This being the case, it is clear that the taxpayer who will have been taxed one franc will no longer have
    this franc at his disposal. It is clear that he will be deprived of a satisfaction to the tune of one franc, and that
    the worker, whoever he is, who would have procured this satisfaction for him, will be deprived of wages in
    the same amount.
        ‘Let us not, then, yield to the childish illusion of believing that the vote of May 16
adds anything whatever
    to national well-being and employment. It reallocates possessions, it reallocates wages, and that is all…
        ‘When it is a question of taxes, gentlemen, prove their usefulness by reasons with some foundation, but not
    with that lamentable assertion: "Public spending keeps the working class alive." It makes the mistake of
    covering up a fact that it is essential to know: namely, that
public spending is always a substitute for
    private spending, and that consequently it may well support one worker in place of another but adds nothing
    to the lot of the working class taken as a whole. Your argument is fashionable, but it is quite absurd, for
    the reasoning is not correct.’

As he wrote in a troubled moment, ‘… the worst thing that can happen to a good cause is not to be skilfully attacked, but to be ineptly defended.’”

Bastiat was tireless in striking down error wherever it appeared.  He defended the classical economic position as set forth by Thomas Malthus, pointing out that the English economist had far more in mind than the constantly quoted passage in which he had discussed the arithmetic and geometrical qualities of the food supply and the population.  Bastiat understood that Malthus was entirely mistaken about the ultimate prospects for starvation of eth human race, and yet had great merit as a proponent of classical economic principles. Once Bastiat publicly challenged Pierre Leroux, a French philosopher and editor of Le Globe after Leroux had written a chapter against Malthus.  Bastiat … realised as he pursued the point that Leroux did not actually know the work of Malthus.  Never one to do things by half, Bastiat asked, ‘You have refuted Malthus, but have you by any chance read him through from one end to the other?’
    “ ‘I have not read him at all,’ Leroux replied.  ‘His whole system is set forth on one page and can be summed up in his famous arithmetical and geometrical rations.  That’s enough for me.’
    “ ‘Apparently,’ Bastiat said, ‘you care nothing for the public, for Malthus, for the truth, for conscience, for yourself.’”
    “That night, Bastiat wrote:
        ‘This is the way an opinion gains acceptance …  Fifty ignoramuses repeat in chorus some absurd libel that
    has been thought up by an even bigger ignoramus; and, if only it happens to coincide to some slight degree
    with prevailing attitudes and passions, it becomes a self-evident truth.’”

Time was running out for the Second French Republic, and for Frederic Bastiat [who though he had contracted tuberculosis, continued to work feverishly].  Bastiat well knew that the end was in sight, not only for his mortal efforts, but for the sick republic which staggered on toward its rendezvous with the man on horseback: Louis Napoleon.
    “Even as the committee met to draw up the constitution for the Second French Republic, the Republic was expiring.  The Committee for the Constitution itself gave evidence of eth sad state of affairs in France.  Personally acquainted with the members of the committee whose duty it was to draft a new constitution for France, Alexis de Tocqeuville regarded some of them as ‘chimerical visionaries.’  One committee member, Victor Considerant, Tocqueville found especially discouraging: ‘ … he would have deserved to be sent to a lunatic asylum had he been sincere—but I fear he deserved more than that.’  Tocqueville described the other committee members  as being totally unaware of any lasting principles or purposes, totally bewildered at the prospect of deciding the course of action for France:
        ‘All this bore very little resemblance to the men, so certain of their objects and so well acquainted with
the measures necessary to attain them, who sixty years before successfully drew up the American Constitution.’
   
“When it was drawn up, the constitution [for the French Second Republic] proved almost unbelievably complex, guaranteeing a deadlock between President and Assembly, and almost insuring a dictator would step forward to break the impasse.  The would-be dictator was ready at hand.  [Bonaparte’s’ nephew] Louis-Napoleon Bonaparte [known subsequently by the uncomplimentary sobriquet “Napoleon the Little”] had twice attempted inept coups and each tome dismissed with little more than a pat on the head... [Now however] in the balloting for the first President under the new Constitution, so many of the French leaders threw their support to Louis Napoleon, sure that here was a man the politicians could control.  How mistaken they were…
    “In Tocqueville’s phrase, ‘…the world is a strange theatre.  There are moments in it when the worst plays are those which succeed best.  If Louis Napoleon had been a wise man, or a man of genius, he could never have become President of the Republic.’  In perspective, it becomes clear the French were unable to achieve either lasting stability or a free society because they could not cope with their deeply inbred tradition of centralisation…
    “[Within a year Napoleon the Little had dissolved the Legislative Assembly, thrown all opposition members into prison, and proclaimed himself first President-for-Life, then Emperor.] Few Frenchmen were astute enough to recognise what had happened to them.”

Even in the final laps of his race with death, Bastiat found tome to analyse the French political scene and accurately predicted the end of Republican government in France. During June of 1850 he retried to [his home at] Mugron for a few days where he write the most famous and compelling of his books, The Law.  In this work, and in the other pamphlets, letters and essays he write during the last few months of his life, Bastiat described why no society could hope to endure under any political regime that denied freedom to its citizens:
        ‘No society can exist if respect for the law does not to some extent prevail;
    but the surest way to have the laws respected is to make them respectable.
    When law and morality are in contradiction, the citizen finds himself in the
    cruel dilemma of either losing his moral sense or of losing respect for the law,
    two evils of which one is as great as the other, and between which it is
    difficult to choose…
        ‘Unfortunately, the law is by no means confined to its proper role. It is not
   only in indifferent and debatable matters that it has exceeded its legitimate
   function. It has done worse; it has acted in a way contrary to its own end; it
   has destroyed its own object: it has been employed in abolishing the justice which
    it was supposed to maintain, in effacing that limit between rights which it was its mission to respect; it has
    put the collective force at the service of those who desire to exploit, without risk and without scruple, the
    person, liberty, or property of others; it has converted plunder into a right, in order to protect it, and
    legitimate defence into a crime, in order to punish it.’

    “Bastiat analysed the interventionist society point by point, and found it wanting in justice on every hand:
        ‘Alas! I find here so many nascent abuses, so
    many exceptions, so many direct or indirect
    deviations, appearing on the horizon of the new
    social order, that I do not know where to
    begin.

        ‘We have, first of all, licenses of all kinds. No one
    can become a barrister, a physician, a teacher, a
    broker, a dealer in government bonds, a solicitor,
    an attorney, a pharmacist, a printer, a butcher, or
    a baker without encountering legal restrictions.
    Each one of these represents a service that is
    forbidden by law, and hence those to whom
    authorization is granted raise their prices to such a point that the
    mere possession of the license, without the service, often has great value….

        ‘Next comes the attempt to set an artificial price, to receive a supplementary value, by levying tariffs,
    for the most part on necessities: wheat, meat, cloth, iron, tools, etc. This is … a forcible violation of the
    most sacred of all property rights, that to the fruits of one's labour and productive capacities….
        ‘Next comes taxation. It has become a much sought-after means of livelihood. We know that the number
    of government jobs has been increasing steadily, and that the number of applicants is increasing still
    more rapidly than the number of jobs. Now, does any one of these applicants ever ask himself whether he
    will render to the public services equivalent to those which he expects to receive? Is this scourge about to
    come to an end? How can we believe it, when we see that public opinion itself wants to have everything done
    by that fictitious being, the state, which signifies a collection of salaried bureaucrats? After
    having judged all men without exception as capable of governing the country, we declare them incapable
    of governing themselves. Very soon there will be two or three of these bureaucrats around every
    Frenchman, one to prevent him from working too much, another to give him an education, a third to furnish
    him credit, a fourth to interfere with his business transactions, etc., etc. Where will we be led by the illusion
    that impels us to believe that the state is a person who has an inexhaustible fortune independent of ours? …
        ‘I believe we are entering on a path in which plunder, under very gentle, very subtle, very ingenious
    forms, embellished with the beautiful names of solidarity and fraternity, is going to assume proportions
    the extent of which the imagination hardly dares to measure. Here is how it will be done: Under the name
    of the state the citizens taken collectively are considered as a real being, having its own life, its own
    wealth, independently of the lives and the wealth of the citizens themselves; and then each addresses
    this fictitious being, some to obtain from it education, others employment, others credit, others food,
    etc., etc. Now the state can give nothing to the citizens that it has not first taken from them. The only effects
    of its intermediation are … a great dispersion of forces … for everyone will try to turn over as little as
    possible to the public treasury and to take as much as possible out of it. In other words, the public treasury
    will be pillaged. And do we not see something similar happening today? What class does not solicit the favours
    of the state? It would seem as if the principle of life resided in it. Aside from the innumerable horde of its
    own agents, agriculture, manufacturing, commerce, the arts, the theatre, the colonies, and the shipping
    industry expect everything from it. They want it to clear and irrigate land, to colonize, to teach, and
    even to amuse. Each begs a bounty, a subsidy, an incentive, and especially the gratuitous gift of
    certain services, such as education and credit. And why not ask the state for the gratuitous gift of all
    services? Why not require the state to provide all the citizens with food, drink, clothing, and shelter
    free of charge?’
    “And what is the result of thus viewing the law and the state in such a perverted light? Bastiat warned that the price was high, and that the perversion in political terms would finally be a perversion of all social institutions as well, finally destroying society itself:
        ‘The law is no longer the refuge of the oppressed, but the
    arm of the oppressor! The law is no longer a
    shield, but a sword! The law no longer holds a balance in its
    august hands, but false weights and false keys!
    And you want society to be well ordered!
        ‘Your principle has placed these words above the
    entrance of the legislative chamber: "Whosoever
    acquires any influence here can obtain his share of legal
    plunder."
        ‘And what has been the result? All classes have flung
    themselves upon the doors of the chamber, crying:
    "A share of the plunder for me, for me!" …
        ‘And are you not appalled by the immense, radical, and deplorable innovation which will be introduced
    into the world on the day when the law itself is authorized to commit the very crime that it is its function
    to punish—on the day when it is turned, in theory and in practice, against liberty and property?
        ‘You deplore the symptoms that modern society exhibits; you shudder at the disorder that prevails
    in institutions and ideas. But is it not your principle that has perverted everything, both ideas and institutions?’
    “Thus Bastiat perceived the cycle.  Undue government intervention in the lives of men inevitably produces legalised injustice, which leads to a lack of respect for the law, indeed for all authority and institutions.  An immoral social order breeds immoral citizens.  Soon the social fabric itself disintegrates…  He warned that political power was the cause of France’s social decline and could never provide solutions to the problem…
        ‘…there is only one remedy: time. People have to learn, through hard experience, the enormous
    disadvantage there is in plundering one another….
        ‘And this goes on until the people learn to recognize and defend their true interests. Thus, we always reach
    the same conclusion: The only remedy is in the progressive enlightenment of public opinion.’”

When a man has spent his first forty-five years in solitude and quiet preparation, only a crisis which he regards as vitally important will cause him to leave that self-imposed isolation.  For Frederic Bastiat, that crisis was the rampant socialism that so savagely attacked his native France.  And the crisis was sufficiently pressing upon Bastiat that, once he had entered the fray, he drove himself unmercifully to devote all his energies to the task at hand.  His last major work was to be Economic Harmonies, a sustained intellectual effort that literally consumed his life… One great idea filled his mind:
        ‘Men’s interests, rightly understood, are harmonious with one another,
        ‘Men's interests, rightly understood, are harmonious with one another, and the inner light that reveals them
    to men shines with an ever more vivid brilliance. Hence, their individual and collective efforts, their
   experience, their gropings, even their disappointments, their competition—in a word, their freedom—make
    men gravitate toward that unity which is the expression of the laws of their nature and the consummation of
    the common good.’

It was also during these last months that Bastiat write the famous pamphlet “What is Seen and What is Not Seen.” Tragically, Bastiat has lost the entire manuscript during a period when he was relocating his household.  After a careful but unsuccessful search, he decided that the pamphlet was of such importance that it deserved being done again.  This second manuscript did not suit him, and he threw it into the fire.  So he wrote “What is Seen and What is Not Seen” for yet a third time, and this is the form in which we know this classic.”

“[Writing about the future of France] he pointed out that the entire population of France, particularly the poor, had been led to believe that government could somehow satisfy all their needs and desires.  A great “war on poverty” had been promised the French people.  Bastiat warned that the government could not possibly alleviate poverty, since it was government intervention that had caused the hardships:
        ‘Take from some to give to others! I know that this is the way things have been going for a long time.
    But, before contriving, in our effort to banish poverty, various means of putting this outlandish principle
    into effect, ought we not rather to ask ourselves whether poverty is not due to the very fact that this principle
    has already been put into effect in one way or another? Before seeking the remedy in the further disturbance
    of the natural law of society, ought we not first to make sure that these disturbances are not themselves the
    very cause of the social ills that we wish to cure?’
    “Bastiat recognised that a great political revolution had taken place that had given power into the hands of ‘the people.’  He warned that the precedent had already been too well established by the upper classes [represented by the ‘right’ of the Assembly] of feathering their own nest at the expense of others.  Such ideas were sure to spread to the lower classes [[represented by those on the Assembly’s left], producing the ugly spectacle of a society in which everyone was attempting to live at the expense of everyone else.  Soon all classes demand special privileges.  In the absurd rhetoric of the socialist demagogue, such a system is presumably fraternal and egalitarian, with total justice for all concerned:
        ‘And is not this the point that we have now reached? [he wrote.] What is the cry going up everywhere, from
    all ranks and classes? All for one! When we say the word one, we think of ourselves, and what we demand is
    to receive an unearned share in the fruits of the labour of all. In other words, we are creating an organized
    system of plunder. Unquestionably, simple out-and-out plunder is so clearly unjust as to be repugnant to us;
    but, thanks to the motto, all for one, we can allay our qualms of conscience. We impose on others the duty
    of working for us. Then, we arrogate to ourselves the right to enjoy the fruits of other men's labour. We call
    upon the state, the law, to enforce our so-called duty, to protect our so-called right, and we end in the
    fantastic situation of robbing one another in the name of brotherhood. We live at other men's expense, and
    then call ourselves heroically self-sacrificing for so doing. Oh, the unaccountable folly of the human mind! Oh,
    the deviousness of greed! It is not enough that each of us tries to increase our share at the expense of others; it
    is not enough that we want to profit from labour that we have not performed. We even convince ourselves that
    in the process we are sublime examples of self-sacrifice… We have become so blind that we do not see that the
    sacrifices that cause us to weep with admiration as we contemplate ourselves are not made by us at all, but are
    exacted by us of others.’”

Bastiat Collection Pocket Edition

Labels: ,

2 Comments:

Anonymous Anonymous said...

Let's see: Bastiat followed and expiated upon Say, and he inspired Hazlitt.

I'm not sure there can be higher praise than that. Am I missing anything?

Craig

2/11/2013 11:04:00 pm  
Anonymous J Cuttance said...

I waited until I had a free evening to read this excellent piece. What a clear-thinking and eloquent person he was.

2/14/2013 08:50:00 pm  

Post a Comment

Respond with a polite and intelligent comment. (Both will be applauded.)

Say what you mean, and mean what you say. (Do others the courtesy of being honest.)

Please put a name to your comments. (If you're prepared to give voice, then back it up with a name.)

And don't troll. Please. (Contemplate doing something more productive with your time, and ours.)

<< Home