A Reviewer's Notebook - 1969/8
AUGUST 01, 1969 by JOHN CHAMBERLAIN
It is a sobering experience to read Dean Russell’s Frederic Bastiat: Ideas and Influence (Foundation for Economic Education, $2). Not that Mr. Russell’s intellectual biography of the great French pioneer of the "freedom philosophy" lacks its exhilarating moments. Bastiat had his triumphs, many of which came after his premature death in 1850 of tuberculosis. Under the Second Empire of Louis Napoleon French commercial policy took a more liberal turn (ironic, inasmuch as the Second Empire was essentially a dictatorship). It was Bastiat’s influence that caused the Emperor of the French to draw back from the extreme protectionist policy that had been the rule ever since the first Napoleon. But the "interventionist" fallacies which Bastiat exposed in many a witty parable have as many lives as a thousand cats, and the sobering quality of Mr. Russell’s book derives from the obvious parallels that may be drawn between early nineteenth century France and the present day in both England and the U.S.
When Bastiat went up to Paris from his childhood home at Mugron in southwestern France, it was the time of Louis Blanc, the socialist, and Proudhon, the anarchist. Marx had not yet succeeded in evolving what he called "scientific socialism" (a contradiction in terms if there ever was one), but socialist ideas were in the air nevertheless. Blanc believed the State owed every man a living, and he had organized the movement for National Workshops. Well, it was just a few months back that Senators Eugene McCarthy and Abe Ribicoff were telling us that it is the duty of government to become the "employer of last resort" if people can’t find jobs in the free enterprise system. The fact that Bastiat had exposed all sorts of government compulsions as a drag on job-creating production and consumption has yet to penetrate large areas of the modern consciousness. But what a prophet Bastiat was!
Writing about Bastiat’s career as a legislator, Dean Russell quotes the Bastiat "Law of Bureaucracy."
Said Bastiat, "I am a firm believer in the ideas of Malthus when it comes to bureaucrats. For their expansion in numbers and projects is fixed precisely by Malthus’ principle that the size of the population is determined by the amount of the available food. If we vote 800 million francs for government services, the bureaucrats will devour 800 million; if we give them two billion, they will immediately expand themselves and their projects to the full amount." These words date back to December of 1849, which means that what we now know as Parkinson’s Law was formulated by Bastiat a century and more before Parkinson told us that the bureaucrat’s work always expands to fill the time available to do it.
Bastiat, the Economist
Dean Russell does not make any exaggerated claims for Bastiat’s originality as an economist. After all, the ideas which Bastiat expressed in his major work, Harmonies of Political Economy, had been present for the most part in Adam Smith and Jean Baptiste Say. Say’s famous "law of markets," which emphasizes the truism that production creates its own purchasing power (in wages, interest, and dividends), is simply a statement of the "harmony of interests" that is the result of a free-market. And Adam Smith’s figure of the "invisible hand" is Bastiat in a metaphor.
The prime virtue of Bastiat as an economist resided in his style, which turned the "dismal science" into something full of life and sparkle. Beyond that, Dean Russell thinks Bastiat’s greatest contribution was as a theorist of government. Actually, Bastiat did not go much beyond Adam Smith in his definition of the duties of the State. He thought government should be limited to providing the courts, the police, and the money system needed to guarantee equal justice to all. Well, Adam Smith had said before Bastiat that governments were instituted among men to provide cheapness, safety, and health, which meant that there must be a free economy (to keep prices low), a good police force and adequate preventive measures to keep the environment clean. But Bastiat, with his genius for the sardonic turn of phrase, summed up the case for the anti-statists in words that will never be forgotten when he remarked that "the State is the great fiction by which everybody tries to live at the expense of everybody else." Herbert Spencer was never able to beat that for memorable verbalization, and only the late Isabel Paterson, among moderns, has come close to Bastiat when it comes to giving anti-interventionist ideas an epigrammatic turn.
Before I knew anything of Bastiat I was impressed by Mrs. Paterson’s statement that the Reconstruction Finance Corporation, a Hoover Republican idea, was the inevitable precursor of the Rooseveltian Works Progress Administration. Said Mrs. Paterson, when the RFC tried to bail out U.S. corporations in the 1929-32 period, "You can’t put J. P. Morgan on the dole and keep poor people from demanding their share." And, of course, it turned out just that way. But Mrs. Paterson’s wisdom was simply a restatement of Bastiat’s warning to the "upper classes" of France. In his Harmonies of Political Economy Bastiat had chastised the upper classes for setting a "fatal example for the masses." "Have they not," so Bastiat wrote of the upper classes,.. had their eyes turned perpetually toward the public treasury? Haven’t they always tried to secure from government more special privileges for themselves as manufacturers, bankers, mine owners, land owners? Haven’t they even gotten subsidies from the public treasury for their ballets and operas?… And yet they are astonished and horrified when the masses adopt the same course! When the spirit of greed has for so long infected the wealthy classes, how can we expect it not to be adopted by the suffering masses?"
Proponent of Free Trade
Dean Russell is especially good in showing how Bastiat became the link between the early successes of Richard Cobden and the Anti-Corn Law League in England and the work of Michel Chevalier in converting the government of the French Second Empire to a moderate tariff policy. Bastiat, the friend of Cobden, had never been able to combat the anti-English prejudices of his own countrymen during his lifetime. Realizing that the French masses would never adopt an English idea, Cobden had warned Bastiat that free trade must first be sold in France to an intellectual and governmental elite. But Bastiat was a popularizer, and hence constitutionally unable to resist making a mass appeal. Unable to stir either the masses or the elite to accept free trade, he left it up to his disciple, Michel Chevalier, to move the legislators and the elite of a later period to turn things around.
Bastiat’s ideas were in the ascendancy in the 1850-1914 period; even in protectionist America the free traders kept forcing the issue until they achieved a victory with the Wilsonian Underwood Tariff. After World War I, however, mercantilist ideas came back into vogue. There were Keynes in England, the New Deal in the U.S., Hjalmar Schacht in Germany. Things haven’t improved since World War II. But Bastiat’s principles are incontrovertible, for the "freedom philosophy" is in accord with man’s instinct for life. As the 1968 events in Czechoslovakia proved, the demand for freedom will re-emerge in the most unpromising places. It can be suppressed with bayonets, but the men with the bayonets cannot force a society to produce beyond the subsistence point. Bastiat will have his great revival when the world has had enough of the high-cost measures that intervention and protectionism entail.
THE ECONOMY OF CITIES by Jane Jacobs (New York: Random House, 1969, 268 pp., $5.95)
Reviewed by Robert M. Thornton
Cities came first, declares Jane Jacobs; urban man antedates the farmer; agriculture and animal husbandry were "invented" in prehistoric cities and "exported" to rural areas when cities grew crowded. Similarly with industry, for do we not see manufacturing plants, the latest "export" of cities, moving into the countryside? This matter of priority is important, for cities, according to Mrs. Jacob’s thesis, are the rejuvenating or reproductive element of the whole economy. As go the cities, so goes the nation. Hence the importance of understanding just what makes cities rise and prosper. The answer, Mrs. Jacobs continues, is the emergence of new enterprises with opportunities for men to work, repeated not once but many times over and over. When cities fail to do this (Detroit, Pittsburgh, and New York are some of the examples she offers), they stagnate and the whole economy slides into a decline.
What is needed to revive the decaying cities of our nation? Not massive injections of money; for while money is needed, creativity is more important—entrepreneurs with new ideas for using wealth to create more wealth. (The same is true of "underdeveloped" nations and minority groups; they could generate their own capital by creating new work.) To whom do we look for the creation of new work? Not so much to large, well-established companies as to small companies and new companies not bound by the old ways of doing things or the sterile divisions of labor that often go with mass production of undifferentiated goods and services. One is reminded of Gerald Heard when Mrs. Jacobs speaks of the dangers of overspecialization and super efficiency.
Look what happened to the ants with their strict division of labor!
What do we do? Well, in one sense, we can do nothing. Mrs. Jacobs, like F. A. Hayek, understands that you do not just put a city together like a child playing with building blocks. Rather you try to set up the right conditions which will permit, and even encourage, a city to grow more prosperous, trusting to human creativity for the rest. What are some of the conditions? Mrs. Jacobs explains that "enterprises serving city consumers flourish most prolifically where the following four conditions are simultaneously met: (1) different primary uses, such as residences and working places, must be mingled together, insuring the presence of people using the streets on different schedules but drawing on consumer goods and services in common; (2) small and short blocks; (3) buildings of differing ages, types, sizes and conditions of upkeep, intimately mingled; and (4) high concentrations of people."
Eight years ago, in her The Death and Life of Great American Cities (reviewed in THE FREEMAN January, 1962), Jane Jacobs took a lonesome stand in opposition to city planning and critical of "the Federal bulldozer." Now, once again, she takes a solitary position startlingly different from most of those who proffer diagnoses of urban malaise. Implicit in the whole book is the idea, familiar to readers of THE FREEMAN, that where government or unions or business have the power to restrict competition or in any way thwart new ways of doing things, there will eventually be stagnation. What puzzles the reader is why Mrs. Jacobs fails to come out and say it plain and clear, especially with regard to government. No monopoly, business or union, can exist without at least the tacit approval of the political powers. But whatever the reason, libertarians and conservatives may rejoice that still another book, and a most fascinating and unusual one, is added to the stack of volumes defending individual liberty and the free market against central planning by the State.
FREE SPEECH AND PLAIN LANGUAGE by Albert Jay Nock (Freeport, N. Y.: Books for Libraries Press, 1968, 343 pp., $9.50)
THE BOOK OF JOURNEYMAN by Albert Jay Nock (Freeport, N. Y.: Books for Libraries Press, 1967, 114 pp., $6.50)
Reviewed by Robert M. Thornton
Admirers of the late Albert Jay Nock—editor of THE FREEMAN, 1920-24—will be pleased that two of his long out-of-print books have been republished. Free Speech and Plain Language, a collection of essays issued in 1937, includes the morale-raising "Isaiah’s Job." The short pieces which comprise The Book of Journeyman were first published by the New Freeman in 1930. Nock, a first rate social critic, was chiefly interested in the quality of civilization in the United States; this is the theme that knits together most of these essays.
A truly civilized society, Nock contends, encourages the full collective expression of all five social instincts—the instincts of expansion and acquisition, of religion and morals, of beauty and poetry, of social life and manners, and of intellect and knowledge—and permits none to predominate at the expense of the rest. When a society goes on the rocks, as they’ve all done sooner or later, it is the collective overstress of one or more of these fundamental insights that wrecked it.
Nock indicted American society for leaving "the claim of too many fundamental instincts unsatisfied; in fact, we are trying to force the whole current of our being through the narrow channel set by one instinct only, the instinct of workmanship; and hence our society exhibits an extremely imperfect type of intellect and knowledge, an extremely imperfect type of religion and morals, of beauty and poetry, of social life and manners." The trouble with our civilization, then, is that "it makes such limited demands on the human spirit; such limited demands on the qualities that are distinctly and properly humane, the qualities that distinguish the human being from the robot on the one hand and the brute on the other."
Nothing can be done about this problem unless people acquire a brand-new ethos: "We have hopefully been trying to live by mechanics alone, the mechanics of pedagogy, of politics, of industry and commerce; and when we find it can not be done and that we are making a mess of it, instead of experiencing a change of heart, we bend our wits to devise a change in mechanics, and then another change, and then another." But "it is the spirit and manners of a people, and not the bewildering multiplicity of its social mechanisms, that determines the quality of its civilization."
A thorough reading of Nock’s social criticism gives an excellent perspective on the age we live in; it may help us understand why so many of the young are disgruntled with life as they see it lived in this nation today. Nock is the most charming of writers, and has proved a better prophet than many of his highly touted contemporaries.