MAY 01, 1973 by FREDERIC BASTIAT
Editor’s Note: Elsewhere in this issue, the Right Honorable J. Enoch Powell, Member of Parliament in Britain, discusses the political implications of "the common market." Not only in Britain and other European countries but in the United States as well, the growth of state welfarism and debt-backed inflation is building into a tidal wave of protectionism.
There have been such waves before, as in the France of 1847 when Frederic Bastiat was doing his best to build the case for free trade. The following explanation, based upon Defoe’s story of Robinson Crusoe, is excerpted from Economic Sophisms by Bastiat. It is well worth reading and pondering in 1973.
"Explain to me the functioning and the effects of protectionism."
"That is not so easy. Before considering the more complicated cases, one should study the simpler ones."
"Take the simplest case you wish."
"You remember how Robinson Crusoe managed to make a board when he had no saw?"
"Yes. He cut down a tree; then, by trimming the trunk, first on one side and then on the other, with his axe, he reduced it to the thickness of a plank."
"And that cost him a great deal of labor?"
"Two full weeks."
"And what did he live on during that time?"
"On his provisions."
"And what happened to the axe?"
"It became very dull as a result."
"Quite right. But perhaps you do not know this: just as he was about to strike the first blow with his axe, Robinson Crusoe noticed a plank cast up on the beach by the waves."
"Oh, what a lucky accident! He ran to pick it up?"
"That was his first impulse; but then he stopped and reasoned as follows:
"’If I go to get that plank, it will cost me only the exertion of carrying it, and the time needed to go down to the beach and climb back up the cliff.
"Tut if I make a plank with my axe, first of all, I shall be assuring myself two weeks’ labor; then, my axe will become dull, which will provide me with the job of sharpening it; and I shall consume my provisions, making a third source of employment, since I shall have to replace them. Now, labor is wealth. It is clear that I shall only be hurting my own interests if I go down to the beach to pick up that piece of driftwood. It is vital for me to protect my personal labor, and, now that I think of it, I can even create additional labor for myself by going down and kicking that plank right back into the sea!’ "
"What an absurd line of reasoning!"
"That may be. It is nonetheless the same line of reasoning that is adopted by every nation that protects itself by interdicting the entry of foreign goods. It kicks back the plank that is offered it in exchange for a little labor, in order to give itself more labor. There is no labor, even including that of the customs official, in which it does not see some profit. It is represented by the pains Robinson Crusoe took to return to the sea the present it was offering him. Consider the nation as a collective entity, and you will not find an iota of difference between its line of reasoning and that of Robinson Crusoe."
"Did he not see that he could devote the time he could have saved to making something else?
"As long as a person has wants to satisfy and time at his disposal, he always has something to do. I am not obliged to specify the kind of work he could undertake to do."
"I can certainly specify precisely the kind that probably escaped his attention."
"And I maintain, for my part, that, with incredible blindness, he confused labor with its result, the end with the means, and I am going to prove it to you…."
"You do not have to. The fact still remains that this is an illustration of the system of restriction or interdiction in its simplest form. If it seems absurd to you in this form, it is because the two functions of producer and consumer are here combined in the same individual."
"Let us therefore proceed to a more complicated case."
"Gladly. Some time later, after Robinson had met Friday, they pooled their resources and began to co-operate in common enterprises. In the morning, they hunted for six hours and brought back four baskets of game. In the evening, they worked in the garden for six hours and obtained four baskets of vegetables.
"One day a longboat landed on the Isle of Despair. A handsome foreigner disembarked and was admitted to the table of our two recluses. He tasted and highly praised the products of the garden, and, before taking leave of his hosts, he addressed them in these words:
"’Generous islanders, I dwell in a land where game is much more plentiful than it is here, but where horticulture is unknown. It will be easy for me to bring you four baskets of game every evening if you will give me in exchange only two baskets of vegetables.’
"At these words, Robinson and Friday withdrew to confer, and the debate they had is too interesting for me not to report it here in full.
"Friday: Friend, what do you think of it?
"Robinson: If we accept, we are ruined.
"F.: Are you quite sure of that? Let us reckon up what it comes to.
"R.: It has all been reckoned up, and there can be no doubt about the outcome. This competition will simply mean the end of our hunting industry.
"F.: What difference does that make if we have the game? "R.: You are just theorizing! It will no longer be the product of our labor.
"F.: No matter, since in order to get it we shall have to part with some vegetables!
"R.: Then what shall we gain?
"F.: The four baskets of game cost us six hours of labor. The foreigner gives them to us in exchange for two baskets of vegetables, which take us only three hours to produce. Therefore, this puts three hours at our disposal.
"R.: You ought rather to say that they are subtracted from our productive activity. That is the exact amount of our loss. Labor is wealth, and if we lose one-fourth of our working time, we shall be one-fourth less wealthy.
"F.: Friend, you are making an enormous mistake. We shall have the same amount of game, the same quantity of vegetables, and — into the bargain — three more hours at our disposal. That is what I call progress, or there is no such thing in this world.
"R.: You are talking in generalities! What shall we do with these three hours?
"F.: We shall do something else.
"R.: Ah! I have you there. You are unable to mention anything in particular. Something else, something else — that is very easy to say.
"F.: We can fish; we can decorate our cabin; we can read the Bible.
"R.: Utopia! Who knows which of these things we shall do, or whether we shall do any of them?
"F.: Well, if we have no wants to satisfy, we shall take a rest. Is not rest good for something?
"R.: But when people lie around doing nothing, they die of hunger.
"F.: My friend, you are caught in a vicious circle. I am talking about a kind of rest that will subtract nothing from our supply of game and vegetables. You keep forgetting that by means of our foreign trade, nine hours of labor will provide us with as much food as twelve do today.
"R.: It is very clear that you were not brought up in Europe. Had you ever read the Moniteur industriel, it would have taught you this:’All time saved is a dead loss. What counts is not consumption, but production. All that we consume, if it is not the direct product of our labor, counts for nothing. Do you want to know whether you are rich? Do not measure the extent of your satisfactions, but of your exertion.’ This is what the Moniteur industriel would have taught you. As for myself, being no theorist, all I see is the loss of our hunting.
"F.: What an extraordinary inversion of ideas! But…. "
R.: But me no buts. Moreover, there are political reasons for rejecting the selfish offers of the perfidious foreigner. "
F.: Political reasons!
"R.: Yes. First, he is making us these offers only because they are advantageous to him.
"F.: So much the better, since they are so for us too.
"R.: Then, by this traffic, we shall make ourselves dependent upon him.
"F.: And he will make himself dependent on us. We shall have need of his game; and he, of our vegetables; and we shall all live in great friendship.
"R.: You are just following some abstract system! Do you want me to shut you up for good?
"F.: Go on and try. I am still waiting for a good reason.
"R.: Suppose the foreigner learns to cultivate a garden, and that his island is more fertile than ours. Do you see the consequence?
"F.: Yes. Our relations with the foreigner will be severed. He will no longer take our vegetables, since he will have them at home with less labor. He will no longer bring us game, since we shall have nothing to give him in exchange, and we shall then be in precisely the same situation that you want us to be in today.
"R.: Improvident savage! You do not see that after destroying our hunting industry by flooding us with game, he will destroy our gardening industry by flooding us with vegetables.
"F.: But this will happen only so long as we shall be in a position to give him something else, that is to say, so long as we shall be able to find something else to produce with a saving in labor for ourselves.
"R.: Something else, something else! You always come back to that. You are up in the clouds, my friend; there is nothing practical in your ideas.
"The dispute went on for a long time and left each one, as often happens, unchanged in his convictions. However, since Robinson had great influence over Friday, he made his view prevail; and when the foreigner came to learn how his offer had been received, Robinson said to him:
"’Foreigner, in order for us to accept your proposal, we must be very sure about two things:
"’First, that game is not more plentiful on your island than on ours; for we want to fight only on equal terms.
"’Second, that you will lose by this bargain. For, as in every exchange there is necessarily a gainer and a loser, we should be victimized if you were not the loser. What do you say?’
"’Nothing,’ said the foreigner. And, bursting into laughter, he re-embarked in his longboat."
For further discussion of the Bastiat philosophy of free trade see: The Tariff Idea by W. M. Curtiss 80 pages $1.00
Also, for a better understanding of the close relationship between protectionism and inflation, see:
What You Should Know About Inflation by Henry Hazlitt 152 pages $.95
What Has Government Done to Our Money? by Murray N. Rothbard 49 pages $1.25
All available from
THE FOUNDATION FOR ECONOMIC EDUCATION
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