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Thursday, September 29, 2016

Bastiat for the Ages

He left behind him enough journalism to fill seven volumes — much of it, like all the best intellectual journalism, timeless, as relevant today as it was in the Paris of more than 150 years ago.

It was back in 1962, as I recall, when I was 15 years old, and a junior in high school, that I first read something by a French writer on free trade whose name, my friends and I thought at first, would probably be pronounced “Frederick BAHS-tee-aht.” Since several of us were enrolled in Madame Wall’s beginning French class that semester, it didn’t take us too long to discover that his name was probably closer to “Frayed-air-EEK Bah-STYAH.” But his ideas fascinated us all the same, as did the organization whose free pamphlets included Bastiat’s arguments against tariffs and other government-imposed impediments to commerce — an organization called the Foundation for Economic Education.

He was certainly a remarkable writer — uncommonly lucid, extraordinarily clever, a real find.The Foundation for Economic Education (FEE) had been founded just after the end of World War II, by a radicalized former chamber of commerce executive named Leonard Read. The late George Roche III, who spent the last three decades of the last century as president of Hillsdale College in Michigan, published a very readable and useful biography of Bastiat back in 1971, in which he writes, “Leonard Read … rescued Bastiat from the historical ash-heap.” Read, according to Roche’s account, “was among the first to realize the enormous importance of Frédéric Bastiat.”

My friends and I, back in 1962, thought Bastiat seemed pretty important. He was certainly a remarkable writer — uncommonly lucid, extraordinarily clever; a real find. But we were unable, in that pre-Internet age, to locate much of anything in the way of biographical information about him. And the problem wasn’t just that there was no Internet in 1962.

Nothing much had been published on Bastiat in any form in 1962. It would be seven more years, in 1969, when Dean Russell would publish his book Frédéric Bastiat: Ideas and Influence, the first book-length treatment of Bastiat ever published in English — and it was published, unsurprisingly, by FEE. Roche’s book, Frédéric Bastiat: A Man Alone, came two years later, in 1971.

Bastiat, as it turned out, was born a little more than two hundred years ago, at the very beginning of the nineteenth century. Some accounts give his birthdate as June 29, 1801, but Russell and Roche, the most authoritative sources on Bastiat for an English-speaking audience, both report that his actual date of birth was the last day of the month, June 30, 1801.

His Life

He was born in Bayonne, a seaport in southwestern France, near the Bay of Biscay. His family was prosperous, having enjoyed substantial success as importers and bankers. He went into the family business himself for a few years in his late teens and early twenties, but he had no obvious aptitude for it, and, when he inherited his grandfather’s country estate in 1825, at the age of 24, he settled into the routine and the lifestyle of a gentleman farmer. He devoted himself to scholarship, chiefly in political economy, on account of questions that had been raised in his mind by his own brief experience in business. He employed others to run his affairs and prospered by doing so.

For the next 20 years, this is how he lived — reading in political economy in French, English, and Italian (the three languages that Bastiat could call his own), thinking, making notes, and gradually perfecting his understanding of what Ludwig von Mises would later call praxeology, the principles underlying human action.

Then, one day in the late 1830s, when Bastiat was himself in his late thirties, he began reading in English newspapers about an extraordinary new organization called the Anti–Corn Law League. It was operated by a Manchester businessman-turned-political-activist named Richard Cobden, and it sought to end protectionist policies in the United Kingdom and replace them with truly free trade with all nations. Cobden believed that this would weave stronger commercial bonds with other states and would virtually guarantee ongoing peace with those other states.

Bastiat was impressed. He had reached identical conclusions about the benefits of removing government-imposed barriers to trade. But he had never considered actually attempting to win implementation of such ideas. Cobden was undertaking just such an attempt. And, as Bastiat continued to follow the activities of the Anti–Corn Law League over the next few years, it became clear to him that Cobden was enjoying a considerable degree of success with his efforts. None of this was being covered or discussed at all in the newspapers in France.

Bastiat believed the French public needed to be informed of what was happening in England. He also believed they should be informed of the reasons tariffs prevented them from enjoying as high a standard of living as they could enjoy. To that end, he had become a part-time journalist, writing on economic issues for daily and weekly papers and for monthly magazines, mostly in Paris. 

Going to England

Now he packed up and went to England, and met and befriended Richard Cobden and interviewed him at length about his ideas and his activities. He interviewed others as well. Then he came back to France and wrote a book.

The book was called Cobden et la LigueCobden and the League. It was published in 1845, when Bastiat was not quite 44 years old. As Jim Powell tells the tale in the chapter on Bastiat in his book The Triumph of Liberty, Cobden and the League “scooped all other French journalists.” It certainly redoubled demand for Bastiat’s articles, twenty-two of which he collected into yet another book, Economic Sophisms, for publication later that same year.

By 1846, Bastiat had become editor of his own paper, Le Libre-Échange — the Free Exchange. By then he had also begun touring France extensively, giving lectures and speeches and trying to raise money for the new Free Trade Association, patterned after Cobden’s Anti–Corn Law League.

George Roche tells us that Bastiat’s articles and books had begun to be “printed abroad in several languages,” and that he now regularly “received invitations to speak across the European continent.” And by early 1848, according to Roche, when Bastiat was still only 46 years old, he was “publishing a weekly newspaper,” the French Republic, which he had opened virtually the day after his previous weekly, the Free Exchange, had ceased publication. He was also “speaking at meetings, corresponding with new free-trade associations which were forming in the provinces, [and] writing letters and controversial articles in three different journals.”

He left behind him enough journalism to fill seven volumes.But the end was in sight. Bastiat had contracted tuberculosis and could somehow never find the time to do the resting his physicians told him was essential to any sort of full recovery. Instead, he gradually wasted away. Looked at from any point of view outside his own, it was as though he were consumed from within. Little wonder that in the nineteenth century tuberculosis was commonly referred to as “consumption.” Bastiat was entirely consumed by Christmas 1850; he passed away on December 24 of that year, at the age of 49.

He left behind him enough journalism to fill seven volumes — much of it, like all the best intellectual journalism, timeless, as relevant today as it was in the Paris of more than 150 years ago.

“This is the way an opinion gains acceptance in France,” Bastiat wrote. “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.”

Could any other description fit more precisely with the way in which it quickly became a self-evident truth that our current economic crisis here in the United States was caused by insufficient regulation of the financial sector? Talk about “absurd libels” and chorusing ignoramuses!

“We know,” Bastiat wrote,

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… 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?… 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?

These words were written early in 1850; with only one small change — the substitution of the word “American” for the word “Frenchman” — they might have been written any time in the last couple of years.

And Bastiat knew back in 1850 the answer to his question, “Where will we be led by the illusion… that the state is a person who has an inexhaustible fortune independent of ours?”

He wrote that

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.

Yet, Bastiat thundered,

What class does not solicit the favors 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?

Bastiat famously said that “the state is that great fiction by which everyone tries to live at the expense of everyone else.” And for this situation, he maintained, “there is only one remedy: time. People have to learn, through hard experience, the enormous disadvantage there is in plundering one another.” In another place, he wrote that “the only remedy is in the progressive enlightenment of public opinion.”

Bastiat did much himself to enlighten public opinion. Thanks to Leonard Read, he continues to do so. He was, as Friedrich Hayek once put it, “a publicist of genius.” He had that rarest of talents — the talent for high-quality popularization. He could write clearly and persuasively about complex ideas in such a way that beginners could follow him; yet those who were more expert in their knowledge could find nothing in his presentation to criticize or dislike.

Bastiat, the economist, is the truly sophisticated analyst.And there have long been those who have believed that this early nineteenth century French liberal was not “merely” a popularizer, but also did much to advance human understanding of economic truth. Ludwig von Mises opined in the 1920s that Bastiat’s “critique of all protectionist and related tendencies is even today unsurpassed. The protectionists and interventionists have not been able to advance a single word in pertinent and objective rejoinder.” And Murray Rothbard, in his Austrian Perspective on the History of Economic Thought, calls Bastiat “a perceptive political, or politico-economic, theorist” who “has been systematically derided and undervalued,” despite the fact that he made more than one “important contribution to economic theory.”

One of these, Rothbard suggests, was his famous “fable of the broken window,” which

brilliantly refuted Keynesianism nearly a century before its birth. Here, [Bastiat] outlines three levels of economic analysis. A mischievous boy hurls a rock at a plate glass store window, and breaks the glass. As a crowd gathers round, the first-level analysis, common sense, comments on the event. Common sense deplores the destruction of property in breaking the window, and sympathizes with the storekeeper for having to spend his money repairing the window. But then, says Bastiat, comes the second-level, sophisticated analyst or what we might call a proto-Keynesian. The Keynesian says: oh, but you people don’t realize that the breaking of the window is really an economic blessing. For, in having to repair the window, the storekeeper invigorates the economy by his spending, and gives welcome employment to glaziers and their workers. Destruction of property, by compelling spending, therefore stimulates the economy and has an invigorating “multiplier effect” on production and employment.

But then in steps Bastiat, the third-level analyst, and points out the grievous fallacy in the destructionist proto-Keynesian position. The alleged sophisticated critic, says Bastiat, concentrates on “what is seen” and neglects “what is not seen.” The sophisticate sees that the storekeeper must give employment to glaziers by spending money to repair his window.

But what he doesn’t see is the storekeepers’s opportunity foregone. If he did not have to spend the money on repairing the window, he could have added to his capital, and to everyone’s standard of living, and thereby employed people in the act of advancing, rather than merely trying to sustain, the current stock of capital. Or, the storekeeper might have spent the money on his own consumption, employing people in that form of production.

In this way, the “economist,” Bastiat’s third-level observer, vindicates common sense and refutes the apologia for destruction of the pseudo-sophisticate. He considers what is not seen as well as what is seen. Bastiat, the economist, is the truly sophisticated analyst.

So he is — or was. Two hundred-odd years old he may be, but his ideas are forever young.

  • Jeff Riggenbach - journalist and historian - has narrated numerous titles for Blackstone Audio, University Press Audiobooks, and other audio publishers.  He was executive editor of The Libertarian Review and served as a contributing editor of Reason, Inquiry, and Samuel Edward Konkin's New Libertarian.  He produced the nationally broadcast daily libertarian radio program, Byline, for the Cato Institute throughout the 1980s.  His books include In Praise of Decadence 1998); Why American History Is Not What They Say: An Introduction to Revisionism (2009); Persuaded by Reason: Joan Kennedy Taylor and the Rebirth of American Individualism (2014); and The Libertarian Tradition (2015).