Frédéric Bastiat died in 1850, i.e. 150 years ago. Many people in this room, perhaps all of you, consider Bastiat as the first authentic, comprehensive Libertarian. As a matter of fact, while some of our heroes, like Rothbard, Friedman, and Rand, have been the subject of fierce controversies among ourselves, I have heard no one, up to now, uttering significant criticisms about Bastiat. On that same year 1850, a few months before he was carried off by tuberculosis, he had published three of his masterpieces : "Economic Harmonies", "The Law", and "What Is Seen and What Is Not Seen". Perhaps, then, can we consider 1850 as the true birth of Libertarianism, and celebrate its 150th anniversary.
To further justify that suggestion, I would like to show that a number of breakthroughs attributed to 20th century Libertarians were already contained as germs in Bastiat's works.
I shall start with Ayn Rand, on three themes, that she at least, considered as original contributions :
On Life Rand wrote :
There is only one fundamental right (all the others are its consequences or corollaries) : a man's right to his own life. Life is a process of self-sustaining and self-generated action; the right to life means the right to engage in self-sustaining and self-generated action - which means the freedom to take all the actions required by the nature of a rational being for the support, the furtherance, the fulfillment and the enjoyment of his own life.Ayn Rand. Man's rights. 1963. In "The Virtue of Selfishness", also reproduced as an appendix to "Capitalism, the Unknown Ideal".
113 years before, Bastiat had written:
We hold from God the gift that for us includes all other gifts : Life - physical, intellectual, and moral life. But life is not granted. He who gave it to us has left to us the responsibility of preserving it, of developing it, of perfecting it.Frederic Bastiat. "The Law". 1850.To that end, he has provided us with a collection of marvelous faculties; he has set us in the midst of a variety of resources. It is by the application of our faculties to these resources that the phenomenon of assimilation, of appropriation, is realized, by which life runs its appointed course.
Existence, faculties, assimilation - in other words, personality, liberty, property - that is what man is.
Ayn Rand's views on Property are best summarized in "Man's Rights", the same forceful essay just quoted above :
The right to life is the source of all rights - and the right to property is their only implementation. Without property rights, no other rights are possible. Since man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means of sustaining his life. The man who produces while others dispose of his product is a slave.
In "Economic Harmonies", chapter 8 ("Private Property and Common Wealth") Bastiat wrote :
God put raw materials and the forces of Nature at man's disposal. To gain possession of them, either one has to take pains, or one does not have to take pains... If pains must be taken, ... the satisfaction must go to the one who has taken the pains. This is the principle of property.Will anyone dare to say that a man should not be the owner of the pains he himself takes?... Let him take care! That would mean glorifying slavery; for to say that certain men must render services that are not paid for, means that other men must receive services that they do not pay for, which is certainly slavery.
On inventors, Ayn Rand wrote :
The man who does no more than physical labor consumes the material value equivalent of his own contribution to the process of production, and leaves no further value, neither for himself, nor for others. But the man who produces an idea in any field of rational endeavor - the man who discovers new knowledge - is the permanent benefactor of humanity ...Ayn Rand. "Atlas Shrugged". 1959....the man who creates a new invention receives but a small percentage of his value in terms of material payment, no matter what fortune he makes
While Bastiat had written :
When we have developed a technique or discovered a gift of Nature, some new fertility in the soil, or some new application of the laws of the physical universe, the profit goes to us momentarily, fleetingly, as it is just to get some recompense, and useful to encourage further efforts. Then our advantage slips through our hands, despite our attempts to retain it; it ceases to be personal, becomes social, and falls for ever in the realm of the free for all. And, while we contribute to the enjoyment of mankind through the progress we have made, we enjoy ourselves the progress that all other men have accomplished.Frédéric Bastiat. "Economic Harmonies". Chapter 12 : The Two Mottoes. 1850.
I shall proceed with Hayek. There is no question that, under the name of Catallaxy, Hayek has developed the concept of free exchanges between equals with a precision and a scope never attained before. Nevertheless - granted in a less methodical and organized fashion - the same concept is pregnant throughout the work of Bastiat. To quote two examples among many :
Exchange is a natural right, like Property. Every citizen who has created or acquired a product, must have the option either to apply it immediately to his own usage, or to yield it to anyone, on the surface of the globe, who agrees to give him in exchange the object of his desire.Inaugural Declaration to the Association for the Freedom of Exchanges. 1846
Let men labor, exchange, learn, band together, act, and react upon one another, since in this way, according to the laws of Providence, there can result from their free and intelligent activity only order, harmony, progress, and all things that are good, and increasingly good, and still better, and better yet, to infinite degree.Economic Harmonies. Introduction : "To the youth of France". 1850.
I would also like to suggest that Bastiat was a precursor of Hayek in showing the vagueness of the notion of Social Justice. Indeed, in "The mirage of Social Justice", the second volume of "Law, Legislation, and Liberty", Hayek quotes the following extract from "The Law" :
The purpose of the law is to prevent injustice from reigning. In fact it is injustice, instead of justice that has an existence of its own. Justice is achieved only when injustice is absent.
According to Hayek, most rules of just behavior are negative. In a similar vein Bastiat wrote :
Law is the common force organized to act as an obstacle to injustice... It is not true that the function of the law is to regulate our consciences, our ideas, our wills, our education, our opinions, our work, our trade, our talents, or our pleasures. The function of law is to protect the free exercise of these rights, and to prevent any person from interfering with the free exercise of these same rights by any other person...The mission of the law is not to oppress persons and plunder their property from them, even though the law may be acting in a philanthropic spirit. Its mission is to protect persons and property.
Furthermore, let no one say that the law is philanthropic if, in the process, it refrains from oppressing persons and plundering them of their property : this would be a contradiction. The law cannot avoid having an effect upon persons and property; and if the law acts in any manner other than to protect them, its actions then necessarily violate the liberty of persons and their right to own property.
Roughly a century before Hayek, Bastiat had made a penetrating criticism of Socialism as a road to serfdom and a fatal conceit. Saying that by no means diminishes the outstanding contribution of Hayek in opening the eyes of his contemporaries, at a time when socialism was becoming a real danger for Humanity. It simply shows Bastiat's merit in anticipating the disaster that Socialism was to bring to Humanity at a time when it was little more than a collection of intellectual fantasies.
As Bastiat said :
Socialist writers base their various theories upon one common hypothesis : they divide mankind into two parts. People in general - with the exception of the writer himself - form the first group. The writer, all alone, forms the second and most important group. Surely this is the weirdest and the most conceited notion that ever entered a human brain!The Law. 1850.In fact these writers begin by supposing that people have within themselves no means of discernment; no motivation to action. They assume that people are inert matter, passive particles, motionless atoms, at best a kind of vegetation indifferent to its own manner of existence. They assume that people are susceptible to being shaped, by the will and hand of another person - into an infinite variety of forms, more or less symmetrical, artistic, and perfected...
These socialists writers look upon people in the same manner that the gardener views his trees. Just as the gardener capriciously shapes the trees into pyramids, parasols, cubes, vases, fans, and other forms, just so does the socialist writer whimsically shape human beings into groups, series, centers, sub-centers, honeycombs, and other variations. And just as the gardener needs axes, pruning hooks, saws, and shears to shape his trees, just so does the socialist writer need the force that he can find only in law to shape human beings. For this purpose, he devises tariff laws, tax laws, relief laws, and school laws.
Socialists look upon people as raw material to be formed into social combinations. This is so true that, if by chance, the socialists have any doubts about the success of these combinations, they will demand that a small portion of mankind be set aside to experiment upon... And one socialist leader has been known seriously to demand that the Constituent Assembly give him a small district with all its inhabitants, to try his experiments upon.
In the field of Economics, Bastiat, like Jean-Baptiste Say, was a supply-sider. More specifically, he was a precursor of Laffer. Using a famous curve, the latter has demonstrated that beyond a certain rate of taxation, the total product of the tax decreases and does not increase.
In 1849, in a paper issued to his colleagues of the National Assembly, Bastiat made the same demonstration. The paper was called "Peace and Liberty and the Republican Budget". It was a plea to reduce the budget of the nation. Bastiat asserted that taxation was in conflict with Liberty. If it was reduced sufficiently to increase Liberty, prosperity would ensue. At the time, it happens that it was chiefly in the fields of Foreign Affairs and Defense that it was desirable, according to Bastiat, to reduce public expenses, and he claimed that it would be a factor of Peace in Europe. Hence the title of the paper.
In this paper, Bastiat explains why, beyond a certain level of taxation, the national product and the fiscal revenue are bound to decrease. He then surveys a certain number of taxes, and gives arguments showing that the critical threshold had certainly been overstepped. Finally, he quotes a recent example from England giving a strong experimental basis to his thesis : to stop consecutive budget deficits, the Whigs decided to create a 5% surtax to existing ones. They were expecting a 5% increase in internal revenue. Instead they got a 3% decrease! The next government, under the Tory Robert Peel, decreased the taxes and increased the revenue!
I would now like to show that Bastiat was an early contributor to the Public Choice School. To that effect, I shall summarize the Public Choice concepts in a list of ten points that I have borrowed from Jacques Garello. Each concept is written in bold characters. After each one, I shall provide in italics a quotation from Bastiat relevant to the concept. Some of these quotations may look a little far-fetched. It is only because I have tried to keep them short. But developments beyond the quotations show that Bastiat had completely grasped the concept.
[According to the politicians], it is France, or the abstraction, which is to raise Frenchmen, or the realities, to a higher standard... Is this not to be possessed by the bizarre illusion that leads us to expect everything from another power than our own? Is this not to imply that there is, above and beyond the French People, a virtuous, enlightened, rich being who can and ought to bestow his benefits on them?The State. 1848.
Between the State, lavish with impossible promises, and the public, which has conceived unrealizable expectations, two classes of men intervene : the ambitious, and the utopian.The State.
These demagogues cry into the ears of the people : "those in power are deceiving you; if we were in their place, we would overwhelm you with benefits and free you from taxes..."The State.They are no sooner in charge of things than they are called on to keep their promises : "Give me a job, then bread, relief, credit, education, and colonies", say the people, "and at the same time, in keeping with your promises, deliver me from the burden of taxation."
[To his colleagues at the Assembly] :Your principle has placed these words above the entrance of the legislative chamber : "whoever acquires any influence here can obtain his share of the legal plunder."...Plunder and LawAfter the February Revolution, when universal suffrage was proclaimed... every class came bursting into the National Assembly to make of the law an instrument of plunder.
But the phenomenon is contagious. People whose ethics are against benefits obtained at the expense of others, end up by asking for subsidies themselves. "After all I am paying taxes, why should not I get some return?"Footnote to the French edition of "What Is Seen And What Is Not Seen""A man accomplishes an act which produces for him a good consequence equal to 10, and bad consequences equal to 15, but equally shared among 30 people. The consequence for each will be only 0.5.
[To his colleagues at the Assembly] :You will not prevent M. Billault from saying to the legislator : you grant favors to some; you must grant them to all.Plunder and Law.You will not prevent M. Crémieux from saying to the legislator : "You enrich the manufacturers; you must enrich the proletariat...
Each class proceed to say to the State : "You, who can take fairly and honorably, take from the public and share with us." Alas, The State is only too ready to follow such diabolical advice; for it is composed of cabinet ministers, of bureaucrats, of men in short, who, like all men, carry in their hearts the desire, and always enthusiastically seize the opportunity, to see their wealth and influence grow. The State, then, very quickly understands the use it can make of the role the public entrusts to it with. It will be the arbiter, the master, of all destinies. It will take a great deal; hence, a great deal will remain for itself. It will multiply the number of its agents; it will enlarge the scope of its prerogatives; it will end up by acquiring overwhelming proportions.The State.
Unless one has a long standing familiarity with the doctrine of free trade, one's ideas are continually being colored by the sophisms of protectionism in one form or another. To clear one's mind of them, one must each time go through a lengthy process of analysis; nd not everyone has the time to undertake this task, legislators least of all.Economic Sophisms. Introduction.
This is the way an opinion gains acceptance in France. 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.Economic Harmonies. Chapter 16 : Population.
What are we to think of a people who apparently does not suspect that reciprocal pillage is no less pillage because it is reciprocal; that it is no less criminal because it is carried out legally...?The State.
The State is the great fiction by which everyone seeks to live at the expense of everyone else.The State
Today, Bastiat is duly recognized as a precursor by modern contributors to Public Choice. The reason why he is not considered quite as the father of the Theory, is because he did not gather the above concepts, which are dispersed throughout his work, into a single, organized, exposition.
For my final matching of quotations, I shall draw a few lines from the great Margaret Thatcher.
My father liked to connect the progress of our corner shop with the great complex romance of international trade which recruited people all over the world to ensure that a family in Grantham could have on their table rice from India, coffee from Kenya, sugar from the West Indies and spices from five continents. Before I had read a line from the great liberal economists, I knew from my father's accounts that the free market was like a vast sensitive nervous system, responding to events and signals all over the world to meet the ever changing needs of people in different countries, from different classes, of different religions, with a kind of benign indifference to their status. Governments acted on a much smaller store of information and, by contrast, were themselves "blind forces" blundering about in the dark, and obstructing the operations of markets rather than improving them.Margaret Thatcher. "The Downing Street Years". 1993. Introduction.
The same concept was developed at length by Leonard Read, in a famous pamphlet called "I, Pencil". Prior to that, in 1877, the concept appeared in a pastoral letter by Cardinal Pecci, later to become Pope Leon XIII. But the common root is a text by Frédéric Bastiat in the very first pages of "Economic Harmonies" :
Let us take a man belonging to a modest class of society, a village cabinetmaker, for example, and let us observe the services he renders to society and receives in return. This man spends his day planing boards, making tables and cabinets; he complains of his status in society, and yet what, in fact, does he receive from this society in exchange for his labor? The disproportion between the two is tremendous.Every day, when he gets up, he dresses; and he has not himself made any of the numerous articles he puts on. Now, for all these articles of clothing, simple as they are, to be available to him, an enormous amount of labor, industry, transportation, and ingenious invention has been necessary. Americans have had to produce the cotton: Indians the dye; Frenchmen the wool and the flax; Brazilians, the leather; and all these materials had to be shipped to various cities to be processed, spun, woven, dyed, etc.
Bastiat goes on for three pages, and concludes :
In truth, could all this have happened, could such extraordinary phenomena have occurred, unless there were in society a natural and wide order that operates without our knowledge?In our day people talk a great deal about inventing a new order. Is it certain that any thinker, regardless of the genius we grant him and the authority we give him, could invent and operate successfully an order superior to the one I have just described?
At this stage, perhaps you will agree with me in considering Bastiat as the father of Libertarianism and 1850 as the birth of our faith. When I say that, I am well aware that classical liberalism is much older than 1850, perhaps dating back to the time of Aristotle. But if we consider Libertarianism as the modern, coherent, all encompassing, radical form of liberalism, then Bastiat is probably the first authentic Libertarian. But let us not forget that while Bastiat had written his major pieces by 1850, he was born on June 30, 1801, in Bayonne. So, next year, 2001, will be the 200th anniversary of his birth. ISIL, together with Libertarian International, and the Cercle Frédéric Bastiat, have decided to celebrate this anniversary between Bayonne, where he was born, and Mugron, where he spent most of his life. We shall visit both places. But don't be afraid. We do not intend to run an academic meeting devoted to scholarly analyses. Instead, we intend to show how terrible a century that ignored the teachings of Bastiat has been, and, for the 21st century, how radiant a civilization more in keeping with these teachings could be. A civilization of individual liberty and responsibility. The congress will be followed by a spectacular tour of Aquitaine, the land of Bastiat, my land.
Cercle Frédéric Bastiat