Why Bastiat Is Still Great
Monday, April 11, 2011
by Mark Thornton
[Introduction to The Bastiat Collection (2011), a fantastic new edition, containing all his most important works in a pocket size at an incredibly low price. It is a treasure. An MP3 audio file of this article, narrated by the author, is available for download.]
- And now I would appeal with confidence to men of all schools, who
prefer truth, justice, and the public good to their own systems.
Economists! Like you, I am the advocate of LIBERTY; and if I succeed in
shaking some of these premises which sadden your generous hearts, perhaps
you will see in this an additional incentive to love and to serve our
sacred cause. (Bastiat, "To the Youth of France," Economic
Harmonies, p. 14)
Bastiat wrote sporadically starting in the 1830s, but in 1844 he launched his amazing publishing career when an article on the effects of protectionism on the French and English people was published in the Journal des Economistes and was held to critical acclaim.[1] The bulk of his remarkable writing career, which so inspired the early generation of English translators -- and so many more -- is contained in this collection.
If we were to take the greatest economists from all ages and judge them on the basis of their theoretical rigor, their influence on economic education, and their impact in support of the free-market economy, then Frédéric Bastiat would be at the top of the list. As Murray N. Rothbard noted:
- Bastiat was indeed a lucid and
superb writer, whose brilliant and witty essays and fables to this day
are remarkable and devastating demolitions of protectionism and of all
forms of government subsidy and control. He was a truly scintillating
advocate of an untrammeled free market.[2]
This collection represents some of the best economics ever written. Bastiat was the first, and one of the very few, to be able to convincingly communicate the basic propositions of economics. The vast majority of people who have learned anything about economics have relied on Bastiat or publications that were influenced by his work. This collection -- possibly more than anything ever written about economics -- is the antidote for economic illiteracy regarding such things as the inadvisability of tariffs and price controls, and everyone from the novice to the PhD economist will benefit from reading it.
The collection consists of three sections, the first of which contains his best-known essays. In "That Which is Seen, and That Which is Not Seen," Bastiat equips the reader to become an economist in the first paragraph and then presents the story of the broken window where a hoodlum is thought to create jobs and prosperity by breaking windows. Bastiat solves the quandary of prosperity via destruction by noting that while the apparent prosperity is seen, what is unseen is that which would have been produced had the windows not been broken. According to Rothbard:
- 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.[3]
The second section is Bastiat's Economic Sophisms, a collection of 35 articles on the errors of protectionism broadly conceived. Here Bastiat shows his mastery of the methods of argumentation -- using basic logic and taking arguments to their logical extreme -- to demonstrate and ridicule them as obvious fallacies. In his "Negative Railroad," Bastiat argues that if an artificial break in a railroad causes prosperity by creating jobs for boatmen, porters, and hotel owners, then there should be not one break, but many, and indeed the railroad should be just a series of breaks -- a negative railroad.
In his article "An Immense Discovery!" he asks, would it not be easier and faster simply to lower the tariff between points A and B rather than building a new railroad to transport products at a lower cost? His "Petition of the Candle-makers" argues in jest that a law should be passed to require that all doors and windows be closed and covered during the day to prevent the sun from unfairly competing with the makers of candles and that if such a law were passed it would create high-paying jobs in candle and candlestick making, oil lamps, whale oil, etc. and that practically everyone would profit as a result.
The third section is Bastiat's Economic Harmonies, which was hastily written before his death in 1850 and is considered incomplete. Here he demonstrates that the interests of everyone in society are in harmony to the extent that property rights are respected. Because there are no inherent conflicts in the market, government intervention is unnecessary. The borrower wants lenders to thrive so that loans will be available and the lender wants borrowers to thrive in order to collect interest on savings and to be paid back the loan principal. This book is the basis of charges that critics have levied against Bastiat, claiming that he made theoretical errors and failed to extend the corpus of theory. I have shown elsewhere that these criticisms must represent a misreading of Bastiat, and Rothbard showed that Bastiat made the vital contribution of returning economics to a focus on wants, exchange, and consumption, correcting the errors of British political economy.[4]
In a more recent and very important reappraisal of Bastiat, Professor Hülsmann has shown my suspicions to be correct.[5] He demonstrates that Bastiat's Harmonies is an important theoretical innovation that was widely dismissed by interventionists and attacked by equilibrium theorists. Interventionists dismissed it because the analysis proves that society can thrive without any government intervention in the economy. Equilibrium theorists saw Bastiat's conception of harmony as competition for their own concept of equilibrium -- and rightly so -- because while equilibrium is at best a useful fiction, harmony is an accurate conception of what actually exists in a free-market world. Therefore, the equilibrium approach can in some cases mimic or equal harmony, but it can also be applied to misleading ends and is inapplicable for others.
Hülsmann also brilliantly shows how critics have misread and therefore misunderstood Bastiat's concept of value and service and that their criticisms are invalid. The Hülsmann reappraisal smashes the critics and their echoes and is therefore an important primer for this section. Also see the important article by Joseph T. Salerno who shows that the marginalization of Bastiat and the French school involved a long process of deliberate distortion by their doctrinal enemies among the Anglo-American economists.[6]
Patrick James Stirling translated Bastiat's Economic Harmonies (1860) and Economic Sophisms (1863), which are reproduced in this collection. Stirling was a student of Thomas Chalmers, an important Scottish economist of the first half of the 19th century and leader of the Free Kirk schism from the Church of Scotland. Stirling was the author of The Philosophy of Trade, in which he provided a theory of prices and profits and examined the principles that determine the relative value of goods, labor, and money.[7] In The Australian and Californian Gold Discoveries and their Probable Consequences, he examined the impact of the large 19th-century gold discoveries and the laws that determined the value and distribution of money and where he exhibited a proto-Austrian theory of the business cycle.[8] Stirling has recently resurfaced in the economics literature as the author of the oldest known undergraduate essay in economics.[9]
We remain uncertain regarding the early translations of the essays in the first section of this volume (many translations of this period were unsigned), but what we do know seems to reinforce the Scottish connection to Bastiat. William Ballantyne Hodgson, who held a chair in political economy at the University of Edinburgh, translated the essays from "That Which is Seen, and That Which is Not Seen" for publication in newspapers and later as a booklet.[10] Economic Sophisms was first translated by Mrs. Louisa McCord (a Scottish surname) from Charleston, South Carolina.[11]
The first section is based on the David Wells (also a Scottish surname) edition of the essays which contained the long-out-of-print essay, "What is Money?"[12]
This collection of early translations is dedicated to improving economic literacy and eliminating the frustration of economic teachers everywhere. No one is better able to do so, and in such a forceful and entertaining way, than Bastiat. Enjoy.
Mark Thornton is a senior resident fellow at the Ludwig von Mises Institute in Auburn, Alabama, and is the book review editor for the Quarterly Journal of Austrian Economics. He is the author of The Economics of Prohibition, coauthor of Tariffs, Blockades, and Inflation: The Economics of the Civil War, and the editor of The Quotable Mises, The Bastiat Collection, and An Essay on Economic Theory. Send him mail. See Mark Thornton's article archives.
This article is excerpted from the introduction to The Bastiat Collection, first published in two volumes by the Ludwig von Mises Institute in 2007, and now reprinted in a single pocketbook volume in 2011.
Notes
[1] For biographical material on Bastiat, see George Roche's Frédéric Bastiat: A Man Alone (New Rochelle, N.Y.: Arlington House, 1971) and Dean Russell's Frédéric Bastiat: Ideas and Influences (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1969).
[2] Murray N. Rothbard, Classical Economics: An Austrian Perspective on the History of Economic Thought, vol. II (1995; Auburn, Ala.: Ludwig von Mises Institute, 2006), p. 444.
[3] Ibid., p. 445.
[4] Mark Thornton, "Frédéric Bastiat was an Austrian Economist," Journal des Economistes et des Etudes Humaines 11, no. 2/3 (June/September 2001): 387–98.
[5] Jörg Guido Hülsmann, "Bastiat's Legacy in Economics," Quarterly Journal of Austrian Economics 4, no. 4 (Winter 2000) pp. 55–70.
[6] Joseph T. Salerno, "The Neglect of Bastiat's School by English-Speaking Economists: A Puzzle Resolved," Journal des Économistes et des Etudes Humaines 11, no. 2/3 (June/September 2001), pp. 451–95.
[7] Patrick James Stirling, The Philosophy of Trade; Or, Outlines of a Theory of Profits and Prices, Including an Examination of the Principles Which Determine the Relative Value of Corn, Labor, and Currency (Edinburgh: Oliver & Boyd, 1846).
[8] Patrick James Stirling, The Australian and Californian Gold Discoveries and Their Probable Consequences: An Inquiry Into The Laws which Determine the Value and Distribution of the Precious Metals with Historical Notices of the Effects of the American Mines on European Prices in the Sixteenth, Seventeenth and Eighteenth Centuries (Oliver and Boyd, 1853).
[9] A.M.C. Waterman, "The Oldest Extant Undergraduate Essay in Economics?" Journal of the History of Economic Thought 27, no. 4 (December 2005): 359–73.
[10] William Ballantyne Hodgson, "Things Seen and Things Not Seen" (London: Cassel & Company Limited, 1910), abridged from the translation by Dr. Hodgson in 1852.
[11] Louisa S. McCord, Sophisms of the Protective Policy (New York: Wiley and Putnam, 1848). McCord wrote widely on economics and politics anonymously because her contemporaries would consider it inappropriate for a woman to be writing on such controversial matters.
[12] David A. Wells, Essays on Political Economy (New York: G.P. Putnam's Sons, 1877). Wells was a successful writer, publisher, and inventor. He opposed the income tax and supported free trade and the gold standard. He was appointed chairman of the national revenue commission after the Civil War and is said to have placed the United States on a scientific revenue system.
http://mises.org/daily/5180/Why-Bastiat-Is-Still-Great --
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