A Reader’s Guide to the Works of Frédéric Bastiat (1801–1850)

Created: 17 July, 2015
Updated: 22 June 2017 (to include material from CW4); 4 July, 2017 (reformatted for TAB)

Frédéric Bastiat (1801-1850) Tite Page of Economic Sophisms II (1848) Tite Page of Economic Harmonies (1st ed., 1850)

Contents

 


 

Introduction

This Guide takes the reader through the main periods of Bastiat’s life - his life in a small town in the département of Les Landes in the south west of France, his life in Paris as a free trade activist, then as an elected politician in the Second Republic, an anti-socialist pamphleteer, and an aspiring economic and social theorist. The key writings of Bastiat from each period are discussed and placed in their intellectual and political context. Wherever possible links are provided to The Annotated Bastiat collection above [TAB ] or to Liberty Fund’s edition of the Collected Works of Bastiat at the Online Library of Liberty website [OLL ] so the reader can examine the texts for themselves.

Frédéric Bastiat’s 6 volume Collected Works published by Liberty Fund is a thematic collection.

We are also creating a chronological version of Bastiat’s writings which only be available online - a “second edition” as it were. As the printed version becomes available in digital form we will add it to the chronological version. Thus, this is a work in progress. There is a complete list of all of Bastiat’s writings in order of appearance at the OLL here. [OLL ] and on this page [abc]. We have divided Bastiat’s works into 4 parts based upon the key periods and events in his life:

  1. Early Writings: The Bayonne and Mugron Years, 1819–1844 [OLL ] (this is largely complete)
  2. The “Paris” Writings I: Bastiat and the Free Trade Movement (Oct. 1844 - Feb. 1848) [OLL ] (this is under construction)
  3. The “Paris” Writings II: Bastiat the Politician, Anti-Socialist, and Economist (Feb. 1848 - Dec. 1850) [OLL ] (this is largely complete)
  4. The Unfinished Treatises: The Social and Economic Harmonies and The History of Plunder (1850–51) [OLL ] (this is under construction)

Until this online version is complete we will continue to link to the FEE editions which we also have online in the OLL:

Some of the abbreviations used in this collection:

The full method of citation for Bastiat’s writings (which is sometimes abbreviated in this article for reasons of space):

See A List of Bastiat's Complete Works in Chronological Order for full details .

 


 

Early Writings: The Bayonne and Mugron Years, 1819–1844

Place Bastiat in Mugron Map of Les Landes

If this vast machine always kept itself within the limits of its responsibilities, elected representatives would be superfluous. However, the government is a living body at the center of the nation, which, like all organized entities, tends strongly to preserve its existence, to increase its well-being and power, and to expand indefinitely its sphere of action. Left to itself, it soon exceeds the limits which circumscribe its mission. It increases beyond all reason the number and wealth of its agents. It no longer administers, it exploits. It no longer judges, it persecutes or takes revenge. It no longer protects, it oppresses.
This would be the way all governments operate, the inevitable result of this law of movement with which nature has endowed all organized beings, if the people did not place obstacles in the way of governmental encroachments.

(“To the Electors of the Department of Les Landes” (November, 1830), CW1, p. 344. [OLL ])

Key works from this period (fewer works from this period are discussed here at The Annotated Bastiat because they are early writings and of less interest to non-specialists):

The Early Writings were written in his home Département of Les Landes (1841 population 288,000), in particular the regional capital city of Bordeaux (it was the capital of the region of Aquitaine and had a population in 1841 of 99,000), the regional port city of Bayonne (1841 population 17,000), and the small farming town of Mugron (1841 population 2,190) where he lived for the first 44 years of his life. They are concerned with local matters but they show his growing interest in economics which he studied in a private in considerable depth.

He became a landowner in Aug. 1825 at the age of 24 when his grandfather died (his parents had died when he was young and he was raised by his aunt and grandfather) and left him 250 hectares (620 acres) of land in Mugron which included several sharecroppers.[1] They produced wine, cattle, and some general crops on reasonably good soil on the banks of the Adour river. Other agricultural activities included raising sheep, ducks, and growing vegetables. This produced an income which was sufficient to put Bastiat into the top 5% of tax payers which qualified him to vote in elections and to stand for election (which he did unsuccessfully in 1831 and 1832). During the July Monarchy (1830–1848) only about 200,000 to 240,000 of the wealthiest taxpayers were permitted for vote in elections, a group of people Bastiat referred to as “la classe électorale” (the electoral or voting class).[2] This restriction on voting was overturned after the Revolution in February 1848 when universal manhood suffrage was reintroduced. Nevertheless, the region’s economy had been hit hard (especially the export of wine and beef) because of Napoléon’s economic blockade (1806–14) of British trade and the reintroduction of high tariffs with the Restoration of the Bourbon monarchy in 1815. These policies badly affected the region as it was heavily dependent on wine and other agricultural exports for income. It appears that from the very beginning Bastiat opposed high tariffs and taxes and any government which strayed beyond very strict and defined limits to their activities.

During the July Revolution of 1830 which brought King Louis Philippe to power, Bastiat showed his liberal sympathies and sided with the revolution by persuading the officers of the Bayonne garrison to do so as well, thus tipping the balance of power in the south towards the new king. He wrote an amusing account of his actions in a letter to his friend and neighbour Félix Coudroy in which he describes how he drank wine and sang political songs with the officers as he persuaded them to support the revolution.[3] Although he was a staunch republican he believed a constitutional monarch as Louis Philippe promised to be was the best France could hope for in the circumstances. In one of his earliest political statements, written in Nov. 1830 in support of a local candidate, Bastiat warns his fellow voters that government has a tendency to always expand its sphere of action, increase the number of bureaucrats, and impose new and higher taxes.[4] Bastiat benefited from the new regime almost immediately. In May 1831 he was appointed Justice of the Peace in the canton of Mugron in spite of not having any formal legal training, perhaps as a reward for siding with the Revolution. In 1833 the new government introduced elections for the Departmental Council. In November of that year Bastiat (aged 32) was elected to the 28 member General Council of Les Landes, based in the town of Mont-de-Marsan (1841 population 4,465), which administered the affairs of the Département, such as tax collection, roads and other public works, education, and welfare relief for the poor. Bastiat brought a high level of economic expertise to the Council’s deliberations which he demonstrated in many memos and position papers which he submitted to them.

Bastiat, his close friend and neighbour Félix Coudroy, and other locals were members of a reading group or salon in Mugron, known as “The Academy”, where they discussed books, newspapers, and local politics. We know from his correspondence[5] that Bastiat was reading deeply in economics and social theory at this time, especially the works of Charles Comte (1782–1837) and Charles Dunoyer (1786–1862), who were trained as lawyers and became journalists who were active in opposing political repression in the closing years of the Napoleonic Empire and the early years of the Restoration. Their discovery of the economic ideas of Jean-Baptiste Say (1767–1832) had a profound impact on them and the new theory of liberalism known as “industrialism”[6] which they developed in many works during the 1820s and 1830s in turn had a profound impact on Bastiat during this formative period of his life.

In the second half of 1840 Bastiat tried to branch out into the insurance business. He spent 5 months or so in Madrid and Lisbon pursuing business contacts (his grandfather had done business in Spain and Bastiat spoke Spanish) and attempted to set up a business. This ultimately came to nothing, so he returned to farming in Mugron.

This local interest and political activity explains the topics of his earliest economic writings which he published in local papers, such as La Chalosse, Sentinelle des Pyrénées, Mémorial bordelais, and the Journal des Landes, and presented as memoranda he wrote for consideration by the General Council of Les Landes. These included articles on the establishment of a new secondary school in Bayonne (1834)[7] - he opposed the teaching of Latin and urged the teaching of modern languages and economically useful subjects like science; support for refugees from Poland (1834–35)[8] - he opposed the government’s severe restrictions on the movement and employment of the refugees; the financing and construction of canals (1837)[9] and railways in the region (1846)[10] - he was interested in properly assessing the economic impact of such large public works and criticised the way in which politics intruded into deciding routes; consumption taxes and tariffs on wine (1841, 1843)[11] - he believed that the unequal and heavy burden of taxes and tariffs on Les Landes’ main source of income was severely hampering its economic development; postal reform (1844, 1846)[12] - like Cobden and the Anti-Corn Law League in England, Bastiat wanted to see radical reform of the post office which would cut the cost of sending mail (the “penny post”) and open the business up to competition; the impact of the land tax on local communities (1844)[13] - Bastiat opposed the way the land tax burden was divided among the different regions of Les Landes which did not take into account changes in economic development or population growth and decline; and the general question of tariffs and custom duties (1834).

Bastiat’s interest in free trade can be seen as early as March 1829 when in a letter to his friend Victor Calmètes he expressed an interest in writing a book on “trade restrictions.”[14] The first thing he wrote on it was some “Reflections on the Petitions from Bordeaux, Le Havre, and Lyons Relating to the Customs Service” (April 1834) in which he expressed strong free trade opinions which he continued to voice for the rest of his life.[15] He became aware of Richard Cobden and the Anti-Corn Law League (which had been founded in Manchester in 1838) in May 1843 when he wrote a series of short articles for a local newspaper[16] explaining to French readers what was happening across the Channel and by mid–1844 he had become so immersed in the matter he had translated a large number of ACLL tracts and parliamentary speeches, which would become his first book on Cobden and the League (July 1845).[17] His own thoughts on how and why France should adopt a policy of free trade was written over the summer of 1844 and became his break-through essay[18] which got him admitted into the Parisian circle of political economists and launched a new career for him as a free rade activist and budding economic theorist.

His writings on economics from this early period show considerable skill in collecting and handling economic data and a growing confidence in making arguments based upon his understanding of economic theory.

This period lasted until the summer and fall of 1844 when his attention increasingly turned away from his village of Mugron towards London and Paris and he began to focus his reading and research on free trade. This resulted in him coming into personal contact with Richard Cobden in England and the free market economists in Paris who published his first article in the Journal des Économistes in October 1844 on French and English tariff policy.[19] This began the second major period in his life as the head of the French Free Trade movement.

 


 

The “Paris” Writings I: Bastiat and the Free Trade Movement (Oct. 1844 - Feb. 1848)

Map of Paris in 1841 showing the Octrois customs gates which were built in the 1780s (pink) and the planned military walls and forts (orange and red) which were constructed between 1841-44. Thus, when FB came to Paris in May 1845 they would have only recently been completed.

Trade is a natural right, like property. Every citizen who has created or acquired a product should have the option either of using it immediately or of selling it to someone anywhere in the world who is willing to give him what he wants in exchange. Depriving him of this faculty, when he is not using it for a purpose contrary to public order or morals, and solely to satisfy the convenience of another citizen is to justify plunder and violate the laws of justice.
(Declaration of Principles of the French Free Trade Association, 10 May 1846 (CW6))

Key works from this period:

Not all the works from this period were written in Paris but they reflect his entry into the orbit of the Guillaumin network[20] of economists and free traders who were based largely in Paris, where he eventually took up residence. (The population of Paris in 1846 was just over 1 million people, thus dwarfing the small world of Mugron from which Bastiat had come). Urbain Guillaumin (1801–1864) was the same age as Bastiat and his publishing firm had become the centre of the political economy movement in Paris. He published most of their books (including nearly all of Bastiat’s), the main journal, the Journal des Économistes (founded 1841), and provided a home for the Political Economy Society (founded 1842) which held monthly meetings which Bastiat attended whenever he could.[21] Most importantly, Guillaumin had developed a network of intellectuals, academics, businessmen, politicians, and journalists which provided Bastiat with important contacts and sources of funding when he came to Paris in May, 1845 when the Political Economy Society hosted a dinner in his honour.[22]

Bastiat’s growing interest in free trade in 1844 led to him doing extensive research on Richard Cobden and the Anti-Corn Law League, which resulted in a long article which was published in the October issue of the Journal des Économistes and material which the following year would be published as a book on Cobden and the League.[23] These two works provided him with the entrée into the Parisian political economy movement which he needed in order to make a career as a free trade activist and then an economist. In the article on “On the Influence of French and English Tariffs” (Oct. 1844) Bastiat explains to French readers some of the profound changes which were sweeping the world as a result of a new climate of opinion in favour of free trade in England which he thinks will also eventually reach France. He wanted to tell them about the activities of the Anti-Corn Law League which the French press had largely ignored, and how free trade is not only an economic issue which will affect the prosperity of all people, but also a political issue in that it was challenging the power and privileges of the industrial and landowning elites which controlled the British government. He predicted something similar would happen in France. In this early article Bastiat shows his typical approach to economic problems which is to combine his solid grasp of economic data with tables of data to back up his arguments, and a strong moral component in which he argues that tariffs and protection are not only economically damaging to ordinary consumers but also violate their rights to liberty and property. The two approaches are tied together with a writing style which is both direct and very engaging.

Cobden and the League (June 1845) was Bastiat’s first book and it was published by Guillaumin which shows how quickly Bastiat was accepted into the free market group in Paris. In the long, nearly 100 page introduction, Bastiat took up a new theme which he had not addressed in his first article, namely, explaining to French readers the ideas and strategies of the Anti-Corn Law League. In his mind the Leaguers had developed an entirely new strategy of peaceful, mass agitation for radical reform from which the French free market movement could learn a great deal. This is why he translated so many of the speeches of the League’s coterie of travelling lecturers as examples for the French to copy. He also pointed out the important role that women played in the behind the scenes organisation of the League, thus demonstrating the depth of support the free trade agitators had been able to acquire since they began operating in 1838. We also see in this piece the beginnings of Bastiat’s interest in the notion of “plunder” (la spoliation) which was to become so important to his thinking over the next couple of years. He would return to this topic in the opening chapter of ES2 on “The Physiology of Plunder” (written late 1847).[24]

In the “Introduction” to Cobden and the League Bastiat linked the policy of tariffs and indirect taxation of consumer goods to the control of the British government by the English aristocracy, or “Oligarchy” as he called them, which had its roots in the Norman Conquest of Britain. These “plunderers” had skewed tax policy so that the burden of taxes was paid by the “industrious class”, the “plundered”, or the ordinary farmers, workers, and shop keepers. By striking at the lynchpin of their power, tariffs, which maintained their incomes at the expence of consumers, the Anti-Corn Law League was striking a blow for democracy and freedom in a “quiet revolution” which would change the entire world. Bastiat took it upon himself at this moment in history to hasten the arrival of this revolution in France by exposing the “sophisms” or the false arguments used by these plunderers to bolster their privileged position in society. The reforms advocated by Bastiat were modeled on those of the Prime Minister Sir Robert Peel, namely to abolish tariffs, to dismantle the colonial system, and to abolish all taxes except for a single, low direct tax like a tariff of 5% or a very low income tax which everyone would pay. [25] The demands he articulated in 1845 remained constant for the rest of his life. Bastiat concluded the introduction with a piece of impassioned rhetoric where he called for “Liberty for all! Free trade with the entire world! Peace with the entire world!”

Over the course of the following three years Bastiat published 21 articles in the JDE (8 in 1845, 10 in 1846, and 3 in 1847),[26] including many academic ones on trade policy and the negative impact of protectionism on France and England, as well as other more popularly written articles which would be included in his collections known as Economic Sophisms (Series I appeared in Jan. 1846, Series II in Jan. 1848).[27] Examples of his more substantial articles on trade policy include, “The Economic Situation of Great Britain: Financial Reforms and Agitation for Commercial Freedom” (June 1845);[28] “On the Future of the Wine Trade between France and England” (Aug. 1845);[29] and “On the Impact of the Protectionist Regime on Agriculture” (Dec. 1846).[30]

No one had ever seen anything like the Economic Sophisms before. In them, Bastiat perfected his “rhetoric of liberty”[31] in defence of free trade and free markets designed for a more popular audience. He used satire, mockery, sarcasm, jokes and puns, fake petitions to government officials, dialogues between stock characters, and sometimes even little plays in which some characters played defenders of tariffs and others their critics.[32] He wrote over 70 of them over a period of three years and produced two published collections (Jan. 1846 and Jan. 1848) which sold very well for Guillaumin and were quickly translated into English and several other European languages. The common aim of these very diverse pieces was to correct commonly held “fallacies” about economics (ideas that were wrong in theory or fact) and to expose and debunk another set of commonly held “sophisms” or partly true and partly false beliefs which were used to advance the private interests of the beneficiaries of tariffs and government privileges. Some of the fallacies he rebutted were the following: that the interests of the producers are the real interest of the nation; real wealth is measured by the amount of labor or effort expended to create goods and services; free trade harms the interests of the nation; and the state can and should provide all the needs of the people. The sophisms Bastiat attacked were very numerous but can be summarised under the following broad categories: “the seen and the unseen” - the idea that one should also look for the hidden or later appearing consequences of any intervention in the economy; positive and negative “ricochet” or flow on effects[33] - this is an early formulation of the Keynesian idea of the “multiplier effect” or that an intervention or subsidy will have a positive flow on effect to others; and the use of euphemisms and frightening language to make one’s arguments - that critics of free market talk about trade “wars”, or the market being “flooded” with foreign goods.

Some examples of Bastiat’s best “economic sophisms” are the following. Perhaps his best in the First Series was the “Petition by the Manufacturers of Candles” (Oct. 1845),[34] a fictitious appeal for government assistance by the manufacturers of candles and other forms of artificial light against a foreign competitor, the sun, who undercut their prices and made it hard for them to make a living during daylight hours; and “A Negative Railway” (late 1845)[35] which is a hilarious story based on things Bastiat had observed in his home town when the General Council was debating where stops should be made on the new leg of the Bordeaux to Bayonne railway - the absurdity comes from the fact that if all the vested interests were satisfied the train would be forced to stop an infinite number of times in order to maximise the benefits to each town from overnight stays for passengers en route and the trans-shipping costs of moving luggage and cargo from one train to the next.

In the Second Series, “The Tax Collector” (late 1847)[36] contains a witty dialog between a tax collector, whom Bastiat mockingly calls “Mr. Blockhead”, and a sceptical wine producer, Jacques Bonhomme, who refuses to believe the tax collector’s claims that Jacques’ political “representatives” either represent him in any way or spend his hard earned money wisely in the public interest. In “The Utopian” (Jan. 1847)[37] an unnamed politician (perhaps Bastiat himself) is asked by the King to form a government which has dictatorial powers to enact reforms. The “utopian” politician dreams of all the cuts he could make to government programs and taxation, how many regulations he would abolish, and even how he would abolish the army and replace it with local militias. The story concludes with the utopian politician resigning because he realises his reforms would not work if they were imposed from above on a people who did not believe in their value. This returns to an idea he expressed in the “Introduction” to Cobden and the League that the battle for free trade would be won only after a revolution in thinking had taken place in the minds of voters and consumers.

In the Third Series, which Liberty Fund is publishing for the first time as Bastiat never found the time to publish his own edition before he died, Bastiat uses his stock device of the reductio ad absurdum in “The Mayor of Énios” (Feb. 1848).[38] The Mayor of a small town decides that if tariffs are good for France as a whole then they would also be good for his small town. He makes all the standard arguments in favour of tariffs to the townspeople and persuades them to let him impose tariffs on all goods, French or foreign, which are brought into the town. Trade grinds to a halt for most consumers but not for some privileged local producers within the town. Then the Prefect of the Département summons the mayor to the capital to inform him that only the nation state had the right to impose tariffs and that small towns like his should enjoy the many benefits of free trade and competition with its neighbours. The joke of course is that Bastiat has the Prefect defend free trade on the communal level while at the same time opposing it on the national and international level. In “Making a Mountain out of a Mole Hill” (c. 1847)[39] Bastiat for the first time introduces the figure of Robinson Crusoe[40] shipwrecked on his Island of Despair to explore the nature of individual economic action and choice in its simplest and most abstract form. Bastiat would make much greater use of the Crusoe and Friday “thought experiment” in his treatise Economic Harmonies a couple of years later. This might be the first time any economist has done this and it is doubly noteworthy because it had a profound impact on the Austrian economist Murray N. Rothbard who used Bastiat’s innovation in creating the foundations of his theory of economics in Man, Economy, and State (1962) which he was writing during the 1950s.[41]

For most of 1845–47 Bastiat threw himself whole-heartedly into the French Free Trade movement until his health gave out in early 1848, firstly by writing and perfecting the style of his “economic sophisms” during 1845; helping launch a French Free Trade Association beginning with an Association based in the port city of Bordeaux near where he lived (Feb. 1846) and then a national association in Paris (May 1846); and then founding, editing, and largely writing the Association’s weekly journal Le Libre-Échange in November 1846.[42] The president of the FFTA was the Duc d’Harcourt and Bastiat was the secretary of the Board. Other members of the Board were a “who’s who” of the Parisian economists.

During this period he wrote the “Declaration of Principles” of the FFTA (May 1846)[43], weekly editorials and articles for LE,[44] and crisscrossed the country organising mass meetings at which he and other leading figures in the free trade movement would give speeches. He gave 8 major speeches between Feb. 1846 and Aug. 1847 in Bordeaux, Marseilles, Lyon, and Paris. These will be published in CW6 (forthcoming). The “Declaration of Principles” of the FFTA is an important statement of his belief that free trade was a natural right of individuals just like their right to own property. Although he was not a charismatic public speaking he was very effective with his ability to mix his deep knowledge of the economic data, his skill at satirizing the arguments of his opponents, and his penchant for drawing upon well-known classics of French literature (like the playwright Molière or the writers of fables La Fontaine) to make complex economic ideas understandable to ordinary people. It is quite likely that in his public speeches he entertained the audience with versions of his sophisms which he recited and possibly even acted out for them on the stage. In his journal Libre-Échange, “The People and the Bourgeoisie” (May 1847),[45] he tried to appeal to workers by arguing that they had a property in themselves and their labour which was just as sacred as the property in things so beloved of the bourgeoisie and therefore they should pay no heed to the socialists who were calling for the abolition of property.

There were great hopes during the first year of operation of the Association as the English legislation to repeal the protectionist corn laws made its way through various readings of the bill which finally became law in June 1846. Also, large crowds attended the many public meetings the French free traders held in cities like Bordeaux and Paris at which Bastiat and others spoke. There was even a hint that the French Chamber of Deputies would consider tariff reform but these hopes began to fade in mid–1847 when the Chamber buried any chance for tariff reforms in committee and attendance at the free trade meetings began to fall off. The final blow to the Association came with the outbreak of revolution in February 1848 when the Association’s Board decided to close down the Association as they concluded that socialism posed a greater problem at that moment than tariff policy. By then Bastiat’s health was getting worse and he had to withdraw from the position of editor of Le Libre-Échange.

In addition to his articles on trade policy and his more popular sophisms, Bastiat also wrote articles of a more theoretical nature, some of which would later be included in his treatise Economic Harmonies (1st ed. Jan. 1850, 2nd expanded ed. July 1851). These were on topics such as sharecropping, competition, taxation, population theory, and the nature of economic organisation. It appears that Bastiat already had conceived most of his original and important theoretical ideas before he came to Paris in May 1845 for a welcome dinner hosted by the PES. These were revealed in a very important article he wrote for the JDE in February before he moved to Paris. It was written in the form of a “letter from an Economist” to Alphonse Lamartine,[46] one of the leading literary figures, politicians, and classical liberals of his day, criticising him for his support for the idea that workers had “a right to a job”. It is interesting that at this very moment only a few months after he became known to the Parisian economists he was speaking on their behalf to one of the most eminent men of the period. Some of the important ideas he presented in this article would become very important in his treatise Economic Harmonies and they include the idea that society is a mechanism “(un mécanique sociale) with its own internal ”driving force“ (moteur) which did not require an external ”mechanic“ to make it operate effectively and justly; that there was a providentially guided ”harmony“ of interests which existed in society in the absence of coercion; that there were ”les forces perturbatrices“ (disturbing forces), such as war, government regulations, privileges, subsidies, and tariffs which upset the harmony of the free market; that the free market had within it self-correcting mechanisms which he called ”les forces réparatrices“ (repairing or restorative forces) whereby the market attempts to restore equilibrium after it has been upset by ”les forces perturbatrices“ (disturbing forces); and his first use of the term ”organisation artificielle" (artificial organisation) which would become important in his later critique of socialism.

Another very original and provocative article was the one “On Population” (Oct. 1846)[47] in which he challenged the pessimism of Malthus’s theory by arguing that he had seriously underestimated two things: the productive power of the free market once its shackles had been removed, and the ability and willingness of rational people to plan the size of their families. The article created quite a stir among the economists who did not like the fact that an outsider from the provinces like Bastiat was challenging one of the core beliefs of orthodox political economy. Bastiat’s career as an theoretical economist began in the late fall of 1847 when he was able to give a series of lectures at the Taranne Hall in Paris. His “draft preface” to his lectures[48] gives some idea of how important this was to him, but the lecture series was cut short when revolution broke out at the end of February 1848.

By the end of this period, Bastiat had shown himself to be a gifted economic journalist (perhaps one of the greatest who has ever lived), a successful author, a committed and hardworking free trade activist, and an aspiring economic theorist who had become an important part of the Guillaumin network of economists in Paris.

 


 

The “Paris” Writings II: Bastiat the Politician, Anti-Socialist, and Economist (Feb. 1848 - Dec. 1850)

The National Assembly in Paris (to which FB was elected in April, 1848 and April 1849)

Large armaments necessarily entail heavy taxes: heavy taxes force governments to have recourse to indirect taxation. Indirect taxation cannot possibly be proportionate, and the want of proportion in taxation is a crying injustice inflicted upon the poor to the advantage of the rich. This question, then, alone remains to be considered : Are not injustice and misery, combined together, an always imminent cause of revolutions?
(Speech to the Friends of Peace Conference, Paris, 22 Aug., 1849. CW3)

Key works from this period:

Beginning the day after the Revolution, Bastiat and some younger friends started a small daily newspaper, La République française, which they distributed on the streets of Paris for an entire month.[49] On the first page of the first issue Bastiat and his friends declared their fervent republican ideals and a long list of liberal reforms they wanted to see introduced in the new Republic: the complete freedom of working, an end to state funded religion and education, an end to all taxes on food, an end to conscription into the army, and the “inviolable respect for property” (especially that form of property which was one’s own labour).[50]

This began a new phase in Bastiat’s life which was focussed on national politics (he was elected to the Constituent Assembly in April 1848 and to the Legislative Assembly in May 1849 representing his home district of Les Landes), reforming the taxation and expenditure policies of the new government (via his position as VP of the Finance Committee of the Chamber), and countering the socialist movement which had become a powerful force during the revolution.

Concerning Bastiat’s more formal political activities, we have several examples of the material Bastiat circulated to the electors in his home town and electoral district of Mugron in his efforts to get elected, firstly unsuccessfully in July 1846 with “To the Electors of the Arrondissement of Saint-Sever”[51], and then successfully to the Constituent and then the National Assembly in a “Statement of Electoral Principles” (March, 1848),[52] “Letter on the Referendum for the Election of the President of the Republic” (Aug. 1848),[53] and “Statement of Electoral Principles” (April, 1849).[54] These provide some clues to his political ideas and his program for reform. In his address “To the Electors of the Arrondissement of Saint-Sever” (July 1846) he gave a clear statement of his belief in a very limited role for government, seeing it as a dangerous living power which was constantly trying to grow in size. It was up to informed voters to make sure that it stuck to doing its proper job of “administering justice, of repressing crime, of paving roads, of repelling foreign aggression.” He also has an impassioned denunciation of French colonial policy in Algeria, calling the colonial system, whether British or French, “the most disastrous illusion ever to have led nations astray.”

In his campaign to get re-elected to the Legislative Assembly in April 1849 he reminded the Landais voters that he had served with some distinction on the Finance Committee and had opposed the socialist policies of the new government which he described as “theft regularized by law and executed through taxes.” One of his arguments to counter criticism of his voting behaviour in the Assembly was that he sometimes supported the right (on cutting taxes) and sometimes the left (on the right to form unions) depending on who best supported the principle of individual liberty at any given moment. He usually sided with the right on economic issues, and with the left on civil liberties issues. We also have a couple of formal speeches which he gave in the Assembly on cutting the tax on alcohol and the right of workers to form unions.[55] Unfortunately we do not yet have a detailed account of his activities in the Chamber’s Finance Committee (of which he was repeatedly elected Vice-President) or of his full voting record in the Chamber. We do know that he voted to reduce the tax on salt and the mailing of letters, reducing the size of the military, and abolishing conscription. We also have a couple of pamphlets he wrote on matters before the Assembly which he wanted to have circulated in print because he could not make himself heard in the Chamber because of his worsening throat condition. This included pamphlets on reducing the tax on salt (Jan. 1849), ending state subsidies to education, cutting the size of the military budget, and ending conflicts of interest in the Chamber by forbidding civil servants from also being Deputies.[56]

He briefly returned to radical street journalism while an elected Deputy in June 1848 when he, Molinari, and a few other economists created another magazine directed at ordinary people called, Jacques Bonhomme,[57] which appeared for only 4 issues before the rioting and army crackdown of the June Days forced them to close for reasons of safety. In the middle of street demonstrations in favour of socialism Bastiat and his friends were handing out their newspaper with articles calling for laissez-faire economic policies and denouncing the welfare state as “that great fiction where everybody tries to live at the expence of everybody else.”[58] The earliest version of his great essay “The State” appeared as a short article in Jacques Bonhomme and it is quite likely that it was also pasted up all over the working class areas of Paris as a wall poster or placard. Bastiat also bravely wrote and circulated leaflets calling for the immediate closing down of the National Workshops which were bankrupting the French state.[59] It was the closure of the Workshops which prompted the June Days’ rioting and its brutal suppression by the Army and National Guard, when thousands were killed or arrested. In spite of opposing the demands of the rioters, Bastiat courageously intervened when he saw soldiers firing into the crowds by arranging a cease fire and helping carry the dead and wounded into the side streets where they could be attended to.[60]

Bastiat played an important part in the anti-socialist campaign undertaken by Guillaumin and the political economists. They published a large number of pamphlets and books during 1848 and 1849 to oppose the socialists’s support for the right to work (i.e. a right to a job guaranteed by the state) which they wanted to see included in the new Constitution which was being debated by the Constituent Assembly over the summer of 1848, the National Workshops unemployment relief program established by Louis Blanc, Proudhon’s plans for a Peoples’ Bank which would issue interest free credit to workers, and the greatly expanded demands on the state’s budget to provide all manner of what we would today call policies of the modern welfare state. This is the context of Bastiat’s anti-socialist pamphlet, The State (June, Sept. 1848),[61] which would become the first of a series of 12 anti-socialist pamphlets, marketed by Guillaumin as “Mister Bastiat’s Little Pamphlets” which he wrote over the next two years. These pamphlets include Property and Law (May 1848)[62] - which was a general defence of the right to property; Individualism and Fraternity (June 1848)[63] - where he defends the idea of individualism against socialist ideas of fraternity espoused by people like Louis Blanc; Property and Plunder (July 1848)[64] - where Bastiat discusses the difference between plunder, or the appropriation of other people’s justly acquired property, and non-violent trade where services are exchanged for other services to mutual advantage including rent charged for land use; two works which point out to conservative protectionists that their ideas are very similar to that of the socialists, that it was just another form of the communism, or legal plunder, Protectionism and Communism (January 1849)[65] and Plunder and Law (May 1850);[66] and Damn Money! (April 1849) in which he warns of the dangers of paper money.[67]

One of Bastiat’s major concerns as a Deputy was to cut the size of the government’s budget by eliminating programs and reducing expenditure to an absolute minimum. This would allow the abolition or cutting of most taxes and tariffs which weighed heavily on the poor and the average worker (especially on food and drink). Since expenditure on the military was the single biggest item in the budget (30%) Bastiat wanted to see it cut massively (he advocated an immediate cut of 50%). He lobbied in the Chamber but because of his failing voice he circulated his ideas by means of a printed pamphlet Peace and Freedom or the Republican Budget (February 1849). Connected to this was the idea pushed by the leading free traders in Europe, Richard Cobden in England and Bastiat in France, to reduce international tensions by cutting tariffs and putting pressure on governments to reduce the size of their military, and to create mechanisms for the arbitration of international disputes. Both Cobden and Bastiat gave important speeches at the big Friends of Peace meeting which was held in Paris in August 1849.[68] Bastiat’s was entitled “Disarmament, Taxes, and the Influence of Political Economy on the Peace Movement” and in it he denounced conscription as a form of “military taxation” of the poor and called for “absolute non-intervention” in the affairs of other nations and for “simultaneous disarmament” of both England and France. As a result of this speech and other writings, Bastiat was likely sent on a secret government mission in October or November to London to speak with Cobden about the possibilities of a disarmament treaty between Britain and France. President Louis Napoléon’s government reshuffle in December put an end to this effort.

In spite of all the political distractions he faced, Bastiat did not neglect his more theoretical economic interests completely, although these did suffer to some degree. Because of the criticisms of socialists of the very idea of the legitimacy or profit, interest, and rent, and the near bankruptcy of the French state, Bastiat turned for the first time to monetary matters and wrote a series of pamphlets and essays such as Capital and Rent (February 1849),[69] Damn Money! (April 1849),[70] and his important and very long debate with Proudhon over the legitimacy of profit, interest, and rent, Free Credit (October 1849 - February 1850),[71] in order to address these issues.

In Capital and Rent (Feb. 1847) Bastiat defended the payment of rent against the criticism of the socialists who argued that it was unjust because it was “unearned”. He also developed in more detail his own new theory of rent. He argued that there was nothing special about rent from agricultural land, compared to other returns on capital such as profits and interest, since they were all examples of the “mutual exchange of services.” Maudit argent! (Damn Money) (April 1849) is Bastiat’s most extended discussion of money. It was written to counter the growing socialist demand for government measures to solve the economic crisis which followed the February Revolution. This came in the form of two demands: for banks to issue credit at very low or zero interest rates (especially from Proudhon), and to expand the money supply in order to cover the growing government debt which was used to fund unemployment measures and other government expenditures.

Some wealthy benefactors made it possible for Bastiat to spend the summer of 1849 in the seclusion of a hunting lodge in a Paris on the outskirts of Paris so he could work full-time and without distraction on completing his economic treatise. He was thus able to get together 10 chapters for the first edition of Economic Harmonies which was published in January 1850. Many of his ideas were so new and radical, especially those on population growth, exchange as the mutual exchange of services (including rent), and his ideas on subjective value, that the book was not well received by his colleagues in the PES.

As his health continued to fail, Bastiat took a leave of absence from the Chamber and in the summer of 1850, when he had completely lost the ability to speak and was suffering excruciating pain from a lump in his throat, and travelled to Mugron and a nearby spa in order to seek some relief from his affliction and probably say goodbye to his family and friends. While in Mugron and Eaux-Bonnes he managed to finish two of his best known works, The Law (June 1850)[72] and What is Seen and What is not Seen (July 1850),[73] with the famous chapter on “The Broken Window.” The Law (June 1850) is Bastiat’s clearest statement of his view of natural law as the basis for the right to life, liberty, and property; and that individuals had the right to organise themselves in such a way as to exercise a legitimate defence of these rights, and that this was the sole legitimate function of the state. As he put it, “the law (should limit) itself ”to ensuring that all persons, freedoms, and properties were respected“ and that it should be ”merely the organization of the individual Right of legitimate defense, the obstacle, brake and punishment that opposed all forms of oppression and plunder."

Unfortunately, he believed the state kept exceeding this strict limit on its power which allowed some people to plunder the property and liberty of others. This he defined as “legal plunder” and thought it was the main cause of “the disturbiong factors” which created so many of the economic problems which plagued humanity. The pamphlet “Property and Plunder” (June 1848) is Bastiat’s most extended treatment of plunder. He had planned to write another book on “The History of Plunder” once he had finished the Economic Harmonies but did not live long enough to do so. We can get some idea of what he might have written from the fragments he has left us. There is this pamphlet, several of the anti-socialist pamphlets also deal with plunder in its various forms, as well as the first two chapters of Economic Sophisms. Series II, “The Physiology of Plunder” and “Two Moralities”.[74] Bastiat believed that human history had progressed through various stages of organised plunder, such as Slavery, Theocracy, Monopoly, and Government Exploitation, and would soon move onto Communist plunder if the socialists of 1848 could have their way.

However, Bastiat may well have left his best to the very last. His French editor Paillottet tells us that Bastiat lost the first draft of What is Seen and What is Not Seen (July 1850) when moving house, rewrote it and threw it into the fire because he was not happy with it, and then wrote it a third time, in spite of his rapidly failing health. It is a collection of 12 essays which are connected by different treatments of the same theme, namely the opportunity costs of making economic decisions, or as Bastiat phrased it the “unseen” costs. This might be one of Bastiat’s most important insights, one for which he has not had due recognition.[75] As he cleverly illustrates the principle in the opening chapter on “The Broken Window”, what the poor shopkeeper Jacques Bonhomme has to spend on replacing his broken window is money he could have spent on something else. He thus loses twice because he has lost a capital good (the window) as well as being prevented from making another purchase he might have preferred to make had his window not been broken by his hooligan son.[76] Bastiat applies this important insight to such topics as dismissing large numbers of the armed forces and its impact on garrison towns, the state funding of theaters, government subsidies to colonists going to Algeria, and so on. He concluded the book, and perhaps his life since he was to die not long after this was published, that “not to know Political Economy is to let oneself be be blinded by the immediate effect of a phenomenon; to know Political Economy is to take into consideration all the effects, both immediate and future.”

A brief discussion of his unfinished magnum opus on Social and Economic Harmonies and Disharmonies will be provided in the next section.

In this final, all too brief period of Bastiat’s life, we see him move from being an almost full-time agitator for free trade to being a revolutionary street journalist, an elected politician, an expert on Government financial affairs, an anti-socialist pamphleteer, a peace campaigner, and a very determined man who wanted to finish his last work before he died.

 


 

The Unfinished Treatises: The Social and Economic Harmonies and The History of Plunder (1850–51)

"The Physiology of Plunder" (ES2 1, 1848) Economic Harmonies (1st ed. 1850) "Pluner and the Law" (1850)

Youth of France! You will find the title of this book very ambitious. ECONOMIC HARMONIES! Have I aspired to reveal the plans of Providence in the social order and the workings of all the forces provided to the human race for the achievement of progress?  Certainly not, but I would like to set you on the path to this truth: All legitimate interests are harmonious. This is the dominant idea in this book, and it is impossible not to recognize its importance.
(Dedication “To the Youth of France,” Economic Harmonies (1850).)

Key works:

Throughout this period (1848–50) the serious throat condition which would eventually kill Bastiat worsened[77] and he faced a race against time to finish his treatise on economics, the Economic Harmonies. He described the purpose of the Economic Harmonies as being the opposite to that of the Economic Sophisms - the latter was designed to “demolish” economic falsehood, while the former was designed to “build” economic truth.[78] He first began work on it in the fall of 1847 when he gave some lectures at the Taranne Hall in Paris when he also probably wrote a touching “draft preface” in the form of an ironic letter to himself.[79] In this letter he chastises himself for being too preoccupied with only one aspect of freedom, namely free trade or what he disparagingly called this “single crust of dry bread as food,” and having neglected the broader picture. To rectify this he wanted to apply the ideas of J.B. Say, Charles Comte, and Charles Dunoyer, to a study of “all forms of freedom” in a very ambitious research project in liberal social theory. In several letters[80] he refers to his project as a multi-volume study of “social harmonies” which would include a social, legal, and historical aspect, in addition to the economic. The plan was to devote one volume to the basic theory of social harmony before devoting another volume to the economic dimension, and then at least one volume to the “disturbing factors” which disrupted social harmony. The latter volume would be a study of the “disharmonies” which resulted from the upsetting of the natural harmony of voluntary and non-violent human interaction by “disturbing factors” (causes perturbatrices) such as war, slavery, and legal plunder. In other words, this volume would be “The History of Plunder” he had also planned to write.[81] Because he was so pressed for time he decided to focus on one aspect, the “economic harmonies”, and leave the others to another time.

It is possible to reconstruct the outlines of these proposed treatises from the scattered comments he made in letters, the Economic Sophisms, some essays (such as “Property and Plunder” (July 1848),[82] and unpublished drafts made available by Paillottet and Fontenay in the Oeuvres complètes.[83] Here is one format it might have taken:

What follows is a reconstruction of Bastiat’s theory and history of plunder (using his own words) which comes from “The Physiology of Plunder” ES2 2:

There are only two ways of acquiring the things that are necessary for the preservation, enhancement, and improvement of life: PRODUCTION and Plunder.

Plunder is exercised on a vast scale in this world and is too universally woven into all the major events in the annals of humanity for any moral science, and above all Political Economy, to feel justified in disregarding it.

What separates the social order from perfection (at least from the degree of perfection it can attain) is the constant effort of its members to live and progress at the expense of one another.

When Plunder has become the means of existence of a large group of men (the class of plunderers) mutually linked by a social connection to others (the plundered), they soon contrive to pass a law that sanctions it (legal plunder) and a moral code that glorifies it.

[The stages of plunder in history]. First of all, there is WAR… SLAVERY… THEOCRACY… MONOPOLY.

The true and just law governing man is “The freely negotiated exchange of one service for another.” Plunder consists in banishing by force or fraud the freedom to negotiate in order to receive a service without returning one in exchange. Plunder by force is exercised as follows: People wait for a man to produce something and then seize it from him with weapons. This is formally condemned by the Ten Commandments: Thou shalt not steal. When it takes place between individuals, it is called theft and leads to prison; when it takes place between nations, it is called conquest and leads to glory. When it takes place within a nation, between the government and its citizens, it is called legal plunder.

[In summary] Plunder consists in banishing by force or fraud the freedom to negotiate in order to receive a service without receiving another in return.

Having decided to focus his attention on finishing as much of the second volume on Economic Harmonies as he could, Bastiat returned to working on the project periodically as time permitted, publishing 4 draft chapters in the Journal des Économistes between September and December 1848 but seemed to drop the project soon after.[84]

He returned to it again during the summer of 1849 when the wealthy manufacturer and financial supporter of the economists, Casimir Cheuvreux, made a secluded hunting lodge on the outskirts of Paris available to Bastiat so he could work on his treatise in peace.[85] By the end of the year, Bastiat had enough material to publish the first part of Economic Harmonies (10 chapters) which appeared in January 1850.[86] He died on Christmas Eve, 1850 in Rome without having finished the second part of the treatise. Another 15 chapters were assembled from his papers by two of his friends, Paillottet and Fontenay, who published a second, larger edition of Economic Harmonies in June 1851.[87] A proposed list of chapters is all we have of what Bastiat intended to include in this magnum opus.

Some of his friends and colleagues didn’t know what to make of Bastiat’s treatise. They objected to his rejection of Malthusian pessimism concerning population growth - Bastiat believed Malthus had seriously underestimated the productive power of the free market once its shackles had been removed, and the ability and willingness of rational people to plan the size of their families. Others objected to his new theory of exchange as the mutually beneficial exchange of “services” which departed from the traditional view that “products were exchanged for products”, and his more general theory of rent (he saw it as just another service like any other) which denied the special nature of returns from land.[88] The American economist Henry Carey accused him of plagiarising his idea of “economic harmony”.[89] Still others could not see that behind his witty journalism, like the story of “The Broken Window” or “One Profit versus Two Losses” (May 1847),[90] or his playful but clever use of Robinson Crusoe and Friday thought experiments in Economic Harmonies, lay some profound and original insights about opportunity costs (a concept Bastiat probably invented), the multiplier effect and the mathematical calculation of economic losses, and the nature of human economic action, respectively. Even his friend and colleague, Gustave de Molinari, regarded his contribution to economics as being more like that of the popularizer Benjamin Franklin, than a true original thinker like J.B. Say.[91]

Modern economists are divided over the originality of Bastiat’s Economic Harmonies, with opinion ranging from the harshly dismissive - Schumpeter said he was no theorist at all[92] - to modern Austrian economists who see him as an Austrian economist ahead of his time,[93] and Public Choice economists who believe Bastiat had a sophisticated understanding of the economics of political decision-making.[94]

Some of Bastiat’s interesting and innovative ideas in Economic Harmonies include the following:

To these should be added other economic ideas which he discussed at greater length elsewhere in his writings:

The circuitous and difficult progression of his unfinished treatises can be seen in the following:

Faced with the double blow of being shunned by his colleagues in the Political Economy Society and knowing that he would not live to finish his book, Bastiat wrote in July 1850 to one of his friends, Roger Fontenay, who would compile the second, enlarged edition of Economic Harmonies after his death. It is a suitable epitaph for his life:

Perhaps you are too ardently in favor of the Harmonies in the face of opposition from Le Journal des économistes. Middle-aged men do not easily abandon well-entrenched and long-held ideas. For this reason, it is not to them but to the younger generation that I have addressed and submitted my book. People will end up acknowledging that value can never lie in materials and the forces of nature. From this can be drawn the absolutely free characteristic of gifts from God in all their forms and in all human transactions.

This leads to the mutual nature of services and the absence of any reason for men to be jealous of and hate each other. This theory should bring all the schools together on a common ground. Since I live with this conviction, I am waiting patiently, since the older I become the clearer I perceive the slowness of human evolution.

However, I do not conceal a personal wish. Yes, I would like this theory to attract enough followers in my lifetime (even if only two or three) for me to be assured before dying that it will not be abandoned if it is true. Let my book generate just one other and I will be satisfied. This is why I cannot encourage you too strongly to concentrate your thinking on capital, which is a huge subject and may well be the cornerstone of political economy. I have no more than touched upon it; you will go further than I and will correct me if need be. Do not fear that I will take offence. The economic horizons are unlimited: to see new ones makes me happy, whether it was I that discovered them or someone else that is showing them to me.[102]