“Who put the 'Bastiat' in the Bastiat Society?”
A talk by Dr. David M. Hart given to the Bastiat Society of Nashville, TN (12 May 2015).

[Created 13 May, 2015]
[Updated January 18, 2017]




  1. “A Brief Survey of Bastiat’s Life & Work”
  2. “The Petition of the Manufacturers of Candles” (Oct. 1845) - private interest rent seeking (crony capitalism)
  3. “The State” (June 1848) - the State as mutual plunder (welfare transfer payments) - “The Great Fiction”
  4. “The Broken Window” (July 1850) - idea of opportunity cost
  5. PLL DVD
  6. Guide to the OLL
  7. LF Book Catalog

Table of Contents


(Handout of “A Brief Survey of Bastiat’s Life & Work”)

Extraordinary story of a middle-aged man (44) who comes to Paris from the obscurity of Gascony (SW France) and dazzles the Paris-based group of political economists (the “Guillaumin network”) with his deep knowledge of economics, his ability as a writer, his wit and humour.

In the brief space of 6 years he writes a huge amount (3,000 pages / 6 volumes in LF edition) of brilliant economic journalism and innovative economic and social theory, and gets deeply involved in several important political “causes” of his day:

  • his economic journalism exposing the folly of tariffs (protectionism), government subsidies to industry, and government regulation in general (the Economic Sophisms (1845–47)
  • his participation in the free trade movement (1845–47) as head of the French Free Trade Association, editor of their journal Libre-Échange, and speaker at their meetings
  • his activity as an elected politician during the 1848 Revolution and Second Republic (VP of the Finance Committee)
  • his opposition to the rise of socialism (1848–1850) with a series of anti-socialist pamphlets
  • his activity in the anti-war movement (International Peace Congress in Paris in Aug. 1849 at which FB gave a major speech; V. Hugo as President)
  • his teaching and writing a treatise on economic theory (1847–50)

Dies before he can complete his tasks, from a severe throat condition (possibly throat cancer) which kills him slowly and painfully at the age of 49.

Bastiat’s ability to combine roles as “thinker/writer” and pro-liberty “activist” make him unique in classical liberal/libertarian tradition.

A Brief Survey of Bastiat’s Life & Work

Key Points

(this section is a handout)

  • born June 30, 1801 in Bayonne, Dépt. of Les Landes in Gascony, SW France
  • 1844: farmer and local magistrate until 1844–45
  • 1844–45: discovered Richard Cobden’s Anti-Corn Law League and wanted to build French Free Trade movement
  • wrote articles & books which impressed the Paris “Economists” - the “Guillaumin network,” the Political Economy Society
  • 1846–48: Free trade activism: Le Libre-Échange magazine, Economic Sophisms I & II
  • 1848: involved in Feb. Revolution, street journalism, elected to Constituent Assembly, VP Finance Committee
  • 1848 to mid–1850: ideological and political battle against socialism, pamphlet war: The State (June 1848), Property and Plunder (July 1848), The Law (June 1850), What is Seen and What is Not Seen (July 1850)
  • unfinished treatise on economics: Economic Harmonies (1850, 1851)
  • died 24 Dec. 1850 from throat cancer at age 49
  • more info: <oll.libertyfund.org/person25> and <davidmhart.com/liberty/Bastiat/>

The Importance of Frédéric Bastiat (1801–1850)

Key Points

  • FB probably the greatest economic journalist who has ever lived (Schumpeter and Hayek)
  • FB had a major impact on the French and Broader CL movement in mid–19th century
  • FB is a Key Transitional Figure between Classical Political Economy (Smith, Ricardo, Malthus) & the Marginalist (Austrian) School of 1870s (Jevons, Wieser, Menger) (See Appendix)
  • Rediscovery of FB post WW2 had a profound impact on the development of the modern libertarian movement:
    • R.C. Hoiles, Leonard Read (FEE)
    • Henry Hazlitt,
    • Murray Rothbard - Cercle Bastiat in NYC 1955
  • FB made many original contributions to political and economic theory and can be regarded as a proto-Austrian economist in his theoretical writing and a proto-public choice in his analysis of politics
  • His ability to combine single-issue activism (free trade), journalism, election to political office, theoretical work, in a coherent whole
  • the example of his personal life - his commitment to liberty, hard work, courage during a bloody revolution, and in overcoming adversity (death by cancer)

The Early “Unseen” FB: Provincial Magistrate and Landowner (1801–1844)

Key Points

  • the life of a gentleman farmer and local magistrate in Mugron, Les Landes (Gascony)
    • tries to improve productivity on his tenants’ land without success
    • realises importance of free trade to his poor region
    • uniqueness of Les Landes: local dialect, polyglot, stilt-walkers, border region and smuggling
  • his insatiable curiosity, especially about economic matters
    • local book club with friends in Mugron
    • 20 year program of private reading and studying economic theory in 4 languages - the Physiocrats, Adam Smith, J.B. Say, Charles Comte and Charles Dunoyer
  • early interest in liberal causes
    • helps swing the garrison in Bayonne to side with the July Revolution (Aug. 1830)
    • red wine and Béranger’s songs; goguette culture
  • appointed JP in 1831 then to General Council of Les Landes in Nov. 1833

Quotation: His intervention in the July Revolution, Aug. 1830

Singing and Drinking for Liberty: “I was expecting blood but it was only wine that was spilt” (5 August 1830)

Role of “goguettes” in 1820s and 1830s when political parties and meetings were banned

  • political song-writers “goguettiers” like Béranger poplar
    • The Smugglers“ & ”Le roi Yvetot"
  • FB active in liberal groups in 1820s and knew and liked B’s songs
  • Daumier’s cartoons of goguettes (men and women active); social clubs and political groups

Charles X authoritarian crackdown on political meetings in late 1820s led to his overthrow in July 1830.

  • FB’s involvement in Bayonne garrison in Aug. 1830 winning over officiers to side of revolution with wine and song.

From vol. of correspondence in vol. 1 of CW:

The 5th at midnight

I was expecting blood but it was only wine that was spilt. The citadel has displayed the tricolor flag. The military containment of the Midi and Toulouse has decided that of Bayonne; the regiments down there have displayed the flag. … Thus, it is all over. I plan to leave immediately. I will embrace you tomorrow.

This evening we fraternized with the garrison officers. Punch, wine, liqueurs and above all, Béranger contributed largely to the festivities. Perfect cordiality reigned in this truly patriotic gathering. The officers were warmer than we were, in the same way as horses which have escaped are more joyful than those that are free. [CW1, p. 30]

Quotation-Song: Pierre-Jean de Béranger’s poem “The Smugglers”

FB probably sang songs like this with the officers of the Bayonne garrison in 1830 when he persuaded them to side with the revolutionaries of 1830.

Hang the excisemen! let us get hold
Of pleasures in plenty, and heaps of gold!
We have the people on our side;
They’re all our friends at heart:
Yes, lads, the people far and wide,
The people take our part.

What! ’tis their will, that where one tongue is spoken
Where the same laws long time have been obeyed,
Because some treaty may such bonds have broken,
Two hostile nations should, forsooth, be made!

Man might his barter have convenient made,
But taxes blocking up the roads abound;
Then forward, comrades, forward !—such is trade,
That in our hands its balance must be found.

Taxes—the which on bloodshed they will spend—
Are levied there:
We—leaping o’er the barriers they defend—
Little we care.

Quotation-Song: Béranger, “Le roi d’Yvetot” (1813)

A song of a “goguettier” (a political song writer) Pierre-Jean Béranger (1780–1857) mocking a local political lord (Napoleon) who think they are “kings” and lord it over their subjects “The King Yvetot” (1813):

III. No costly regal tastes had he, 
Save thirstiness alone; 
But ere (before) a people blest can be, 
We must support the throne! 
So from each cask new tapp’d he got, 
(His own tax-gath’rer), on the spot,
A pot (impôt/tax)! 
Ha! ha! ha! ha! Ho! Ho! Ho! Ho! 
Oh what a fine little King was he! 
Ho! Ho!

IV. So well he pleased the damsels all,
The folks could understand
A hundred reasons him to call
The Father of his Land.
His troops levied (gathered) in his park
But twice a year - to hit a mark (target),
And lark (play about)!
Ha! ha! ha! ha! Ho! Ho! Ho! Ho!
Oh what a fine little King was he!
Ho! Ho!”

The “Seen” Bastiat I: The Free Trade Organizer and Journalist (1844–1848)

Key Points

  • 1844: discovers Richard Cobden’s Anti-Corn Law League (1838–1846)
  • writes article on French and English free trade for JDE Oct. 1844 and becomes famous in political economy circles
  • 1845: goes to Paris, joins Société d’économie politique
    • writes book on Cobden and the League
    • writes articles debunking economic fallacies or “sophisms” - Economic Sophisms I
    • FB’s “rhetoric of liberty” - sarcasm, satire, economic fables and stories, “Crusoe economics”
  • the “Guillaumin network” and the “Four/Seven Musketeers”
  • 1846: starts Bordeaux Free Trade Association and National Free Trade Association in Paris
    • begins journal Le Libre-Échange (1846–48)
  • 1847: French Chamber of Deputies debates free trade bill and it is defeated mid–1847
  • free trade agitation stops when Feb. 1848 revolution breaks out

Quotation: Molinari’s First Impressions of Bastiat in Paris

FB came from very different and economically backward part of France Gascony
- except for Bourdeaux wine industry
- Les Landes was marshland and swamp - mixed agriculture beside rivers, sheep farming on heathland, later in 19thC forests established which were tapped for sap
- very different local dialect; also many Basques and Spaniards (smuggling)
- stilt-walkers

From GdM’s obit. Shows how his brilliance overcame prejudice against his outsider status:

He appeared to us when he came for the first time to visit the office of the journal (Le Courrier français) which had shown itself to be sympathetic to the cause of free trade. He hadn’t yet had time to get a Parisian tailor or hatter; if he had ever thought of doing so! With his long hair and small hat, his loose fitting frock coat and his household umbrella, one would have naturally taken him for a solid farmer who was in the middle of visiting the marvels of the capital. But the demeanour of this rough-hewn farmer was mischievous and witty; his large dark eyes were keen and bright; and his forehead was of medium size but amply shaped and bearing the imprint of his thoughts. At first sight one became aware that the farmer standing before us was from the country of Montaigne (Aquitaine near Bordeaux) but, after listening to him one recognised him as a disciple of Benjamin Franklin. 
[GdM, Obit. JDE, 1851, p. 186]

Quotation: the Petition of the Candlemakers (Ec. Soph. I) (Oct. 1845)

(Handout of ““The Petition of the Manufacturers of Candles” (Oct. 1845)” - private interest rent seeking (crony capitalism))

From one of his earliest writings when he was in Paris. Shows his witty writing style. “The Sting of Ridicule”

Combatting the Vested Interests who seek Government Favours (rent seekers)

  • FB satirizes typical petition by vested interests to government for protection from foreign competition
  • argument in favour: “French” manufacturers will be able to expand production, provide employment for “French” workers, pay taxes to the “French” government, keep profits within “France”
  • FB ridicules these arguments by using reductio ad absurdum method
  • postulates case where French manufacturers petition government for protection from “unfair” competition from a low cost, foreign supplier
  • “The Seen”: benefits accrue to manufacturers in that industry and their workforce, and the government
  • “The Unseen”: consumers lose access to cheaper alternatives, losses to other manufacturers whom those consumers would have patronized

A Petition. From the Manufacturers of Candles, Tapers, Lanterns, Candlesticks, Street Lamps, Snuffers, and Extinguishers, and from the Producers of Tallow, Oil, Resin, Alcohol, and Generally of Everything Connected with Lighting.

To the Honorable Members of the Chamber of Deputies.


You are on the right track. You reject abstract theories and have little regard for abundance and low prices. You concern yourselves mainly with the fate of the producer. You wish to free him from foreign competition, that is, to reserve the domestic market for domestic industry.

We come to offer you a wonderful opportunity for applying your—what shall we call it? Your theory? No, nothing is more deceptive than theory. Your doctrine? Your system? Your principle? But you dislike doctrines, you have a horror of systems, and, as for principles, you deny that there are any in political economy; therefore we shall call it your practice—your practice without theory and without principle.

We are suffering from the ruinous competition of a foreign rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly that we suspect he is being stirred up against us by perfidious Albion (excellent diplomacy nowadays!), particularly because he has for that haughty island a respect that he does not show for us.

We ask you to be so good as to pass a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull’s-eyes, deadlights, and blinds—in short, all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses, to the detriment of the fair industries with which, we are proud to say, we have endowed the country, a country that cannot, without betraying ingratitude, abandon us today to so unequal a combat.

[ES1 7 - “Petition by the Manufacturers of Candles,” JDE, Oct. 1845]

The “Seen” Bastiat II: The Politician during the 1848 Revolution and the Second Republic (1848–1850)

Key Points

  • banning of political banquets in January triggered protest march
  • abdication of King Louis Philippe 24 Feb. 1848 ends “July Monarchy”
  • declaration of 2nd Republic 25 February
  • FB immediately founds La République française with G. de Molinari & H. Castille (Feb-March)
    • strong advocate of a limited, constitutional, free market Republic.
    • moving letter about his actions on street barricades to rescue injured and dying protesters
  • political clubs: economists start “Club lib” to counter socialists “right to a job” movement
    • forced to close because of socialist thugs
  • stood successfully in the 23 April elections representing his home département of Les Landes
  • appointed Vice-President of the Finance Committee to which he was re-appointed 8 times
    • vigorous opposition to the socialist “National Workshops” (government/taxpayer funded unemployment program)
  • Publication of a short-lived revolutionary newspaper Jacques Bonhomme (11 June to 9 July) with Gustave de Molinari, Charles Coquelin, Alcide Fonteyraud, and Joseph Garnier.
    • Publishes draft of what will become essay on “The State.”
    • Letters to friends on violence of June Days.
  • re-elected in 13 May 1849 to National Assembly
  • gave many speeches in Chamber on deregulation, cutting taxes, and opposition to Algerian colonization.
  • writes a dozen hard-hitting anti-socialist pamphlets between June 1848 and June 1850: The State (June 1848), Property and Plunder (July 1848), The Law (June 1850), What is Seen and What is Not Seen (July 1850)
  • gives important speech to Friends of Peace Congress in Paris in Aug. 1849 (V. Hugo president)

Quotation: Declaration of Republican ideas in Feb. 1848

Ban on political meetings led to rise of “political banquets” where “toasts” not speeches were given (grew larger from mid–1847 to Jan. 1848)

  • participation of many groups including liberals and economist

Collapse of censorship saw explosion of public meetings and political newspapers

  • CLs active with
    • street magazine La République française
    • wall posters
    • political clubs (over 200 in Paris) - “Club de la liberté du travail” to publicly debate socialists on key issue of revolution (right to work); broken up by violent socialists

From a street magazine (La République française) he and a few friends wrote and handed out on the streets of Paris. Shows his strong liberal republican views and support for the revolution.

"A Few Words about the Title of our journal The French Republic” (26 Feb. 1848) I

… being firmly convinced that the republican form of government is the only one which is suitable for a free people, the only one which allows the full and complete development of all kinds of liberty, we adopt and will keep our title: 

… We wish that henceforth labour should be completely free, no more laws against unions, no more regulations which prevent capitalists and workers from bringing either their money or their labour to whatever industry they find agreeable. The liberty of labour (“la liberté du travail”) proclaimed by Turgot and by the Constituent Assembly ought henceforth be the law of a democratic France.

Universal suffrage.

No more state funded religions. Each person should pay for the religion which he uses.

The absolute freedom of eduction.

Freedom of commerce, to the degree that the needs of the treasury allow. The elimination of “duties on basic food” as we enjoyed under the Convention. Low prices (la vie à bon marché) for the people!

No more conscription; voluntary recruitment for the army.
Institutions which allow the workers to find out where jobs are available and how to discover the going rate of wages throughout the entire country.

Inviolable respect for property. All property has it origin in labour: to attack property is to attack labour.

Quotation: Bastiat on the Barricades in Paris (27 Feb. 1848)

From his correspondence vol. 1. Shows his eyewitness account of violence on the barricades. His courage in trying to help the injured:

As you (Mme. Marsan) will see in the newspapers, on the 23rd everything seemed to be over. Paris had a festive air; everything was illuminated. A huge gathering moved along the boulevards singing. Flags were adorned with flowers and ribbons. When they reached the Hôtel des Capucines, the soldiers blocked their path and fired a round of musket fire at point-blank range into the crowd. I leave you to imagine the sight offered by a crowd of thirty thousand men, women, and children fleeing from the bullets, the shots, and those who fell.
An instinctive feeling prevented me from fleeing as well, and when it was all over I was on the site of a massacre with five or six workmen, facing about sixty dead and dying people. The soldiers appeared stupefied. I begged the officer to have the corpses and wounded moved in order to have the latter cared for and to avoid having the former used as flags by the people when they returned, but he had lost his head.

The workers and I then began to move the unfortunate victims onto the pavement, as doors refused to open. At last, seeing the fruitlessness of our efforts, I withdrew. But the people returned and carried the corpses to the outlying districts, and a hue and cry was heard all through the night. The following morning, as though by magic, two thousand barricades made the insurrection fearsome. Fortunately, as the troop did not wish to fire on the National Guard, the day was not as bloody as might have been expected.

All is now over. The Republic has been proclaimed. You know that this is good news for me. The people will govern themselves.

[CW 1, 93. Letter to Mme Marsan, 27 February 1848, p. 142. <oll.libertyfund.org/title/2393/225765>]

The “Seen” Bastiat III: The Anti-socialist Pamphleteer (1849–50):

Key Points

Importance of “Guillaumin network” of economists around the publishing firm Guillaumin

  • special anti-socialist series of publications (separate catalog)

  • important part played by FB who was the leading polemicist

  • continues to publish a stream of articles in JDE; 12 substantial pamphlets/tracts between end of 1848 and mid–1850

  • publishes some of his speeches in the Chamber as pamphlets for wider circulation - education, military spending and the budget, who should be allowed to sit in the Chamber
    • “Peace and Freedom or the Republican Budget” (February 1849)
    • “Baccalaureate and Socialism” (early 1850)
  • engages in debates with socialists over the right to a job, government/taxpayer funded make work and relief programs (National Workshops)
    • “Property and Law” (May 1848)
    • “Justice and Fraternity” (June 1848)
    • “Property and Plunder” (July 1848)
    • “Protectionism and Communism” (Jan. 1849)
    • “The State” (Sept. 1848, early 1849)
    • “The Law” (June 1850)
  • and one of the greatest pieces of economics every written aptly subtitled “Economics in One Lesson”:
    • What is Seen and What is Not Seen (July 1850)

Quotation: FB’s Definition of the State: The Great Fiction

(Handout of “The State” (June/Sept. 1848) - the State as mutual plunder (welfare transfer payments))

One of his most famous essays began as a short article in another revolutionary street magazine (Jacques Bonhomme) he handed out on the streets of Paris during the bloody June Days. Trying to persuade the people not to be influenced by socialist ideas:

FB’s was an advocate of a strictly limited government which operated under a constitution and the rule of law. notion of the proper functions of the state. One might call him an advocated of “the ultra-minimalist state”.

At the height of the 1848 Revolution in June 1848 just prior to the bloody repression of Parisian protestors and rioters by the army, FB wrote a short article in his newspaper Jacques Bonhomme which he stood on street corners distributing to ordinary working people. He wanted to show them that their socialist-inspired demands for a more interventionist sate were both immoral and counterproductive. He later expanded it into a longer essay and then a pamphlet (Sept. 1848 JDD).

[I What the State should be]

“We consider that the state is not, nor should it be, anything other than a common force, instituted not to be an instrument of mutual oppression and plunder between all of its citizens, but on the contrary to guarantee to each person his own property and ensure the reign of justice and security.”

[II What the People want the State to be]

“(This) bountiful and inexhaustible being that calls itself the state, which has bread for every mouth, work for every arm, capital for all businesses, credit for all projects, oil for all wounds, balm for all suffering, advice for all perplexities, solutions for all doubts, truths for all intelligent minds, distractions for all forms of boredom, milk for children, wine for the elderly, a being that meets all our needs, anticipates all our desires, satisfies all our curiosity, corrects all our errors and all our faults, and relieves us all henceforth of the need for foresight, prudence, judgment, wisdom, experience, order, economy, temperance, and activity.”

[III What the State is becoming]

The state is not and cannot be one-handed. It has two hands, one to receive and the other to give; in other words, the rough hand and the gentle hand. The activity of the second is of necessity subordinate to the activity of the first.

The rough hand (of the State) goes rummaging and rifling in our pockets.”

If (the State) wants to be philanthropic it is obliged to maintain taxes… Making use of borrowing, in other words consuming the future, is really a current means of reconciling them; efforts are made to do a little good in the present at the expense of a great deal of evil in the future.

It is plain that the state cannot procure satisfaction for some without adding to the work of the others …
The state is the great fiction by which everyone endeavors to live at the expense of everyone else.

Reciprocal pillage is no less pillage because it is reciprocal, that it is no less criminal because it is executed legally and in an orderly fashion.

They (the American people) do not expect anything other than from themselves and their own energy. They place no expectations on anything other than themselves and their own energy. Or they place their expectations only on themselves and their own energy.

Quotation: Opportunity Costs and Calculating the costs of the destruction of property: the “Broken Window Fallacy”

(Handout of “The Broken Window” (July 1850) - idea of opportunity cost)

One of the delightfully clever sections of FB’s last published piece “Ce qu’on voit et ce qu’on ne voit pas” (July 1850) - (What is Seen and What is Not Seen - “The Seen and the Unseen”). FB criticises the notion that the destruction of wealth can have beneficial consequences (the broken window).

One of his more powerful statements. FB contrasts 2 kinds of economic phenomena - “the seen” and “the unseen”:

  • all economic activities produce a complex series of effects - some immediately obvious (“the seen”) & some others occur later & are “unintended” (“the unseen”)
  • FB’s famous story of Jacques Bonhomme, the Glazier, & the Shoe Maker
  • what is immediately “seen” - JB has to fix a broken window & pays a Glazier to do so: loss for JB but a stimulus to the Glazier’s business
  • what is “unseen” (opportunity cost) - JB is out of pocket & the money he would have spent on other things (say a pair of shoes) has gone to the Glazier; the loss of potential business of the Shoemaker is “not seen”
  • Result: a gain for the Glazier (seen), but a “double incidence of loss” for JB and the Shoemaker (unseen)
  • FB refuting some economists who thought the Great Fire of London (1666) stimulated English economy because of reconstruction
  • same argument endlessly repeated today: Kobe tsunami (2011) and tropical storm Sandy (2012)
    • still relevant today as seen by constant stream of articles by Paul Krugman (NYT) and Peter Morici (Uni. Maryland)

But if, by way of deduction, as is often the case, the conclusion is reached that it is a good thing to break windows, that this causes money to circulate and therefore industry in general is stimulated, I am obliged to cry: “Stop!” Your theory has stopped at what is seen and takes no account of what is not seen.

What is not seen is that since our bourgeois has spent six francs on one thing, he can no longer spend them on another. What is not seen is that if he had not had a windowpane to replace, he might have replaced his down-at-heel shoes or added a book to his library. In short, he would have used his six francs for a purpose that he will no longer be able to….

The reader must take care to note clearly that there are not just two characters, but three, in the little drama that I have put before him. One, Jacques Bonhomme, represents the Consumer, reduced by the breakage to enjoy one good instead of two. The second is the Glazier, who shows us the Producer whose activity is stimulated by the accident. The third is the Shoemaker (or any other producer) whose output is reduced to the same extent for the same reason. It is this third character that is always kept in the background and who, by personifying what is not seen, is an essential element of the problem. He is the one who makes us understand how absurd it is to see profit in destruction. He is the one who will be teaching us shortly that it is no less absurd to see profit in a policy of trade restriction, which is after all, nothing other than partial destruction.

Cartoon: Barack Obama “knitting jobs”

(sh.ow slides)

The “Seen” Bastiat IV: The Theorist of Political Economy (1847–1850)

(optional section if I have time)

Key Points

  • attends meetings of the Société d’économie politique - controversial positions on nature of rent (landed rent) and ultra-minimalist size of government provoke spirited debates within the SEP
  • July 1847 gives a course on political economy at the School of Law (foundation of Ec. Harmonies)
  • writes many articles for the Journal des économistes 1844–1850
    • on population (challenging the pessimism of Malthusian population theory)
    • value theory (advocating a form of subjective value theory)
    • rent (challenging the orthodoxy of Smith and Ricardo)
  • offered job of editing JDE but turns it down
  • rushes to finish the Economic Harmonies before he dies (part 1 Feb. 1850, 2nd part appears posthumously)

Now regarded as an innovative economic theorist ahead of his time who anticipated many important insights of Austrian and Public Choice economics:

  • subjective value theory
  • mutually beneficial trade/exchange
  • inter-connectedness of economic activity
  • the natural or spontaneous order of the market
  • methodological individualism (Crusoe economics)
  • rent seeking
  • opportunity cost
  • coordinating function of the free market

As well as an important political theorist on:

  • theory of the State and idea of “legal plunder” (redistribution)
  • natural law and limited government
  • critique of socialism

Quotation: Social & Economic Harmonies: the free market solves the problem of economic coordination:

(Very Hayekian perspective on economic coordination)

“The Cabinet maker & the Student” I [Ec. Harmonies (1850)]:

We would be shutting our eyes to the light if we refused to acknowledge that society cannot present such complicated combinations, in which civil and penal laws play so little a part, without obeying a prodigiously ingenious mechanism. This mechanism is the subject matter of political economy.

One more thing worthy of comment is that, in this truly incalculable number of transactions which have contributed to keeping alive one student for one day, there is perhaps not a millionth part which has been made directly. The countless things he has enjoyed today are the work of men a great number of whom have long since disappeared from the face of the earth. Nevertheless they were remunerated as they wished, although he who is benefiting today from the product of their work has done nothing for them. He did not know them and will never know them.

He who reads this page, at the very moment at which he reads it, has the power, although he perhaps does not realize this, to set in motion men in all countries, of all races, and I might almost say, of all periods of time; white men, black men, red men and yellow men. He causes generations that have died away and generations not yet born to contribute to his current satisfactions…

In truth, can all this have been possible, can such extraordinary phenomena have been achieved without there having been in society a natural and knowing organization which acts, so to speak, without our knowledge?