Bastiat lived in a revolutionary period. He was fourteen when Napoleon was defeated at Waterloo and exiled to St. Bastiat was, beyond all other men, an economic pamphleteer, the greatest exposer of economic fallacies, the most powerful champion of free trade on the European Continent. He was the master of the redutio ad absurdum. He used exaggeration to ridicule political ideas that reduced economic efficiency.
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However, that is not my subject here. First Series, Chapter 1 Abundance and Scarcity Which is preferable for man and for society, abundance or scarcity? It is the burden of conversations, newspaper articles, books, and political speeches; and, strange as it may seem, it is certain that political economy will not have a completed its task and performed its practical function until it has popularized and established as indisputable this very simple proposition: "Wealth consists in an abundance of commodities.
Thus, people fear abundance. Has not M. Thus, he was afraid of abundance. Do not the workers wreck machines? Thus, they are afraid of overproduction, or—in other words—of abundance. Now, bread can be dear only because it is scarce.
Thus, M. Bugeaud was extolling scarcity. Thus, as he sees things, good consists in barrenness and scarcity; and evil, in fertility and abundance. Do not the Chambers and the government every day comply with this injunction from the press? But tariffs raise the prices of things only because they reduce their supply in the market! Thus, the newspapers, the Chambers, and the government put the theory of scarcity into practice, and I was right to say that this theory is by far the most popular of all theories.
How does it happen that in the eyes of workers, of publicists, and of statesmen, abundance seems dangerous and scarcity advantageous? I propose to trace this illusion to its source. We observe that a man acquires wealth in proportion as he puts his labor to better account, that is to say, as he sells at a higher price.
He sells at a higher price in proportion to the shortage, the scarcity, of the type of commodity produced by his labor. We conclude from this that, at least so far as he is concerned, scarcity enriches him.
Applying this mode of reasoning successively to all workers, we deduce from it the theory of scarcity. Thereupon we proceed to put the theory into practice, and, in order to favor all producers, we artificially raise prices and cause a scarcity of all goods by restrictive and protectionist measures, the elimination of machinery, and other analogous means. The same holds true of abundance. We observe that, when a product is plentiful, it sells at a low price; thus, the producer earns less.
If all the producers are in this plight, they are all poverty-stricken; hence, it is abundance that ruins society. And, as every person holding a theory seeks to put it into practice, one sees in many countries the laws of man warring against the abundance of things.
This sophism, phrased as a generalization, would perhaps make little impression; but, when applied to a particular set of facts—to this or that industry or to a given class of producers—it is extremely specious, and this is easily explained. It constitutes a syllogism which, although not false, is incomplete. Now, what is true in a syllogism is always and necessarily present to the mind. But what is incomplete is a negative quantity, a missing element that it is quite possible and even very easy not to take into account.
Man produces in order to consume. He is at once both producer and consumer. The argument that I have just set forth considers him only from the first of these points of view. From the second, the argument would lead to an opposite conclusion. Could we not say, in fact: The consumer becomes richer in proportion as he buys everything more cheaply; he buys things more cheaply in proportion as they are abundant; hence, abundance enriches him; and this argument, extended to all consumers, would lead to the theory of abundance!
It is an imperfect understanding of the concept of exchange that produces these illusions. If we analyze the nature of our self-interest, we realize clearly that it is double. As sellers, we are interested in high prices, and, consequently, in scarcity; as buyers, we are interested in low prices, or, what amounts to the same thing, in an abundance of goods.
We cannot, then, base our argument on one or the other of these two aspects of self-interest without determining beforehand which of the two coincides with and is identifiable with the general and permanent interest of the human race. If man were a solitary animal, if he worked solely for himself, if he consumed directly the fruits of his labor—in short, if he did not engage in exchange—the theory of scarcity could never have been introduced into the world.
It would be all too evident, in that case, that abundance would be advantageous for him, whatever its source, whether he owed it to his industriousness, to the ingenious tools and powerful machines that he had invented, to the fertility of the soil, to the liberality of Nature, ox even to a mysterious invasion of goods that the tide had carried from abroad and left on the shore. No solitary man would ever conclude that, in order to make sure that his own labor had something to occupy it, he should break the tools that save him labor, neutralize the fertility of the soil, or return to the sea the goods it may have brought him.
He would easily understand that labor is not an end in itself, but a means, and that it would be absurd to reject the end for fear of doing injury to the means. He would understand, too, that if he devotes two hours of the day to providing for his needs, any circumstance machinery, the fertility of the soil, a gratuitous gift, no matter what that saves him an hour of this labor, so long as the product is as great, puts that hour at his disposal, and that he can devote it to improving his well-being, He would understand, in short, that a saving in labor is nothing else than progress.
But exchange hampers our view of so simple a truth. In society, with the division of labor that it entails, the production and the consumption of an object are not performed by the same individual. Each person comes to regard his labor no longer as a means, but as an end. Exchange creates, in relation to each object, two interests, that of its producer and that of its consumer; and these two interests are always directly opposed to each other.
It is essential to analyze them and to study their nature. Take the case of any producer. In what does his immediate self-interest consist? It consists in two things: 1 that the smallest possible number of persons engage in the same kind of labor as he; and 2 that the greatest possible number of persons be in quest of the product of his labor. Political economy expresses this more succinctly in these terms: that the supply be very limited, and the demand very extensive; in still other terms: limited competition, and unlimited market.
In what does the immediate self-interest of the consumer consist? That the supply of the product he wants be extensive, and the demand limited. Since these two interests are mutually incompatible, one of them must necessarily coincide with the social or general interest, and the other must be hostile to it. But which one should legislation favor, as being the expression of the public weal—if, indeed, it should favor either one of them? To know this, it suffices to discover what would happen if the secret desires of men were fulfilled.
In so far as we are producers, it must be admitted, each of us has hopes that are antisocial. Are we vineyardists? We should be little displeased if all the vines in the world save ours were blighted by frost: this is the theory of scarcity. Are we the owners of ironworks? We want no other iron to be on the market but our own, whatever may be the public need for it, precisely because this need, keenly felt and incompletely satisfied, brings us a high price: this too is the theory of scarcity.
Are we farmers? We say, with M. Bugeaud: Let bread be costly, that is to say, scarce, and the farmers will prosper: this is still the theory of scarcity. Are we physicians? We cannot blind ourselves to the fact that certain physical improvements, such as better public sanitation, the development of such moral virtues as moderation and temperance, the progress of knowledge to the point at which everyone can take care of his own health, and the discovery of certain simple, easily applied remedies, would be just so many deadly blows struck at our profession.
In so far as we are physicians, our secret wishes are antisocial. I do not mean to say that physicians actually give expression to such wishes. I like to believe that they would welcome with joy the discovery of a universal cure; but it would not be as physicians, but as men and as Christians that they would yield to such an impulse: by a laudable art of self-abnegation, they would take the point of view of the consumer.
But in so far as the physician practices a profession, in so far as he owes to that profession his well-being, his prestige, and even the means of supporting his family, it is impossible for his desires—or, if you will, his interests—not to be antisocial.
Do we make cotton textiles? We wish to sell them at the price that is most advantageous for us. We should heartily approve the proscription of all rival manufacturers; and though we do not dare to express this wish publicly or to seek its full realization with any likelihood of success, we nevertheless attain it to a certain extent by roundabout menus: for example, by excluding foreign textiles, so as to diminish the supply, and thereby to produce, by the use of force and to our profit, a scarcity of clothing.
In the same way, we could make a survey of all industries, and we should always find that producers, as such, have antisocial attitudes. No physician takes pleasure in the good health of even his friends; no soldier, in the peace of his country; and so it goes for the rest. The sail would take the place of steam, the oar would replace the sail, and it in turn would have to yield to the wagon, the latter to the mule, and the mule to the packman. Wool would ban cotton, cotton would ban wool, and so on, until the scarcity of all things made man himself disappear from the face of the earth.
Is it very hard to imagine what sort of industrial code the public would be subjected to? If we now turn to consider the immediate self-interest of the consumer, we shall find that it is in perfect harmony with the general interest, i.
When the buyer goes to the market, he wants to find it abundantly supplied. He wants the seasons to be propitious for all the crops; more and more wonderful inventions to bring a greater number of products and satisfactions within his reach; time and labor to be saved; distances to be wiped out; the spirit of peace and justice to permit lessening the burden of taxes; and tariff walls of every sort to fall.
In all these respects, the immediate self-interest of the consumer follows a line parallel to that of the public interest. He may extend his secret wishes to fantastic or absurd lengths; yet they will not cease to be in conformity with the interests of his fellow man. He may wish that food and shelter, roof and hearth, education and morality, security and peace, strength and health, all be his without effort, without toil, and without limit, like the dust of the roads, the water of the stream, the air that surrounds us, and the sunlight that bathes us; and yet the realization of these wishes would in no way conflict with the good of society.
But why? Because, in this extreme hypothetical case, all imaginable wants and desires world be fully satisfied. Man, like the Almighty, would create all things by a simple act of volition. Will someone tell me what reason there would be, on this hypothesis, to deplore the end of industrial production? I referred just now to an imaginary legislative assembly composed of businessmen, in which each member world have the power to enact a law expressing his secret wish in his capacity as a producer; and I said that the laws emanating from such an assembly would create a system of monopoly and put into practice the theory of scarcity.
In the same way, a Chamber of Deputies in which each member considered solely his immediate self-interest as a consumer would end by creating a system of free trade, repealing all restrictive laws, and removing all man-made commercial barriers—in short, by putting into practice the theory of abundance.
Hence, it follows that to consult solely the immediate self-interest of the producer is to have regard for an antisocial interest; whereas to consider as fundamental solely the immediate self-interest of the consumer is to take the general interest as the foundation of social policy. Allow me to emphasize this point, at the risk of repeating myself. There is a fundamental antagonism between the seller and the buyer. The latter wants them abundant, in plentiful supply, and cheap.
They operate, if not intentionally, at least logically, on the assumption that a nation is rich when it is lacking in everything. For they say it is the producer who must be favored, by being assured a good market for his product.
To achieve this end, it is necessary to raise its price; to raise its price, it is necessary to limit the supply; and to limit the supply is to create scarcity.
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His contributions to liberty have been many, but while so many advocates of free markets focus on The Law , there is another book that represents his legacy even better: Economic Sophisms. This short work of essays epitomizes perhaps his most important contribution: using taut logic and compelling prose to bring the dry field of economics to hundreds of thousands of laymen. Bastiat did not, generally, clear new ground in the field of economics. He read Adam Smith and Jean-Baptiste Say and found little to add to these giants of economic thought.
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Start your review of Economic Sophisms Write a review Shelves: economics , liberalism Absolutely brilliant, proving economic theory need not be dry or boring, and also showing how very relevant to daily living it remains. Perhaps if more people had been more conversant with Bastiat, Lord Maynard Keynes John Maynard Keynes never would have gotten off the ground. Bastiat explodes so many myths prevalent in his day, and sadly, still prevalent today. Chiefly he contrasts abundance with scarcity and shows how protectionism, luddite opposition to technology and automation, and efforts Absolutely brilliant, proving economic theory need not be dry or boring, and also showing how very relevant to daily living it remains. Chiefly he contrasts abundance with scarcity and shows how protectionism, luddite opposition to technology and automation, and efforts to increase labor all lead to scarcity, while their opposites lead to abundance.
He himself so regarded them: "the one," he says, "pulls down, the other builds up. Whatever difference of opinion may exist among economists as to the soundness of this theory, all must admire the irresistible logic of the Sophismes, and "the sallies of wit and humour," which, as Mr Cobden has said, make that work as "amusing as a novel. Hence the present translation of the Sophismes is intended as a companion volume to the translation of the Harmonies. It is unnecessary for me to say more here by way of preface, the gifted author having himself explained the design of the work in a short but lucid introduction. My design in this little volume is to refute some of the arguments which are urged against the Freedom of Trade.
He was born in Bayonne, France on June 29th, After the middle-class Revolution of , Bastiat became politically active and was elected Justice of the Peace in and to the Council General county-level assembly in He was elected to the national legislative assembly after the French Revolution of Bastiat was inspired by and routinely corresponded with Richard Cobden and the English Anti-Corn Law League and worked with free-trade associations in France. Bastiat wrote sporadically starting in the s, but in 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 which was held to critical acclaim. The bulk of his remarkable writing career that so inspired the early generation of English translators—and so many more—is contained in this collection.