"FRÉDÉRIC BASTIAT (1801-50): Campaigner
for Free Trade, Political Economist, and a Politician in a Time of Revolution"
A Lecture by Dr. David M. Hart
[Created February 7, 2011]
[Updated
January 18, 2017]
Lecture Overview
Bastiat's Place in the History of Economic Thought
The Anglo-Scottish School - Adam Smith (1723-1790), David Ricardo (1772-1823),
J.S. Mill (1806-1873)
- theory of value or price
- a “natural” price which reflects deep underlying determinants
of the economy (land, labour, cost of production); and a “market” price
which reflects temporary, local fluctuations or changes theory of value or
price, tends towards “natural price”
- money and banking
- money as a “medium of exchange”, note issue based on gold
- trade
- opposed mercantilism and favoured free trade and deregulation
- population
- Malthusian idea of over-population
- theory of the state
- utilitarianism (regulation to increase public utility); defence, police,
public goods
The Socialist School - H. de Saint-Simon (1760-1825), P.J. Proudhon (1809-1865),
Karl Marx (1818-1883)
- theory of value or price - “labour theory of value” - working
class exploited because they do not receive the “full value” of
their labour via wages; interest, profit, rent all “unearned income” of “capitalist
class”
- money and banking
- nationalization of banks to provide “cheap credit”
- trade
- state regulation to develop “national economy”
- population
- no particular theory of pop.
- theory of the state
- nationalization of all factors of production (land, industry, banking)
to ensure “equality”; dispossession of “capitalist class” through
violent revolution or legislation
The French School (les Économistes) - Turgot (1727-1781), J.B. Say
(1767-1832), F. Bastiat (1801-1850)
- theory of value or price
- 18thC Physiocrats favoured land as “sole” productive agent; most
in 19thC followed classical view of value; Bastiat developed “pre” or “proto” Austrian
notions of value/rent
- money and banking
- hard money banking; free banking (Coquelin)
- trade
- radical free trade and deregulation; free trade vs. war; anti-socialist
- population
- Malthusian idea of over-population
- theory of the state
- natural rights defence of liberty; more radical limited state than
Anglo-school (Bastiat); early free market anarchists (Molinari); class
theory of exploited productive class vs. parasitic state and its cronies
The Marginalist/Austrian School - Léon Walras (1834-1910), W.S. Jevons
(1835-1882), Karl Menger (1840-1921)
- theory of value or price - “subject theory of value” - individuals
place a personal, subjective value on goods and services based upon their “preferences”;
market prices send “signals” to produces concerning how
and what is produced
- money and banking
- government monopoly of banking and money causes business cycle by
manipulating interest rate; need for gold standard, competitive issue of money
- trade
- free trade and laissez-faire in all areas
- population
- economic production not limited by size of population
- theory of the state
- ultra-minimal “nightwatchman” state (or no state - Rothbardians)
The rediscovery of Bastiat in the Post-WW2 Era
- Leonard E. Read (1898-1983) - Foundation for Economic Education (FEE)
- Henry Hazlitt (1894-1993) - WSJ, NYT
- Murray N. Rothbard (1926-1995)
- Pres. Ronald Reagan (1911-2004) - president 1981-1989
Marx’s Hostility towards Bastiat and Free Market Ideas
- “the most superficial and therefore the most successful representative
of apologetic vulgar economics”
- “the modern bagman of free trade”
- “a dwarf economist”
The importance of Frédéric
Bastiat
- impact on the French classical liberal movement in mid-19th century
- rediscovery of Bastiat in the modern libertarian movement
- recognition as
a brilliant stylist and polemicist
- proto-Austrian economist in his theoretical writing
- proto-public choice analysis of politics
- radical natural rights approach to individual liberty
- combined single-issue activism, journalism, election to political office,
theoretical work in a coherent whole
Chronology of His Life and Work
location of Mugron and Les Landes in SW France
The early “unseen” Bastiat
(1801-1844)
- in the provinces as provincial magistrate and landowner
- his intellectual influences
- positive: Turgot (Physiocrats), Adam Smith, JB
Say, Comte & Dunoyer,
Destutt de Tracy, R. Cobden
- negative: French monarchists/conservatives, Bonapartists, protectionists
and socialists of 1840s
The “Seen” Bastiat (1844-1850)
- the Free Trade organizer and journalist
- the politician during the 1848 Revolution and 2nd Republic
- the theorist
Bastiat’s major works
1844 - “De l’influence des tarifs français et anglais sur
l’avenir des deux peuples” in JDE Oct. 1844
1845
- Cobden et al ligue (Cobden and the League)
- Part 1 of Economic Sophisms (Part 1 1845, Part
2 1848)
- "Petition of the Candle-makers"
- 1846 - editor of Le libre échange (Free Exchagne or
Free Trade) (until 16 Apr. 1848)
1848
- “Propriété et loi” (Property and Law)
- “Justice et franternité” (Justice and Fraternity)
- “Propriété et spoliation” (Property and Plunder)
- “L’État” (The State)
1849
- “Protectionnisme et communisme” (Protectionism and Communism)
- “Capitle et rente” (Capital and Rent)
- “Paix et liberté ou le budget républicain” (Peace
and Liberty, or the Republican Budget)
- “Les incompatibilités parlementaires” (Parliamentary
Conflicts of Interest)
- “Maudit l’argent!” (Damn Money!)
1850
- part 1 of his magnum opus Economic Harmonies (part 2 published posthumously)
- “Intérêt et principal” (Interest and Principal)
- “Spoliation et la loi” (Plunder and the Law)
- “La loi” (The Law)
- “Baccalauréat et socialisme”(Baccalaureat (or High School)
and Socialism)
- “Ce qu’on voit et ce qu’on ne voit pas” (The
Seen and the Unseen)
Bastiat’s key ideas
- the economy is a harmonious network of voluntary exchanges
- a natural rights theory of individual liberty, limited state constitutionalism
- theory of rent - all exchanges are services for services
- conflict between voluntary exchange and coercion via state
- free trade and peace
- class analysis theory - producers and exchangers vs plunderers
Key Quotes from Bastiat's Writings
- The Benefits of Free Exchange: the Provisioning of Paris (Ec. Soph. I)
- Restrictions on Trade harm Consumers: the Petition of the Candlemakers
(Ec. Soph. I)
- Legal and Illegal Plunder (The Law) and The Laws of its Operation (Ec.Soph.
II)
- Unseen Negative Unintended Consequences: The Broken Window Fallacy (Seen
and Unseen)
- FB’s Definition of the State: The Great Fiction
Bastiat's enduring legacy
- monuments to Cobden and Bastiat
- the FEE editions of his works (1960s)
- LF's edition of his Collected Works