"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