Bastiat as an economist.

• Author: Braun, Carlos Rodriguez
• Position: PREDECESSORS - Frederic Bastiat - Essay

Economists have not been kind to their French colleague Frederic Bastiat (1801-50), recognizing him as a mere publicist. J. S. Mill said that he "shines as a dialectician" but lamented his "parti pris of explaining away all the evils which are the stronghold of socialists" (1972, 1665). Joseph Schumpeter calls him "the most brilliant economic journalist who ever lived" but adds, "he was no theorist" (1954, 500). Mark Blaug regards Bastiat as a great writer for the layperson and a master of sustained polemics, yet a "third-rate" theorist (1986, 15). In most textbooks on the history of economic thought, Bastiat is dismissed as a popularizer or simply ignored. Marx would find this dismissal pleasing, considering that he wrote off Bastiat with these biting words: "a dwarf economist ... the most superficial and therefore the most adequate representative of apologetics of vulgar economy" (1975, 1:15, 100). Inasmuch as only the Austrian school of economics vindicates Bastiat--although Friedrich Hayek criticized him on monetary theory (Rothbard 2000, chap. XIV; Thornton 2001, 2002, 82; Hulsmann 2007, 737)--it might be argued that this vindication has more to do with Bastiat's vigorous libertarianism than with his intellectual contributions. Bastiat, nicknamed "the French Cobden," certainly was a defender of freedom (DiLorenzo 1999, 61). In the economics profession, however, many opine that he was nothing more: in Alfred Marshall's words, he was "a lucid writer, but not a profound thinker" (1952, 389,631n.). In Marshall's view, his doctrines were "extravagant ... abstract and trenchant," and "[t]he lucidity of his style caused his works to have great vogue; but he really understood economic science, in the name of which he professed to write, scarcely better than did the socialists themselves" (1961, II:533,759). John Maynard Keynes agreed and stated that in Bastiat's works one can find "the most extravagant and rhapsodical expression of the political economist religion" (1972, 281). Notwithstanding this near-consensus among the economists, we maintain that the disdained Bastiat was not only a good political scientist (Hebert 1987), but also a fine economist (Thornton 2002). A review of his ideas on method, economic order, law, value, distribution, and money proves that the "conspiracy of silence" against him--as Joseph Salerno (2006) labels it--is unwarranted.

Methodology

Bastiat follows Jean-Baptiste Say, who defended the existence of universal laws in political economy, deductive in nature and empirically testable by personal experience and observation, not by the use of statistics. Starting from the interrelation between all the sciences, Bastiat defines political economy as the study of wealth, production, distribution, and consumption. This science has "as its special field all those efforts of men that are capable of satisfying, subject to services in return, the wants of persons other than the one making the effort, and, consequently, those wants and satisfactions that are related to efforts of this kind" (1996a, 31-32).

Political economy cannot be the study of an "artificial, contrived and invented order," "[f]or if there are general laws that act independently of written laws, and whose action needs merely to be regularized by the latter, we must study these general laws; they can be the object of scientific investigation, and therefore there is such a thing as the science of political economy. If, on the contrary, society is a human invention ... then there is no such science as political economy: there is only an indefinite number of possible and contingent arrangements" (1996a, 2).

Human action is the basis of this organization, and its basis is self-interest, which is a fact and not an "adverse judgement," as describing its basis as selfishness would be. Bastiat goes back to the faculty of sense perception, pain and effort, in an analysis where everything is personal--that is to say, subjective--both the perception of the need and its satisfaction:

We are endowed with the faculty of comparing, of judging, of choosing, and of acting accordingly. This implies that we can arrive at a good or a bad judgment, make a good or a bad choice--a fact that it is never idle to remind men of when we speak to them of liberty.... [Socialists] are led to condemn even the basic motive power of human actions--I mean self-interest--since it has brought about such a state of affairs.... The question, then, is to determine whether this motivating force which, though individual, is so universal that it becomes a social phenomenon, is not in itself a basic principle of progress.... But political economy is based on this very assumption, that society is purely an association of the kind described in the foregoing formula; a very imperfect association, to be sure, because man is imperfect, but capable of improvement as man himself improves; in other words, progressive ... provided the association remains voluntary, that force and constraint do not intervene. (1996a, 7-8, 17, 27-28, emphasis in original unless otherwise noted)

Economic phenomena are human and dynamic, not immutable and not precisely measurable:

Political economy does not have, like geometry or physics, the advantage of speculating about objects that can be weighed or measured; and this is one of its initial difficulties and, subsequently, a perpetual source of error; for, when the human mind applies itself to a certain order of phenomena, it is naturally disposed to seek a criterion, a common measure to which it may refer everything, in order to give to the particular field of knowledge the character of an exact science. Thus, we note that most authors seek fixity, some in value, others in money, another ingrain, still another in labor, that is to say, in measures exhibiting the very fluctuation they seek to avoid. (1996a, 43) Bastiat goes on to exhort: "Let us, therefore, not have the presumption to overthrow everything, to regulate everything, to seek to exempt all, men and things alike, from the operation of the laws to which they are naturally subject. Let us be content to leave the world as God made it" (1996a, 330).

Both Bastiat's methodology and the importance he ascribes to method in economics are germane to Austrian economists, and both arrive at libertarianism, not only from the idea of justice or for emotional reasons, but also from the notion that a rigorous economic method leads to a liberal economic policy (Thornton 2001).

Harmony and Complexity

Two keys to Bastiat's thinking are, first, that all legitimate interests are harmonious and, second, that society is complex. Simple, mechanical solutions do not work.

For Bastiat, harmony is multidimensional: it refers to economics, but also to the accord between economics, politics, and ethics (Bastiat 1862, 7:485). Some critics have simplified Bastiat's Economic Harmonies to an angelic vision of human nature, "the optimistic image that class interests naturally and inevitably coincide to promote economic development" (Hebert 1987, 205). This characterization springs from the usual conception of classical liberalism as a naive doctrine that denies the importance of an institutional framework and trusts blindly in miraculous mechanisms such as the "invisible hand" to bring about a magical uniformity of interests. Though widespread, this conception is nothing more than a caricature because classical liberals believe in mutually beneficial voluntary agreements contingent on laws and justice: only in this context is it possible to discuss harmony (O'Brien 1975, chaps. 3, 10). The caricature affects important historians of economic thought with very different ideologies, including Eric Roll, who speaks of "the revival of a providential harmony by Bastiat" (1961, 302), and Henry Spiegel, who maintains that "Bastiat based his ultra-libertarian individualism on his optimistic and religious belief in a pre-established harmony of economic interests under which spontaneous development more than coercive institutions would result in widespread increasing incomes" (1973, 427). (1) These opinions fit poorly with Bastiat's texts, which stress that all legitimate interests are harmonious. This qualification is important because if they are harmonious, the solution to social problems is liberty. If they are not, as antilibertarians claim, then the solution is coercion, and because liberty has only one form and coercion many, politics must focus on ascertaining "which, out of all the infinite forms that coercion can assume, is the fight one" (Bastiat 1996a, xxii).

But liberty by no means implies trusting that all human interests are always harmonious. In truth, people can follow their interests to do good but also to do evil, when "instead of relying on their own labor, men too often turn to other's work." The same interest that can lead to property can lead to plunder: "Self-interest creates everything by which mankind lives and develops: it stimulates labor; it engenders property. But at the same time it brings into the world all kinds of injustice. Each kind has been given a different name, but they can all be summed up in the one word, plunder.... The fact that property and plunder have this common origin makes readily understandable the ease with which Rousseau and his modern disciples have been able to defame and disturb the social order. It sufficed to show only one of the aspects of self-interest" (Bastiat 1995, 141). An institutional framework's indispensable mission is to combat such plundering, which can take the form of robbery, violence, deception, and fraud. The existence of a framework--legal and accepted plunder--that fails to control or even abets this predatory behavior is the central theme of Bastiat's work titled The Law: "There is the plunder that is committed with the consent of the law, through the operation of the law, with the assent and often with the approval of society. It is only...