Relevance of Frederic Bastiat

Sauvik Chakraverti SPEECH AT THE RELEASE OF

“THE ESSENTIAL FREDERIC BASTIAT”

We are gathered here to honour the memory of a man whom the world forgot, but at its own peril.

 

Frederic Bastiat and Karl Marx were contemporaries, but it was Marxism that attracted half the world, including India, while the Liberty that Bastiat upheld was sacrificed at the altar of socialist equality and statism.

 

Unfortunately, when false theories of society are put into practice, horrendous consequences inevitably follow. This does not happen immediately, but in the course of a few decades it slowly becomes apparent that something has gone very wrong.

 

This is the position that much of the world, including India, is in today. The former Soviet Union and its East European satellites have all abandoned their past beliefs, as has Communist China. Marx is seen by everyone in these countries as a false prophet. At such a moment of time, it becomes pertinent to place before our fellow-Indians the writings of a man who, 160-170 years ago, flew the flag for the other side: classical liberalism, free international trade and free markets, justice and the rule of law, and individual claims to private property. The world has lost more than a century chasing wrong ideas. Let us lose no more time; let us study Bastiat instead of Marx; and let us strive for that harmonious world of natural liberty that every educated European and American believed in between 1700 and 1850.

 

Frederic Bastiat died more than 150 years ago. To read him is to appreciate the fact that people like me cannot be called ‘neo-liberals’. There is nothing ‘new’ about liberalism, which has deep classical roots. Rather, socialism and communism are ‘new’ ideas, as indeed are ‘social democracy’, trade unionism and the welfare state. Mankind seems to be ruled entirely by new, previously untried ideas. Let us therefore turn back to old, tried and tested ideas. These have worked in the past, and only these can work in the future. Bastiat’s writings represent the hallowed traditions of liberalism – a belief-system so old that it deserves the title ‘classical’.

 

What makes us all very proud of this volume we are releasing here is the sad fact that almost no one today has heard the name Frederic Bastiat. This great man is almost entirely unknown in the country of his birth, France, a nation that took to socialism in such a big way that it ultimately lost its dynamism and became the ‘sick man of Europe’. When Margaret Thatcher told a Paris audience that her favourite economist was the Frenchman Bastiat, not a single person present could lay a claim to having heard of the man, let alone read him.

 

In my own case, as I have recounted in my foreword to this book, I first heard of Bastiat from a dentist – and this, after having studied Economics for over 20 years!

 

There are innumerable histories of economic and political thought, from John Kenneth Galbraith’s “A History of Economics” to Lord Eric Roll’s “A History of Economic Thought”, that make no mention of Bastiat. Newer editions of Heilbroner’s popular “The Worldly Philosophers” do mention Bastiat, but in passing. I sincerely doubt whether students anywhere in the world are exposed to Bastiat’s writings.

 

In such an atmosphere of neglect it is indeed highly creditable that a think-tank like India’s Liberty Institute should take the lead and produce the first ever ‘essential’ Bastiat, a collection of his most representative as well as profound works. It is a boon for students, for journalists, and for all those citizens who take a serious interest in serious matters. I am confident that they will enjoy this book and be enlightened by it. Thereafter, it is hoped that they will all work to ensure that the memory of Frederic Bastiat never dies. I may add that if, after enjoying this sample of his works, they want to read every word Bastiat wrote, then www.econlib.org, the website of Liberty Fund, is the place to visit.

 

Allow me to proceed to a description of this book that we are releasing to the public and the press today.

 

A very valuable contribution to this book has come from Dr Detmar Doering of the Liberal Institute in Potsdam, Germany, who is himself a great fan of Bastiat. Without this detailed description of Bastiat’s life and times, this book would have been woefully inadequate. Now, the reader will get to know the real man: a frail orphan working in his grandfather’s shop in a port city, thereby getting interested in the economic and social effects of tariffs; setting up a self-study and debating society where such serious issues are discussed; becoming a justice of the peace; becoming infatuated with Cobden, Bright and the Manchester Free Trade Movement; as a political activist for free trade; as a journalist and pamphleteer; and finally as a parliamentarian. Bastiat was not an armchair philosopher at all. Thanks to this excellent contribution from Dr Doering, the reader of this volume will now get an authentic flavour of Bastiat, and the politically troubled times he lived in.

 

We begin Bastiat’s writings with “To The Youth”. I have chosen this piece to open his account because the youth are the future and the future is theirs in turn. If they believe, like Bastiat, in natural liberty, this country will surely change. India is a very young country, and the vast majority are young. It is to them that this book is dedicated. Allow me to quote the first paragraph:

Eagerness to learn, the need to believe in something, minds still immune to age-old prejudices, hearts untouched by hatred, zeal for worthy causes, ardent affections, unselfishness, loyalty, good faith, enthusiasm for all that is good, beautiful, sincere, great, wholesome, and spiritual—such are the priceless gifts of youth. That is why I dedicate this book to the youth.

This opening paragraph reflects Bastiat’s love for young people, and I am confident that this sincere love will be reciprocated. That is why I have chosen this as the opening essay.

 

The second essay on “Natural and Artificial Social Order” is important from a philosophical point of view, because it presents the old classical liberal belief that when all men are guided by legitimate self-interest, harmony reigns, and the whole of society benefits. I do believe that these two essays will have every young reader hooked. They will see why socialism is actually ‘sociopathic’, seeking to destroy the natural harmony of a people – a natural harmony that socialists despise, because they cannot understand it.

 

These two opening essays contain the germ of the classical liberal world-view, but with a clarity and passion that surpasses all previous efforts, including those by Adam Smith himself. Bastiat is easier to read than Smith, his examples from real life are infinitely superior, and for this reason he is far more convincing.

 

The other essays in Part One will only expand the reader’s understanding of the essential role of competition (competition is liberty and the absence of competition is tyranny), the nobility of the idea that each man is for himself and by himself (and not ‘all for one, one for all’ – which is socialism), and how to end all wars forever, by promoting trade between warring nations.

 

Part Two showcases Bastiat as a free trader, beginning with his justifiably famous “Candlemakers’ Petition” – a satire on protectionism in which the candlemakers of France petition their government to pass laws banning all windows because they cannot compete with the sun, which gives free light half the day. The reader will love Bastiat’s wit, so rare among economists, so much so that Economics has for long been called a “dismal science”. There is nothing ‘dismal’ at all about Bastiat’s prose. On the contrary, his writings possess an electrifying quality.

 

However, there are 11 more essays in this section on Bastiat the free trader, and all of them are equally worthy of note, beginning with his essays against ‘reciprocity’ in trade. No economist before him and no economist since has examined the notion of ‘reciprocity’ – and dismissed it as totally false and baseless. Bastiat stood for unilateral free trade. That is: Free trade without a WTO.

 

Of the other essays in this section, there is one called “Protectionism, or the Three Aldermen” which is in the form of a play in four acts. This exposes the corrupt politics of “import-substitution industrialization”, as well as the beggaring of society that inevitably results from its practice. I hope that in schools and colleges throughout India, students will enact this play.

 

Part Three of this book is entitled “The Genius of Bastiat”, and contains 3 essays on political economy, of which “The Law” is the most famous. Liberty Institute published “The Law” as a single monograph many years ago, and this timeless defense of private property is presented here once again, when in Nandigram and Singur the Communists are overriding the ‘just’ claims of the people to their own lands. Indeed, Bastiat begins “The Law” by saying how the law, under collectivists, becomes guilty of the very crimes it is meant to punish. The Law is meant to punish theft; but in Nandigram, Singur, and countless other cases, including the nationalizations of banks, coal mines, Air India, and insurance companies, it is the law that has been guilty of robbery. This essay is the work of a classical liberal whose interests went far beyond Economics, to the very soul of government, which is the law. In a nation like India, whose constitution does not grant the citizenry a fundamental right to property, this essay deserves to be widely read, if only to understand how dangerously false socialist and communist ideas of “collective property” (which is fiction) really are.

 

“What is Seen and What is Not Seen” is another work of sheer genius, but this time as an economist of unmatched perception. Bastiat begins with the example of a window-pane being broken by a hoodlum. He then proceeds to show how the fact that the town glazier now gets 100 francs to replace the window-pane does not mean that the town has benefited from this destruction of property, because the owner of the window has had to sacrifice the new coat he was saving for in order to pay for the replacement window. That is, the coat-makers loss of business (what is not seen) is the glazier’s gain (what is seen); but the town has ultimately lost, because property has been destroyed. This is a powerful essay against all kinds of wrong-headed ideas, from the widely-held belief that wars cause business gains because re-construction is required, to the hoax called ‘employment generation’ in India, where the same amount of employment would ensue if tax-payers spend the money themselves. It is noteworthy that the great American libertarian author and journalist, Henry Hazlitt, wrote his “Economics in One Lesson” based entirely on this essay of Bastiat’s. I am positive everyone who reads this essay will be thunderstruck by it. According to the Nobel laureate Friedrich Hayek, Bastiat deserves to be called a genius for this essay alone.

 

The short essay “The State” is satirical, but a work of genius nonetheless, in this instance as a political scientist. Bastiat begins by asking the citizenry, all the ladies and gentlemen present, to relate their favourite ideas on what should be done for the country’s benefit – and it invariably turns out that all their ideas involve a huge role for the State. This will ultimately lead to a situation, Bastiat says, when the State becomes ‘that fictional entity by which everyone tries to live off everyone else’. Bastiat then calls for a State whose only role is the administration of Justice.

 

Finally, in Part Four, we present Bastiat’s personal manifesto as he sought to be elected to parliament in 1846. It is a remarkable document because it reflects the parliamentary programme of a liberal. Bastiat wanted government to be ‘confined to its limits’ and he even opposed State education (because the State would teach false theories). He also wanted an end to the French colonization of Algeria. I hope all aspiring ‘representatives of the people’ benefit from reading this, as do those who might elect them. This manifesto has been recently unearthed by Jacques Guenin of the Cercle Bastiat, and is appearing in a book for the first time.

 

I conclude with a para from “To the Youth”, the essay with which this book begins. Here, Bastiat tells us who his real enemies are, and against whom he is writing:

Predatory men, you who, by force or fraud, in spite of the law or through the agency of the law, grow fat on the people’s substance; you who live by the errors you disseminate, by the ignorance you foster, by the wars you foment, by the restraints you impose on trade; you who tax the labour you have made unproductive, making it lose even more than you snatch away; you who charge for the obstacles you set up, so as to charge again for those you subsequently take down; you who are the living embodiment of selfishness in its bad sense; parasitical excrescences of faulty policies, prepare the corrosive ink of your critique: to you alone I make no appeal, for the purpose of this book is to eliminate you….

We too need to eliminate such ‘predatory men’ from our midst. And, more importantly, the erroneous ideas which prop them up, and which they disseminate – what with the ‘education cess’. My own book “Antidote: Essays Against the Socialist Indian State” (Macmillan India: 2000) argued that ours is indeed a “predatory state”. This is because it is based on wrong ideas – like socialism. It is because of this wrong idea that in India today, even the police are predatory, snatching away the surpluses of all small traders. This is how false social theories lead to barbaric governmental practices. There can never be any compromise with false theory. And, following that, there must not be any compromise with the predatory state, and its police, either.

 

It is noteworthy that one of Bastiat’s closest friends and allies was the economist Gustave de Molinari, who further developed and radicalized Bastiat’s ideas to a fully-fledged anarcho-capitalism, where even the “production of security” – i.e. police and judiciary – were to be privatized. If India is to be free, we must proceed beyond Bastiat. We must head for the private production of security that Bastiat’s friend Molinari was the first ever to contemplate. There is now a Molinari Society in the USA. Let us hope that Liberty Institute will publish an ‘Essential Molinari’ someday soon!

 

Thank you all for being here at the launch of “The Essential Frederic Bastiat”.

 

I wish you all a delightful as well as extremely enlightening read.