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first letter 1 - Frédéric Bastiat, Selected Essays on Political Economy [1848]

Edition used:

Selected Essays on Political Economy, trans. Seymour Cain, ed. George B. de Huszar, introduction by F.A. Hayek (Irvington-on-Hudson: Foundation for Economic Education, 1995).

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first letter1

The National Assembly now has before it an immense problem whose solution affects in the highest degree the prosperity and tranquillity of France. A new right clamors for entry into the Constitution: the right to employment. It does not merely ask for a place of its own; it lays claim wholly or partly to the place now held by the right to property.

M. Louis Blanc has already provisionally proclaimed this new right, and we know with what success.

M. Proudhon demands it in order to abolish property rights entirely.

M. Considérant does so in order to render the right to property more secure by legitimizing it.

Thus, according to these political theorists, there is in property something unjust and false, a deadly germ. I propose to demonstrate that property is truth and justice itself, and that what it has within it is the principle of progress and life.

They seem to think that in the struggle that is going to take place, the poor have a stake in the triumph of the right to employment, and the rich, in the defense of the right to property. I believe that I can prove that the right to property is essentially democratic, and that all that denies or violates it is basically aristocratic and anarchistic.

I hesitated to ask for space in a newspaper for a dissertation on political economy. Here is what may justify this attempt.

First, the seriousness and the immediacy of the subject.

Next, Messrs. Louis Blanc, Considérant, and Proudhon are not only political theorists; they are also leaders of schools of thought, and they have behind them numerous and ardent followers, as evidenced by their presence in the National Assembly. Their doctrines exercise at present a considerable influence—harmful, in my opinion—in the business world, and, what cannot but be a matter of grave concern, their point of view can be supported by concessions made to it by the orthodox masters of economics.

Finally—why not admit it?—something deep within my consciousness tells me that in the midst of this heated controversy it will perhaps be possible for me to shed an unexpected ray of light upon the problem in an area in which the reconciliation of divergent schools of thought can sometimes be effected.

This is enough, I hope, for these letters to find favor among my readers.

I should first set forth the criticism that is directed against property.

Here it is, in short, as M. Considérant expounds it. I do not believe I have altered his theory in condensing it.2

Every man legitimately possesses what his labor has produced. He can consume it, give it away, exchange it, or bequeath it, without anyone, not even society as a whole, having anything to say about it.

The landowner, then, legitimately possesses not only the products of the soil that he has produced, but, besides, the additional value that he has given to the soil itself by cultivating it.

But there is one thing that he has not created, that is not the fruit of any labor: the virgin soil, the primordial capital, the productive power of natural resources. Now, the landowner has taken possession of this capital. This is usurpation, confiscation, injustice, permanent wrongdoing.

The human race has been placed on this earth in order to live and to prosper here. The whole of mankind, then, is the usufructuary of the surface of the earth. But now that surface has been appropriated by the few, to the exclusion of the many.

It is true that this appropriation is inevitable; for how cultivate the land if every man could exercise at random and at will his natural rights, that is, the rights of a savage?

Property, then, must not be destroyed, but it must be legitimized. How? By the recognition of the right to employment.

Actually, primitive peoples exercise their four rights (hunting, fishing, food-gathering, and pasturing) only on condition that they engage in labor; it is, then, on the same condition that society owes to the proletarians the equivalent of the usufruct of which it has deprived them.

In short, society owes to all members of the human race, on condition that they work, a wage that puts them on a footing that compares favorably with that of savages.

Then property will be legitimized in all respects, and a reconciliation will be effected between the rich and the poor.

That is all there is to the theory of M. Considérant.3 He asserts that this question of property is one of the simplest, that it requires only a little common sense to solve it, and that, nevertheless, no one before him has understood it at all.

The compliment is hardly flattering to the human race; but, on the other hand, I can only marvel at the extreme modesty of the author's conclusions.

What does he, in fact, ask of society?

That it recognize the right to employment as the equivalent of the usufruct of the virgin soil, for the profit of the whole of mankind.

And how much does he estimate that equivalent is worth?

What the virgin soil can afford as a living to savages.

As this is barely sufficient to support one inhabitant in five square miles, the landowners of France can certainly legitimize their usurpation very cheaply. They have only to promise to raise the standard of living of thirty to forty thousand landless workers all the way up to that of the Eskimos.

But what am I saying? Why speak of France? In this system there is no longer any France, there is no longer any national property, since the usufruct of the land belongs by natural right to the whole human race, to mankind.

But I do not intend to examine M. Considérant's theory in detail. That would lead me too far. I want to deal only with what is important and serious in the basis of this theory: I mean the question of land rent. The system of M. Considérant may be summarized thus: An agricultural product exists by virtue of the co-operation of two actions: the action of man, or labor, which prepares the way for the right to property; and the action of Nature, which should be free of charge, and which the landowners turn unjustly to their profit. This is what constitutes usurpation of the rights of the human race.

If, then, I succeed in proving that men, in their business transactions, pay one another only for their labor, that they do not include in the price of the things exchanged the action of Nature, M. Considérant should deem himself completely satisfied.

The complaints of M. Proudhon against property are absolutely the same. “Property,” he says, “will cease to be illegitimate when services are reciprocal.” Then, if I demonstrate that men exchange only services with one another, without ever charging one another a centime for the use of those forces of Nature that God has given free of charge to all men, M. Proudhon, for his part, will have to agree that his utopia has been attained.

These two political theorists will then have no further basis for demanding the right to employment. It is of little consequence that this famous right is viewed by them from such diametrically opposite positions that, according to M. Considérant, it should legitimize property, whereas, according to M. Proudhon, it should abolish it. The fact remains that it can no longer be an issue, provided that it is clearly proved that, under the system of private ownership, men exchange labor for labor, effort for effort, work for work, service for service, the contribution of Nature always being something given without charge, into the bargain; so that the forces of Nature, which were designed to be free of charge, remain so throughout all human transactions.

Obviously, what is at issue here is the legitimacy of land rent, because it is assumed that it is, wholly or partly, an unjust payment that the consumer makes to the landowner, not for a personal service, but for the gratuitous gifts of Nature.

I have said that our modern reformers could find some support in the opinions expressed by the principal economists.4

In fact, Adam Smith says that rent is often a reasonable interest on the capital expended for the improvement of the land, but that this interest is also often only a part of the rent.

McCulloch* makes this positive declaration about it:

What is properly termed rent is the sum paid for the use of the natural and inherent powers of the soil. It is entirely distinct from the sum paid for the use of buildings, enclosures, roads, or other improvements. Rent, then, is always a monopoly.

Buchanan† goes so far as to say:

Rent is a part of the income of the consumers that passes into the pocket of the landowner.

Ricardo:‡

A portion of the rent represents the interest on the capital which had been employed in improving the land, and in erecting .... buildings, .... etc.; the rest is paid for the use of the original and indestructible powers of the soil.

Scrope:§

The value of land and its power of yielding rent are due to two circumstances: first, the appropriation of its natural powers; second, the labor applied to its improvement. Under the first of these relations, rent is a monopoly. It restricts the usufruct of the gifts that God has given to men for the satisfaction of their wants. This restriction is just only in so far as it is necessary for the common good.

Senior:*

The instruments of production are labour and natural agents. Natural agents having been appropriated, proprietors charge for their use under the form of rent, which is the recompense for no sacrifice whatever and is received by those who have neither laboured nor put by, but who merely hold out their hands to accept the offerings of the rest of the community.

After having said that a part of the land rent corresponds to the interest on capital, Senior adds:

The surplus is taken by the proprietor of the natural agents and is his reward, not for having laboured or abstained, but simply for not having withheld when he was able to withhold, for having permitted the gifts of Nature to be accepted.

Certainly, at the moment of entering upon a struggle with men who proclaim a doctrine plausible in itself, apt to arouse hopes and to evoke a sympathetic response among the suffering classes, and basing itself on such authorities, it will not do to close one's eyes to the seriousness of the situation or to contemn our opponents as mere dreamers, utopians, madmen, or even revolutionaries. We must study and resolve this question once and for all. It is well worth a moment of tedium.

I believe that the question will be resolved in a manner satisfactory to all if I prove that the landowner not only leaves the gratuitous usufruct of natural resources to what are called the proletarians, but also increases that usufruct ten and a hundred times. I venture to hope that from this demonstration a clear view will emerge of certain harmonies able to satisfy the understanding and to meet the demands of all schools of thought: political economists, socialists, and even communists.5

[*][John Ramsay McCulloch (1789–1864), British economist and statistician and author of Principles of Political Economy (1825).—Translator.]

[†][David Buchanan, the younger (1779–1848), journalist and author on economic subjects, editor of Adam Smith's works in 1814.—Translator.]

[‡][David Ricardo (1772–1823), English economist of the classical school.—Translator.]

[§][George Poulett Scrope (1797–1876), English economist and geologist, prolific writer of pamphlets, particularly in refutation of the Malthusian theory.—Translator.]

[*][Nassau William Senior (1790–1864), English economist and first professor of political economy at Oxford.—Translator.]

[1.]See the little volume published by M. Considérant under the title, Théorie du droit de propriété et du droit au travail (Theory of the Right to Property and of the Right to Employment).

[2.]Op. cit.

[3.]M. Considérant is not the only one who holds it, as witness the following passage, taken from The Wandering Jew of Eugène Sue:

“Mortification would best express the complete lack of those things essential to life that an equitably organized society would owe, yes, would compulsorily owe, to every active and honest worker, since civilization has dispossessed him of all rights to the soil, and he is born with only his hands as his patrimony.

“The savage does not enjoy the advantages of civilization; but at least he has the animals of the forests, the birds of the air, the fish of the rivers, and the fruits of the earth to nourish him, and the trees of the great woods to shelter and warm him.

“Disinherited of these gifts of God, the civilized man who regards property as holy and sacred can, then, in return for his hard daily labor which enriches the country, demand a wage sufficient to live healthily—nothing more, and nothing less.”

[4.][This proposition is more fully developed in chap. 5 and chap. 9 of Economic Harmonies.—Editor.]

[5.][See at the end of this pamphlet the protest that this first letter provoked from M. Considérant, and the reply of Bastiat.—Editor.]