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Bastiat’s Malthusian theory of the growth of the state (1847)

The French economist Frédéric Bastiat (1801-1850) believed that the state would continue to expand in size until it over-reached the ability or willingness of the taxpayers to fund it:

And yet the state, which, after all, is composed of men (although nowadays this is denied, at least by implication), obeys the universal tendency. It wants to serve us a great deal—more, indeed, than we desire—and to make us accept as real services what are often far from being such, and all this for the purpose of exacting some services from us in return in the form of taxes.

The state too is subject to the Malthusian law. It tends to expand in proportion to its means of existence and to live beyond its means, and these are, in the last analysis, nothing but the substance of the people. Woe to the people that cannot limit the sphere of action of the state! Freedom, private enterprise, wealth, happiness, independence, personal dignity, all vanish.

In ordinary, private transactions each party remains the sole judge both of the service he receives and of the service he performs. He can always either decline the exchange or make it elsewhere; hence the need of offering in the market only such services as will find voluntary acceptance.

This has not been true of the state, especially prior to the establishment of representative government. Whether or not we need its services, whether they are real or spurious, we are always obliged to accept what it provides and to pay the price that it sets.

Now, it is the tendency of all men to exaggerate the services that they render and to minimize the services they receive; and chaos would reign if we did not have, in private transactions, the assurance of a negotiated price.

This assurance is completely, or almost completely, lacking in our transactions with the government. And yet the state, which, after all, is composed of men (although nowadays this is denied, at least by implication), obeys the universal tendency. It wants to serve us a great deal—more, indeed, than we desire—and to make us accept as real services what are often far from being such, and all this for the purpose of exacting some services from us in return in the form of taxes.

The state too is subject to the Malthusian law. It tends to expand in proportion to its means of existence and to live beyond its means, and these are, in the last analysis, nothing but the substance of the people. Woe to the people that cannot limit the sphere of action of the state! Freedom, private enterprise, wealth, happiness, independence, personal dignity, all vanish.

(And a bit further down in the same same chapter, concerning “theocratic plunder”, he states) The extent to which this method of plunder is practiced is always in inverse proportion to the perspicacity of the people, since it is in the nature of abuses to go as far as they can. Not that high-minded and dedicated priests cannot be found in the midst of the most ignorant people; but what is to stop a knave from donning the cassock and seeking to wear the miter? Plunderers conform to the Malthusian law: they multiply with the means of existence; and the means of existence of knaves is the credulity of their dupes. Seek as one will, there is no substitute for an informed and enlightened public opinion. It is the only remedy.

About this Quotation:

Although Bastiat rejected the dire predictions made by Thomas Malthus about the inability of the economy to produce enough food to feed an ever expanding population, he did believe a Malthusian principle applied which limited the ability of the state to expand its size. In the two opening chapters which he inserted rather awkwardly at the beginning of the second series of the Economic Harmonies (published in Jan. 1848) he sketches his theory of plunder which he hoped to turn into a book. At each stage through which society passed - slavery, theocracy, monopoly, socialism - the state and the privileged elites which controlled it would increase its size, the taxes it extracted from the tax payers, and the number of vested interests it supported as exploiters and beneficiaries of privilege, until the people either could not or would not continue to pay for its upkeep. The state would then face a fiscal crisis, would have to contract in size to fit the means of existence it could extract from taxpayers, and then the entire process would begin again until another fiscal crisis was reached. Bastiat did not live long enough to write this book on the sociology of the state and the nature of plunder.

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