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Second Series, Chapter 11: The Utopian 53* - Frédéric Bastiat, Economic Sophisms [1845]

Edition used:

Economic Sophisms, trans. Arthur Goddard, introduction by Henry Hazlitt (Irvington-on-Hudson: Foundation for Economic Education, 1996).

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Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


Second Series, Chapter 11

The Utopian53*

"If only I were His Majesty's prime minister....!"

"Well, what would you do?"

"I would begin by .... by .... really, by being very much embarrassed. For after all, I should not be prime minister if I did not have a majority; I should not have a majority if I did not win it for myself; I should not have won it for myself, at least by honorable means, if I did not govern according to its ideas..... Thus, if I undertook to make my ideas prevail by opposing those of the majority, I should no longer have a majority; and if I did not have a majority, I should no longer be His Majesty's prime minister."

"I shall assume that you are and that consequently the majority do not stand in your way. What would you do?"

"I should first seek for ways of attaining justice."

"And then?"

"I should seek for ways of improving well-being."

"And next?"

"I should seek to determine whether they are mutually compatible or antagonistic."

"And if you found that they are incompatible?"

"I should say to King Philip:
" 'Take back your cabinet post.'
"The rhyme is not rich, and the style is old-fashioned,
"But do you not see that this is much better
"Than these transactions against which good sense protests
"And that honesty speaks out there quite pure?"54*

"But suppose you discover that both justice and well-being are attained by one and the same means?"

"Then I shall proceed straight on."

"Very well. But in order to attain well-being by way of justice a third element is required."

"And what is that?"

"The opportunity."

"You granted me that."

"When?"

"Just now."

"How?"

"By conceding me a majority."

"This seems a risky concession to have made, after all, for it implies that the majority clearly sees what is just and what is useful, and sees no less clearly that they are in perfect harmony."

"And if the majority saw all this so clearly, good would result, so to speak, all by itself."

"This is the point to which you are constantly directing my attention: that reform is possible only by way of progress in general enlightenment."

"And that such progress renders every necessary reform inevitable."

"Admirably put. But this prerequisite progress is itself a little slow and long-drawn-out. Let us assume it to have been accomplished. What would you do? For I am most eager to see you set to work, getting things done and putting your ideas into practice."

"First, I should reduce the postage on letters to ten centimes."

"I understood you to say five centimes."55*

"Yes; but since I have other reforms in mind, I must proceed cautiously if I am to avoid a deficit."

"Gracious! What discretion! Your proposal already involves a deficit of thirty millions."

"Next, I should reduce the tax on salt to ten francs."

"Fine! That will give you another deficit of thirty millions. You have doubtless invented a new tax?"

"Heaven preserve me from that! Besides, I do not pretend to have so inventive a mind."

"Nevertheless, it takes a great deal.... Ah! I have it. Why did I not think of it before? You are simply going to reduce expenditures. It never occurred to me."

"You are not the only one who has overlooked that possibility. I do plan on resorting to such measures, but for the moment, they are not what I am counting on."

"Yes, very likely. You reduce revenue without reducing expenditures, and you avoid a deficit?"

"Yes, by reducing other taxes at the same time."

(Here, the interlocutor, touching his brow with the index finger of his right hand, sadly shakes his head, which may be translated as: "He's out of his mind.")

"To be sure, this scheme of yours is most ingenious. I now pay one hundred francs into the treasury; you reduce my salt tax by five francs and my postal rate by five francs; and, in order for the treasury to receive no less than one hundred francs, you are going to reduce some other tax of mine by ten francs."

"Exactly! You have quite caught my meaning."

"Devil take me if I have! I am not even sure that I heard you aright."

"I repeat that I recoup one tax reduction by another."

"The deuce you do! I have a few moments to spare; I might as well use them to hear you expound this paradox."

"The whole mystery is easily explained: I know a tax that costs you twenty francs, of which not a centime reaches the treasury; I have half of it refunded to you and the other half sent to the tax collector."

"Really, you are a peerless financier! There is only one problem. In what way, if you please, do I pay a tax that does not go to the treasury?"

"How much did that suit cost you?"

"One hundred francs."

"And if you had had the cloth brought from Verviers,56* how much would it have cost you?"

"Eighty francs."

"Then why did you not order it from Verviers?"

"Because that is interdicted."

"And why is it interdicted?"

"So that the suit would cost me one hundred francs instead of eighty."

"That interdiction thus costs you twenty francs."

"Without a doubt."

"And where do these twenty francs go?"

"Where would they go? To the textile manufacturer."

"Very well. Give me twenty francs for the treasury, I shall have the interdiction removed, and you will still be ten francs ahead."

"Oh, I am beginning to see it all clearly now. This is what the balance sheet of the treasury would look like: five francs lost on the postal service, and five francs on salt; and ten francs gained on the cloth. Hence, everything comes out even."

"And here is what your own balance sheet would show: five francs gained on salt, and five francs on the postal service; and ten francs on the cloth."

"Total, twenty francs. This proposal is very agreeable to me. But what will happen to the unfortunate textile manufacturer?"

"Oh, I have not forgotten him. I manage to find some way of compensating him, always by means of tax reductions that will be profitable for the treasury; and what I have done for you in regard to cloth, I shall do for him with respect to wool, coal, machinery, etc.; so that he will be in a position to lower his price without suffering any loss."

"But are you sure that everything will balance?"

"The tendency will be all in that direction. The twenty francs that I have you gain on the cloth will be increased by those I shall save you on meat, fuel, wheat, etc. That will amount to a good deal; and a like saving will be realized by each of the thirty-five million of your fellow citizens. There is enough there to buy all the cloth in Verviers and Elbeuf57* too. The nation will be better clothed, that is all."

"I shall have to think about it; for it is all a little confused in my mind."

"After all, as far as clothing is concerned, the essential thing is to be clothed. Your limbs are your property, and not that of the manufacturer. Protecting them from the cold is your business, and not his. If the law takes his side against you, the law is unjust, and you have authorized me to reason according to the hypothesis that what is unjust is harmful."

"Perhaps I have gone too far, but continue the description of your financial plan."

"Then I shall make a tariff law."

"In two folio volumes?"

"No, in two articles."

"Then, for once, people will no longer say that the famous axiom, 'Ignorance of the law is no defense,' is a fiction. Let us see your tariff, then."

"Here it is:

" 'Art. 1. All imported goods shall pay a duty of five per cent ad valorem.' "

"Even raw materials?"

"Unless they have no value."

"But they all have some, more or less."

"In that case, they shall pay more or less."

"How do you expect our factories to compete with foreign factories that get their raw materials duty-free?"

"Assuming that government expenditures remain the same, if we shut off this source of revenue, we shall have to open up another; that will not lessen the relative inferiority of our factories, and there will be one more government bureau to establish and pay for."

"True; I was reasoning as if it were a question of abolishing the tax and not of redistributing it. I shall have to think about that. Let us see your second article."

" 'Art. 2. All exported goods shall pay a tax of five per cent ad valorem.' "

"Mercy on us, Mr. Utopian! You are going to get yourself stoned, and, if need be, I shall cast the first stone."

"We have supposed that the majority is already enlightened."

"Enlightened! Do you maintain that an export tax is not burdensome?"

"Every tax is burdensome, but this one is less so than any other."

"I suppose a certain amount of eccentric behavior must be expected at carnival time. Please be so kind as to make this new paradox plausible, if you can."

"How much did you pay for this wine?"

"One franc a liter."

"How much would you have paid outside the customs gate?"

"Fifty centimes."

"Why this difference?"

"Ask at the octroi, where they took ten sous extra."

"And who created the octroi?"58*

"The commune of Paris, in order to pave and light the streets."

"Then it is an import duty, is it not? But suppose it were the adjacent communes that had erected the octroi for their benefit, what then?"

"I should nonetheless pay one franc for my fifty-centime wine, and the additional fifty centimes would go for the paving and lighting of the streets of Montmartre and Les Batignolles."59*

"So that it is ultimately the consumer who pays the tax?"

"That is beyond doubt."

"Then, by imposing a duty on exports, you make foreigners contribute toward the payment of your expenses."

"Here I must find fault with you, for what you are proposing is no longer justice."

"Why not? In order to make a product, a country must have a school system, police, roads—all things that cost money. Why should not foreigners, if they are the ultimate consumers, bear all the costs involved in making the product?"

"But that is contrary to received opinion."

"Not in the least. The ultimate consumer should defray all the direct or indirect costs of production."

"Whatever you may say, it is as clear as can be that such a measure would paralyze trade and cut us off from our foreign markets."

"That is an illusion. If you had to pay this tax over and above all the others, you would be right. But if the one hundred millions levied in this way reduce other taxes by the same amount, your products now appear on foreign markets with all your advantages, and even with greater advantages if this tax proves less burdensome and costly."

"I shall give the matter some thought. And so, that takes care of salt, the postal service, and the customhouse. Are you all finished?"

"I have hardly begun."

"Please, acquaint me with your other utopian ideas."

"I lost sixty millions on salt and the postal service. The customs duty allows me to recoup them; but it gives me something still more valuable."

"And what in the world is that, if you please?"

"International relations founded on justice, and a probability of peace that is equivalent to a certainty. I shall demobilize the army."

"The whole army?"

"Except for the special branches, which will be recruited voluntarily, like all other professions. You see what I mean; conscription is abolished."

"I beg your pardon, sir. You must use the term recruitment."

"Ah! I forgot. It is amazing how easy it is, in certain countries, to perpetuate the most unpopular policies by giving them another name."

"The same is true of combined duties, which have become indirect taxes."60*

"And the police61* have taken the name of municipal guards."

"In brief, you are disarming the country in expectation of a utopia."

"I said that I would disband the army, not that I would disarm the country. On the contrary, I expect to give it an invincible armed force."

"How do you extricate yourself from such a tangle of contradictions?"

"I propose to summon all the citizens into service."

"It was hardly worth your trouble to discharge a few soldiers only to call everybody back into the service."

"You did not make me prime minister simply to leave things just as they are. Therefore, on attaining power, I shall say, like Richelieu:62* 'The maxims of the state have changed.' And my principal maxim, which shall serve as the fundamental principle of my administration, is this: Every citizen must know how to do two things: to provide for his own existence and to defend his country."

"That does seem to me, at first sight, to show at least some glimmerings of good sense."

"Consequently, I propose to base the national defense on a law containing two articles:

" 'Art. 1. Every able-bodied citizen, without exception, shall remain in service for four years, between the ages of twenty-one and twenty-five, to receive military training.' "

"A big saving, indeed! You discharge four hundred thousand soldiers and create ten million."

"Wait for my second article.

" 'Art. 2. Unless he proves, at the age of twenty-one, that he has completely mastered platoon drill.' "

"I did not expect that ending. In order to avoid four years of service, our young men would surely vie with one another in learning 'squads-right!' and 'forward march, double time!' The idea is fantastic."

"It is better than that. For, after all, without bringing sorrow to any family or violating the principle of equality, does it not assure the country, in a simple and inexpensive manner, ten million defenders capable of defying a coalition of all the standing armies in the world?"

"I must say that, if I were not a cautious man, I should end by giving support to these fantastic ideas of yours."

The utopian, warming to his subject: "Thank heaven, I have found a means of reducing my budget by two millions! I shall abolish the octroi, reform the system of indirect taxation...."

"Just a moment, Mr. Utopian!"

The utopian, warming more and more to his subject: "I shall establish freedom of religion and freedom of education.63* New projects: I shall buy the railroads,64* repay the national debt, and halt speculation."

"Mr. Utopian!"

"Freed from excessive responsibilities, I shall concentrate all the powers of the government on suppressing fraud, on administering prompt and equal justice to all, . . . ."

"Mr. Utopian, you are undertaking too many things; the nation will not follow you!"

"You gave me a majority."

"I take it away from you."

"Very well! In that case I am no longer prime minister, and my plans remain what they are, utopian."

[53.][First published in Le Libre échange, January 17, 1847.—EDITOR.]

[54.] [Bastiat again offers a parody of Molière, this time the words of Alceste in the dialogue about the poor sonnet, from The Misanthrope, Act I, scene ii.—TRANSLATOR]

[55.] [In fact, the author had said five centimes, in May, 1846, in an article in the Journal des économistes, which became chapter 12 in the second series of Economic Sophisms.—EDITOR.]

[56.] [A textile-manufacturing city in Belgium.—TRANSLATOR]

[57.][A textile-manufacturing city in France, near Paris.—TRANSLATOR]

[58.] [A local tax on certain commodities (foodstuffs, liquids, fuels, fodder, building materials, etc.) imposed as a condition of their being brought into a town or district. The term is also used, by extension, as here, to refer to the place where the octroi is payable or the official body empowered to collect it.—TRANSLATOR]

[59.] [Two suburban communes that became parts of the city of Paris in 1860.—TRANSLATOR]

[60.] [The French word for "tax" here, and in many other places in the book, is contribution. This word also means in French a voluntary and nongovernmental act.—TRANSLATOR]

[61.] [French gendarmes, a word with no exact English equivalent.—TRANSLATOR]

[62.] [Armand Jean du Plessis, Cardinal de Richelieu (1585-1642), brilliant chief minister of France, 1624-1642.—TRANSLATOR]

[63.] ["Freedom of education" for Bastiat involved lessening or removing the strict controls on the schools imposed by both the Roman Catholic Church and certain government officials.—TRANSLATOR.]

[64.] [The first French railroads were constructed partly by private British capital, and partly by cooperation between the French government and private French capital.—TRANSLATOR.]