Econlib

The Library

Other Sites

 Front Page arrow Titles (by Subject) arrow fourth letter - Selected Essays on Political Economy

Return to Title Page for Selected Essays on Political Economy

Search this Title:

fourth letter - 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).

About Liberty Fund:

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


fourth letter

The physiocrats* used to say: Only land is productive.

Certain political economists have said: Labor alone is productive.

When we see the plowman bending over the furrow and watering it with the sweat of his brow, we can hardly deny his contribution to the work of production. But Nature, too, is tireless. And the sunlight that pierces the cloud, and the cloud that is driven by the wind, and the wind that brings the rain, and the rain that dissolves the substances that fertilize the soil, and the forces that unfold the mystery of life in the young plant—all the known and unknown forces of Nature—prepare the harvest while the plowman seeks in sleep a respite from his labors.

It is, then, impossible not to recognize the fact that Nature and human labor co-operate to accomplish the phenomenon of production. Utility, by which the human race lives, is the result of this co-operation, and this is as true of virtually all industries as it is of agriculture.

But in the exchanges that men carry on with one another there is only one thing that is and can be compared, namely, human labor, by which I mean services rendered and received. These services alone are commensurable with one another; they alone are remunerable; it is in them alone that value resides; and it is altogether accurate to say that man is essentially the owner only of his own work.

As for the portion of utility that is due to the contribution of Nature, although quite real and immensely greater than all that man could accomplish, it is a gratuitous gift; it is transferred from hand to hand without charge; it is without value, properly so called. Who could estimate, measure, or determine the value of the laws of Nature that, from the beginning of the world, have responded whenever man's labor called them into action? To what are they to be compared? How are we to evaluate them? If they had a value, they would figure in our accounts and our inventories; we should charge for their use. And how should we arrive at a value, since they are at the disposal of all, on the same condition, namely, that labor be applied to put them to work?12

Thus, all useful production is the work of Nature, which acts gratis, and of labor, which is remunerated.

But, for the production of a given utility, these two factors, human labor and the forces of Nature, do not stand in fixed and immutable relations to each other. Far from it! Progress consists in constantly increasing Nature's contribution, thereby proportionately decreasing the contribution of human labor. In other words, for a given quantity of utility, the gratuitous co-operation of Nature tends to replace more and more the onerous co-operation of labor. The common share increases at the expense of the remunerable, appropriated share.

If you had to transport a hundredweight load from Paris to Lille without the aid of any of the forces of Nature, that is, on a man's back, it would take you a month's hard work. If, instead of undertaking this task yourself, you entrusted it to another, you would have to repay him with equal labor. Otherwise he would not do it. With the advent of the sleigh, the cart, and the railroad, with each advance, a part of the work is entrusted to the forces of Nature, and there is a corresponding decrease in the labor that needs to be performed or to be remunerated. Now, every payment that is eliminated evidently represents a victory, not for the one who renders the service, but for the one who receives it, that is, for mankind.

Before the invention of printing, a scribe could not copy a Bible in less than a year, and that was the measure of the remuneration that he had a right to demand. Today one can buy a Bible for five francs, which hardly requires a day's work. The gratuitous force of Nature, then, replaces two hundred ninety-nine three-hundredths of the remunerable labor of man. One part represents the human service and remains private property; two hundred and ninety-nine parts represent the contribution of Nature, are no longer paid for, and consequently fall into the domain of what is free of charge and common to all.

There is not a tool, an implement, or a machine that has not resulted in a decrease in the contribution of human labor, that is, either in the value of the product or in the factor that constitutes the basis of property.

This observation, which, I agree, is quite imperfectly set forth here, ought, it seems to me, to rally on the common ground of property and liberty the schools of thought that today share in holding such an unfortunate sway over public opinion.

Each of these schools of thought may be summed up in an axiom.

Economist axiom: Let things alone. (Laissez faire, laissez passer.)

Egalitarian axiom: Reciprocity of services.

Saint-Simonian axiom: To each according to his capacity, to each capacity according to its production.

Socialist axiom: Equitable distribution among capital, talent, and labor.

Communist axiom: Community of goods.

I am going to indicate (for I cannot do anything more than that here) how the doctrine set forth in the preceding lines satisfies the demands of all these programs.

Economists

It is hardly necessary to prove that the economists should accept a doctrine that is evidently derived from the teachings of Smith and of Say,* and represents nothing but a consequence of the general laws that they discovered. Let things alone—that is what the word freedom means essentially, and I question whether it is possible even to conceive of the notion of property without freedom. Am I the owner of my productive capacities, of my labor, and of the products of my labor, if I cannot use them to render services voluntarily accepted? Should I not be free either to work by myself, which involves the necessity of exchange, or to join forces with my fellow men, which is association, or another form of exchange?

And if freedom is restricted, is not an injury done to property itself? Besides, how will reciprocal services receive their just relative value if they are not exchanged freely, if the law forbids human labor to perform the services that are the most highly remunerated? Property, justice, equality, and the balancing of services evidently can result only from freedom. Moreover, it is freedom that renders the contribution of the forces of Nature free of charge and common to all; for as long as legal privilege confers upon me the exclusive fight to the exploitation of any of the forces of Nature, I charge not only for my labor, but for the use of that force. I know how fashionable it is nowadays to sneer at freedom. The age seems to have taken seriously the ironic refrain of our great song-writer:*

  • My heart in great hate
  • Holds all liberty.
  • Fie on liberty!
  • Down with liberty!

For my part, even as I have always loved it instinctively, so shall I never cease to defend it rationally.

Egalitarians

The reciprocity of services to which they aspire is exactly what results from the system of private ownership.

Apparently, man is the owner of the whole of what he possesses, of all the utility that it includes. In reality, he is the owner only of its value, of that portion of utility contributed by labor; since, in selling it, he can be remunerated only for the service that he renders. The representative of the egalitarians recently condemned property, restricting the word to what he calls usury, the use of soil, of money, of houses, of credit, etc. But this kind of usury is and cannot but be derived from labor. To receive a service implies the obligation to render it. This is what the reciprocity of services consists in. When I lend a thing which I have produced with the sweat of my brow, and which I may turn to my own account, I render a service to the borrower, who also owes me a service in return. He would not render me any if he limited himself to restoring the thing at the end of the year. During that period he would have profited from my labor to my detriment. If I were remunerated for something other than for my labor, the objection of the egalitarians would be plausible. But it is nothing of the sort. Once, then, they are assured of the truth of the theory set forth in these articles, if they are consistent, they will join with us in our effort to safeguard the right to property and to demand what is needed to complete it, or rather what constitutes it, namely, liberty.

Saint-Simonians

To each according to his capacity, to each capacity according to its production.

This too is accomplished by the system of private ownership.

We render each other reciprocal services; but these services are not proportionate to the duration or the intensity of our labor. They are not measured by a dynamometer or by a chronometer. Whether I have worked an hour or a day matters little to the one to whom I offer my service. What he is interested in is, not the pains I take, but the pains I spare him.13 In order to save labor and time, I try to make use of one of the forces of Nature. In so far as no one except me knows how to turn this force to account, I render to others more services than they can render to themselves in the same time. I am well remunerated, and I enrich myself without harming anyone. The force of Nature in this case redounds to my profit alone; my capacity is recompensed: To each according to his capacity. But very soon my secret is divulged. My technique is imitated; competition forces me to reduce my demands. The price of the product falls until my labor receives no more than the normal remuneration of all labor of the same kind. The force of Nature is not lost thereby; it escapes me, but it is acquired by all mankind, which henceforth procures an equal satisfaction with less labor. Whoever exploits that force for his own use takes less trouble than formerly and, hence, whoever exploits it for others is due a lesser remuneration. If he wants to increase his wealth, he is left no other recourse than to increase his labor. To each capacity according to its production. Essentially, it is a matter of working better or of working more, and this is precisely what the Saint-Simonian axiom means.

Socialists

Equitable distribution among talent, capital, and labor.

Equity in distribution results from the law: Services are exchanged for services, provided that these exchanges are free, that is, provided that the right to property is recognized and respected.

It is quite clear, in the first place, that the one who has more talent renders more services for equal pains; from which it follows that he is voluntarily granted a greater remuneration.

As for capital and labor, that is a subject on which I regret not being able to expatiate here, for there is none which has been presented to the public under a falser and more dangerous light.

Capital is often represented as a devouring monster, as the enemy of labor. Thus, a sort of irrational antagonism has been set up between two powers, which, at bottom, have the same origin and the same nature, which co-operate with and aid each other, and which cannot do without each other. When I see labor angry at capital, I seem to see hunger rejecting food.

I define capital thus: raw materials, implements, and provisions, of which the use is free of charge, let us not forget, in so far as Nature has contributed to produce them, and of which only the value, the product of labor, is charged for.

To accomplish anything useful, raw materials are necessary; however simple it may be, it requires implements; however short a time it takes, provisions are needed. For example: for a railroad to be built, society must set aside enough to keep thousands of men alive for several years.

Raw materials, implements, and provisions are themselves the products of previous labor, which has not yet been remunerated. Hence, when previous labor and present labor are combined for a single end, in a common enterprise, they remunerate each other; there is an exchange of labor, an exchange of services, on mutually agreed-upon terms. Which of the two parties will obtain the better terms? The one that has less need of the other. We are here confronted with the inexorable law of supply and demand; to complain of it is childish and self-contradictory. To say that labor should be well remunerated when the workers are numerous and capital scarce is tantamount to saying that the scarcer the provisions, the better fed everyone should be.

For labor to be in demand and well paid, there must, then, be plenty of raw materials, implements, and provisions—in other words, capital—in the country.

It follows from this that it is in the basic interest of the workers that capital be built up rapidly; that, as a result of their expeditious accumulation, raw materials, implements, and provisions be in active competition with one another. It is only this that can improve the lot of the workers. And what is the essential condition for the formation of capital? It is that everyone be sure of really being the owner, in the full sense of the word, of his labor and his savings. Property, security, liberty, order, peace, economy—these are what interest everyone, but especially and in the highest degree, the proletarians.

Communists

In all ages, we find men of upright and benevolent character—men like Thomas More,* Harrington,† and Fénelon—who, shocked by the spectacle of human suffering and the inequalities of wealth, have sought refuge in a communist utopia.

However strange this may appear, I assert that the system of private ownership tends, right under our eyes, to make such a utopia more and more nearly a reality. It is for this reason that I said at the beginning that property is essentially democratic.

What makes it possible for mankind to live and develop? Everything that serves it, everything that is useful. Among useful things there are some that human labor has nothing to do in producing—air, water, sunlight; these are completely free of charge and common to all. There are others that become useful only by virtue of the co-operation of labor and Nature. Their utility, therefore, is analyzable into two parts. One part is due to labor, and it alone is remunerable, has value, and constitutes property. The other part is put there by natural resources, and this remains free of charge and common to all.

Now, of these two forces which contribute to produce utility, the second, that which is free of charge and common to all, constantly replaces the first, which is onerous and hence remunerable. This is the law of progress. There is not a man on earth who does not seek help from the forces of Nature; and when he has found it, he immediately makes it possible for all mankind to enjoy it by lowering proportionally the price of the product.

Thus, in each given product, the part of utility that is free of charge gradually replaces the other part that remains onerous.

The share common and available to all, then, tends to exceed in indefinite proportions the appropriated share, and one may say that for mankind the domain of what is common and available to all is constantly increasing.

Furthermore, it is clear that, where there is liberty, the part of utility that remains remunerable or appropriable tends to be distributed in a manner, if not strictly equal, at least proportional to the services rendered, since these services themselves are the measure of the remuneration.

Thus, we see with what irresistible power the right to private property tends to produce equality among men. First, it sets up a common fund, which each advance constantly increases, and in regard to which equality is perfect; for all men are equal in respect to the value that has been abolished, a utility that has ceased to be remunerable. All men are equal in respect to that part of the price of books that printing has eliminated.

Consequently, as regards the part of utility that corresponds to human labor, to pains taken or skill required, competition tends to establish a balance among remunerations; and the only inequality remaining is that which is justified by the inequality of efforts, of pains, of labor, of skill—in a word, of services rendered; and, aside from the fact that such an inequality will be eternally just, who does not understand that without it all effort would at once come to a halt?

I can imagine what the objection will be. “There,” it will be said, “is the optimism of the political economists for you! They are so wrapped up in their theories that they never deign to look the facts in the face. Where, in fact, are these egalitarian tendencies? Does not the whole world present the lamentable spectacle of opulence side by side with poverty, of luxury jeering at destitution, of idleness and toil, of satiety and starvation?”

I do not deny this inequality, this distress, this suffering. And who could deny them? But I say: Far from being endangered by the right to private property, they are to be imputed to its opposite, the principle of plunder.

This is what it remains for me to demonstrate.

[*][Members of an eighteenth-century philosophic and economic school founded by François Quesnay (1694–1774). Since they believed in a natural law (the jus naturae) governing all human relations as well as the physical universe, they were opposed to any man-made interference, particularly in agriculture and industry. The phrases, laisser faire, laisser passer, were coined by them to epitomize their doctrine. They also regarded all wealth as derived from the powers of Nature and therefore declared the latter to be the only legitimate sources of public finance. Because of the heavy, labored style of their writings, they were held up to ridicule by Voltaire and others, but their doctrines were accepted in part by Adam Smith and J. B. Say.—Translator.]

[*][Jean-Baptiste Say (1767–1832), French professor of political economy, champion of free trade. His views influenced Bastiat greatly.—Translator.]

[*][Pierre Jean de Béranger (1780–1857). The song in question, named simply La Liberté, was written in 1822 in protest against the suppression of free speech under the Restoration. The original French words cited by Bastiat are:

  • Mon coeur en belle haine
  • A pris la liberté.
  • Fi de la liberté!
  • À bas la liberté!—Translator.]

[*][Sir Thomas More (1478–1535), whose Utopia, published in Latin in 1516 and later in English, satirized the government and society of his day by comparing them with a fictitious island commonwealth, modeled on Platonic principles, in which goods would be owned in common.—Translator.]

[†][James Harrington (1611–1677), English political philosopher, whose work on the ideal state, entitled Commonwealth of Oceana, emphasizing a written constitution, indirect election of the president, the secret ballot, and rotation in office, is believed to have influenced political thought in the United States and other democracies.—Translator.]

[12.][On the objection based on the so-called monopoly of natural resources, see, in Vol. V (of the French edition), the twenty-fourth letter on “Interest-free Credit,” and, in Economic Sophisms, First Series, the two last pages of chap. 14.—Editor.]

[13.][On spared effort, considered as the most important element of value, see chap. 5 of Economic Harmonies.—Editor.]