Frédéric Bastiat, Chapter IV “Exchange” from Economic Harmonies
[Date: August 20, 2017.]
Frédéric Bastiat (1801-1850)
Title Page of the Economic Harmonies (1851)
This is a near final draft of Liberty Fund’s new translation of Frédéric Bastiat’s treatise on economics, Economic Harmonies (1850, 1851). There are still some footnotes to complete and there are a few words the final translation of which have not been decided upon.
For more information about Frédéric Bastiat see the following:
- Summary of the Bastiat Project
- Works in the OLL by Frédéric Bastiat (1801-1850)
- A Reader’s Guide to the Works of Frédéric Bastiat (1801-1850)
- A Chronological List of Bastiat’s Writings
The Collected Works of Frédéric Bastiat. In Six Volumes (Indianapolis:
Liberty Fund, 2011 -2015), General Editor Jacques de Guenin. Academic Editor
Dr. David M. Hart. Books.
- Vol. 1: The Man and the Statesman. The Correspondence and Articles on Politics (March 2011)
- Vol. 2: “The Law,” “The State,” and Other Political Writings, 1843-1850 (June 2012)
- Vol. 3: Economic Sophisms and “What is Seen and What is Not Seen” (in production)
- Vol. 4: Miscellaneous Works on Economics: From Jacques-Bonhomme to Le Journal des Économistes (forthcoming)
- Vol. 5: Economic Harmonies (forthcoming)
- Vol. 6: The Struggle Against Protectionism: The English and French Free-Trade Movements (forthcoming)
Exchange, or trade,1 is political economy; it is society in its entirety, for it is impossible to imagine society without exchange or exchange without society. For this reason I do not pretend to cover such a huge subject comprehensively in this chapter. This entire book will will offer no more than an outline of it.
If men, like snails, lived in total isolation from one another, if they did not exchange their work and ideas, if there were no transactions between them, there might be crowds, small groups, and individuals living in proximity, but there would be no society.
What am I saying? There would not even be individuals. For man, isolation is death. Now, if he cannot live outside society, the strict conclusion is that his natural state is the social state.
All learning leads to this truth, so badly understood in the 18th century, which based politics and the moral code on the contrary assertion. At that time, scholars were not content to contrast the state of nature with the social state; they ascribed to the state of nature a clear superiority to the social state. “Happy were those men”, Montaigne had said, “who lived with no links, no laws, no language and no religion!”2 We know that Rousseau, who exercised and still exercises such great influence on opinions and on facts, advanced a theory entirely based on the hypothesis that there was a time when men, to their great misfortune, agreed to abandon the innocent state of nature for the stormy state of society.3
It is not germane to this chapter to bring together all the refutations that can be made against this fundamental error, the most disastrous that has ever infected political sciences, for if society is a matter of invention and convention, it follows that each person can invent a new form of society, and indeed since Rousseau this has been the turn taken by men’s minds. I believe that it would be easy for me to show that isolation excludes language, just as the absence of language excludes thought, and of course man without thought, far from being natural man, is not a man at all.
However, a peremptory refutation of the idea on which Rousseau’s doctrine is based will, without our seeking it, arise directly from a few considerations on exchange.
Need, effort, satisfaction, these are what constitute man from the point of view of economics.4
We have seen that the first and third words cannot be precisely pinned down, for they take place in our sensations and feelings, indeed sensations and feelings are what they are, namely the most personal thing in the world, both with respect to the feeling that precedes and produces effort and to the feeling that follows and rewards it.
It is therefore effort that is exchanged, and this has to be so, since exchange implies activity (or action)5 and effort alone reveals our acting nature. We cannot suffer or enjoy for one another even though we are sensitive to the pleasures and pains of others. However, we can help each other, work for each other, render each other reciprocal services,6 place our capacities or what results from them at the service of others subject to payment in return. That is what society is. The causes, effects and laws governing these exchanges make up political and social economy.
Not only can we do this, but also of necessity we do act in this way. What I state is this: our nature is such that we are obliged to work for one another under pain of death and (even) immediate death. If this is so, society is our “state of nature” since it is the only one in which we are given to live.
Indeed, a comment has to be made about the equilibrium (which exists) between our needs and our capacities, a comment that has always made me admire the providential plan that rules our destiny.
It follows from this that man cannot live in isolation, whereas when man lives in society, the most pressing needs give way to desires of a higher order and this continues progressively in a process of advancement whose limits nobody can define.
This is not mere oratory, but a statement that can be rigorously demonstrated through a process of reasoning, and by analogy if not by experience. And why can it not be demonstrated by experience or by direct observation? Precisely because it is true and precisely because, since man cannot live in isolation, it becomes impossible to show the effects of absolute solitude on a living human being. The senses cannot perceive a negative statement. You may be able to prove to my mind that a triangle never has four sides, but you cannot support such a possibility by showing me physically a triangle that is a tetragon. If you did this, your assertion would be destroyed by the very thing you are showing me. In the same way, asking me for experimental proof or requiring me to study the consequences of isolation on a living human being would be to impose a contradiction on me since, isolation and human life being mutually exclusive, we have never seen nor will we ever see men with no relationships.
If, and I do not know this, there are any animals destined by their nature to spend the entire span of their life in absolute isolation, it is very clear that nature must have established a precise equivalence between their needs and their capacities. We might even suppose their capacities greater, in which case, these animals would be capable of advancement and progress. But perfect equilibrium turns them into unchanging beings and the thought that they might have a greater number of needs than their faculties could provide, is inconceivable. The creatures would need, right from birth, from their first appearance as living creatures, to have capacities fixed relative to the needs they have to satisfy, or at least their capacities and needs would have to develop in a parallel proportion. Without this these species would die at birth, and would consequently not be available to be observed.
Of all the species of living creatures that surround us, it is undeniable that none is subject to as many needs as man. In none of them is childhood so feeble, long, or dependent, maturity so burdened with responsibilities, or old age so weak and full of suffering. And as if man did not have enough needs, he still has tastes whose satisfaction demands as much from his capacities as his needs themselves do. Scarcely has he found a way of assuaging his hunger than he wants to please his palate, scarcely has he clothed himself than he wants to adorn himself too, and scarcely has he found himself a shelter than he seeks to embellish his home. His mind is no less restless than his body is needy. He wants to go deeper into the secrets of nature, tame animals, conquer the elements, penetrate into the bowels of the earth, cross vast seas, glide above the winds, and overcome time and space. He wants to grasp the driving forces, the springs,9 and the laws that govern his heart and will, to control his passions, conquer immortality, and merge his being with that of his Creator, to subjugate everything – nature, his fellow-men, and himself – to his control: in a word, his desires expand endlessly toward infinity.
Thus, in no other species are faculties subject to development as great as in man. He alone is able to compare and judge, he alone reasons and speaks, he alone plans for the future, he alone sacrifices the present to the future, he alone transmits the achievements, thoughts, and treasures of his experience from generation to generation; in a word, he alone is capable of improving himself step by step like countless links in a chain which appears to reach even beyond this world.
Let us insert an economic observation at this point. However extended the field of our capacities, they can never raise us to the ability to create. It is not within man’s power in fact to increase or decrease the number of molecules that exist. His action is limited to subjecting the matter around him to modifications and combinations that make them suitable for his use (J. B. Say).10
Modifying matter in order to increase its usefulness to us is to produce, or rather one way of producing. I conclude from this that value, as we shall see later,11 can never lie in these things themselves but rather in the effort devoted to modifying them, which, when exchange takes place, is compared with other similar efforts. For this reason, value is just an appraisal of the (worth of the) services being exchanged, whether matter enters into it or not. It is totally irrelevant, as far as value is concerned, whether I am providing my fellow man with a direct service, for example by operating on him surgically, or a service that is indirect, by preparing some medicine for him. In this latter case, utility lies in the substance while value lies in the service (provided), in the intellectual and physical effort expended by one man for the benefit of another. It is by pure metonymy that value is attributed to the matter itself and on this occasion, as on many others, metaphor has caused science to be lead astray.
Let us return to the nature of man. If you stopped at the notions above, he would differ from other animals only by the greater extent of his needs and the superiority of his capacities.12 All creatures in fact are subject to needs and provided with capacities. Birds undertake long journeys to seek out temperatures that suit them, beavers cross rivers on the bridge they build, sparrow hawks pursue their prey openly, cats lie in wait patiently for theirs, spiders make traps for what they eat, and all work in order to live and develop.
However, while nature has set a precise ratio between animals’ needs and their capacities, it has treated man with more grandeur and munificence in order to oblige him to be sociable and has decreed that in isolation his needs would surpass his capacities, while on the contrary, when living in society his capacities surpass his needs. This opens out a limitless field to the enjoyment of more noble things, and we have to acknowledge that, just as in his relationships with his Creator, man is raised above animals by religious sentiment, by his relationships of justice with his fellow man, by his relationship with himself governed by moral principles, and even through his means of living and developing. So he distinguishes himself from animals through a remarkable phenomenon. This phenomenon is Exchange.
Will I attempt to paint a state of poverty, penury, and ignorance in which, without the ability to exchange, the human race would have stagnated forever, if it had not even disappeared from the face of the earth?
In a novel with a matchless capacity for charming children from one generation to the next, one of the most popular sages has shown man overcoming the difficulties of absolute solitude by his sheer energy, industriousness, and intelligence. Wishing to cast light on all the resources possessed by this noble creature, he portrayed him, so to speak, as a being accidentally cut off from civilization. A part of Daniel Defoe’s plan was thus to cast Robinson Crusoe on the Island of Despair alone, naked, and deprived of everything that adds to human powers: collaborative efforts, the division of labor, exchange, and (even) society itself.13
However, and while the obstacles are no more than a diversion for the imagination, Daniel Defoe would have removed from his novel every vestige of verisimilitude if he had been too faithful to the notion that he wanted to develop and had not made obligatory concessions to the social state by accepting that his hero had saved from the shipwreck a few essential objects, provisions, gunpowder, a gun, an axe, a knife, ropes, planks, iron, etc., a clear proof that society is the necessary milieu for man, since even a novelist is unable to have his character live outside it.
And note that Robinson Crusoe carried with him into solitude another social treasure a thousand times more precious and that the waves were unable to swallow up, I mean his ideas, his memories, his experience, even his language, without which he would not have been able to talk to himself, that is to say, think.
We have the sorry and unreasonable habit of attributing to society the sufferings we witness. We are right to do this up to a certain point if we mean to compare society with itself, taking two different stages of its progress and advancement, but we are wrong if we compare the social state, even if it is imperfect, with a state of isolation. In order to be able to argue that society worsens the situation, I will not say of man in general but of a few men and the most destitute of them, you would have to start by proving that the most deprived of our brethren would have, in society, to bear a heavier burden of deprivation and suffering than would have been his lot in solitude. Well, take a look at the life of the humblest of manual workers. Review in the greatest detail the things he consumes daily. He is covered with a few rough garments, he eats a bit of black bread, he sleeps under a roof and on planks at least. Now ask yourself if this isolated man, deprived of the resources of exchange, would have the slightest opportunity of obtaining these rough garments, this black bread, this hard bed, and this humble abode for himself. The most passionate supporter of the state of nature, Rousseau himself, admitted that this was radically impossible. People did without everything, he says, they went about naked and slept in the open air. Thus in order to exalt the state of nature, Rousseau was led to have happiness consist in deprivation. But once again I state that this negative form of happiness is an illusion, and that man in isolation would be certain to die in a very short time. Perhaps Rousseau would have gone so far as to say that in this lies perfection. He would have been consistent in this, for if happiness lies in deprivation, perfection is in oblivion or death.
I hope that the reader will not conclude from this that we are insensitive to the social sufferings of our brethren. The fact that these sufferings are less in an imperfect society than in isolation does not mean that we do not hope with all our hearts for the progress that will constantly decrease them. But while isolation is worse than the worst that exists in the social state, I was right to say that it puts our needs, even if we limit these to the most pressing ones, totally beyond our capacities.
How does exchange, by overturning this order to our advantage, make our capacities greater than our needs?
First of all, this fact is proved by civilization itself. If our needs exceeded our capacities we would be irrevocably backward, and if our needs and capacities were in equilibrium we would be irrevocably static. We are making progress, therefore each stage of social life compared with one that went before, for a given number of satisfactions, liberates some part of our capacities.
Let us try to give an explanation for this marvelous phenomenon.
The one we owe to Condillac14 appears totally inadequate and empirical to me, or rather it explains nothing. “The very fact that an exchange takes place,” he says, “means that there has of necessity to be a profit for the two contracting parties, without which it would not happen. Therefore, every exchange comprises two gains for the human race.”15
Quia est in eo
Quae facit dormire18.
An exchange comprises two gains, you say. The question is to ascertain why and how. – This results from the very fact that it takes place. – But why has it taken place? What motivated the men concerned to make it? Is it that exchange in itself has a mysterious and necessarily beneficial virtue that defies any explanation?
Others derive the advantage from the giving of something of which you have too much in order to receive something you lack. Exchange, or trade, they say, is the barter of something superfluous for something necessary. Apart from the fact that this is contrary to the facts that we observe – for who would dare to say that a farmer, by divesting himself of the wheat he has grown and will never eat, is handing over something superfluous?19 – I can readily see in this axiom how two men would come to an agreement by chance, but I cannot see how this explains progress.
Observation will provide us with a more satisfactory explanation of the power of exchange.
Exchange is manifested in two ways: the joint use of our strength and the division of labor.
It is very clear that in a great many cases the combined strength of several men are completely superior to the sum of their strength in isolation. Take moving a heavy burden. Where a thousand men in succession will fail, it is quite possible that four men will succeed by joining forces. Try to imagine the things that would never have been accomplished if this co-operation had not taken place!
What is more, this combination of muscular strength to achieve a common goal is small change; nature has endowed us with a wide variety of physical, moral, and intellectual capacities. There are countless ways in which cooperation in the use of these faculties may be used. Does a useful task need to be accomplished, such as the building of a road or the defense of the country? One man puts his strength at the service of the community, another his agility, a third his daring, a fourth his experience, foresightedness, imagination, and even his reputation. It is easy to understand that these same men acting in isolation would not be able to achieve nor even conceive of the same result.
Well, the joining of men’s forces involves (an) exchange. In order for men to agree to cooperate, they have to have in mind a share of the satisfaction to be obtained. Each of them uses his efforts for the benefit of someone else and benefits from the efforts of someone else in the proportions agreed, and this constitutes exchange.
We can see here how exchange in this form increases our satisfactions. Efforts that are equal in intensity result, by the sole fact of their combination, in greater success. In this there is no trace of the alleged barter of something superfluous for something necessary any more than the double and observed profit claimed by Condillac.
We will make the same comment about the division of labor. After all, if you look closely, sharing occupations around is for men just another way, one that is more permanent, of combining their various strengths, cooperating, and associating with each other, and it is quite right to say, as will be shown later, that the current organization of society, provided that it acknowledges free exchange,20 is the finest and most extensive of all associations, one marvelous in a different way from those dreamt of by Socialists, since it operates through a wonderful mechanism that does not conflict with individual independence. Each person enters and leaves it at any time, as it suits him. He contributes what he wishes; and withdraws from it comparatively higher and always progressively greater satisfaction, such satisfaction which is determined, in accordance with the laws of justice, by the very nature of things,21 and not by the arbitrary will of a leader. But this point of view anticipates things here. All I have to do for the moment is to explain how the division of labor increases our powers.
Without spending a great deal of time on the subject, given that the number of those who do not raise some objections is small, I think it is quite germane for me to say something about it. Perhaps it has been to some extent given insufficient emphasis. To prove the power of the division of labor, people concentrated on pointing out the wonders it achieves in certain factories, those manufacturing pins, for example.22 23 The question may be raised to a more general and philosophical point of view. On top of this, force of habit has this strange ability to make us lose sight of, to fail to notice, the phenomena all around us. There is no statement more profoundly true than Rousseau’s: “A great deal of philosophy is needed to observe what we see every day.”24 It is therefore not superfluous to remind men of the things that, without noticing it, they owe to exchange.25
How has the ability to exchange things raised the human race to the level at which we see it today? Through its influence on labor, on the contribution made by natural resources, on the capacities of man, and on capital.
Adam Smith demonstrated this influence on labor extremely well.
Trans. from Fr: “The increase in the quantity of labor that the same number of men are able to do following a division of that labor is due to three circumstances”, said this famous economist, “First, to the degree of skill that each worker now attains; secondly to the saving of time naturally lost by men moving from one type of occupation to another; thirdly to the fact that each person has more opportunity of finding an easy and fast way of achieving a goal when this goal is the center of his attention, than when that attention is spread over an infinite variety of things.”
Orignal: “This great increase of the quantity of work, which, in consequence of the division of labour, the same number of people are capable of performing, is owing to three different circumstances: first, to the increase of dexterity in every particular workman; secondly, to the saving of the time which is commonly lost in passing from one species of work to another; and last, to the invention of a great number of machines which facilitate and abridge labour, and enable one man to do the work of many.”26
Those who, like Adam Smith, see in labor the sole source of wealth, limit themselves to seeking how it advances by being divided. However, in the preceding chapter we have seen that it is not the sole factor (contributing to) our satisfactions.27 The forces of nature contribute. This is undeniable.
Thus, in farming, the action of the sun and rain, the life (giving properties) in the soil, and the gases in the atmosphere are certainly factors that contribute to the work done by human beings in growing crops.
Manufacturing owes a similar debt to the chemical qualities of certain substances, to water-power, to the expansion of steam, to gravity, or electricity.
Exchange has been able to turn to man’s benefit the strength and instincts of certain species of animals, the force of the wind that swells the sails of its ships, the laws of magnetism that, by acting on the compass, direct their passage across the huge expanse of the seas.
There are two truths beyond contradiction. The first is that man is provided with more of everything when he makes the best use of the forces of nature.
It is palpably clear in effect that we obtain more wheat for the same effort from good, well fertilized earth than from arid sand or sterile rocks.
The second is that natural resources are distributed unequally around the world.
Who would dare to claim that all types of earth are equally suited to growing the same types of crops and all regions suited to the same type of manufacture?
Well, if it is true that the forces of nature differ at various places in the world, and if on the other hand men are richer where they are able to obtain the most assistance (from nature), it follows that the ability to exchange increases immeasurably the useful contribution made by these forces.
Here we are faced with gratuitous or free utility and onerous or costly utility,28 where the former takes the place of the latter, as as result of exchange. Indeed, it is not clear that if men were deprived of the ability to exchange and were reduced to producing ice at the equator and sugar at the poles, they would have great trouble in producing what the heat and cold are now doing for them free of charge, and that from their point of view a huge proportion of the forces of nature would remain inert? Thanks to exchange, these forces are used wherever they are found. Land suitable for wheat is sown with wheat, land suitable for growing grapes is planted with vines. There are fishermen on the coasts and lumberjacks in the mountains. Here, water and there, wind are directed onto wheels that take the place of ten men. Nature becomes a slave that does not need to be fed or clothed, whom we do not pay nor have paid for its services, that costs nothing either to our wallets or our consciences.29 The same sum of human effort, that is to say the same services or the same value, creates an ever greater total sum of utility. For each given result, just a portion of human activity is taken up; the rest is made available through the intervention of the forces of nature, and takes on new obstacles, satisfies new desires, and creates new forms of utility.
The effects of exchange on our intellectual capacities are such that the most vivid imagination cannot calculate their range.
“The things we know”, says Mr. de Tracy,30 “constitute our most precious acquisitions, since they are the ones that direct the way our powers are used and make them most effective the more healthy and generous they are. Now, no man is able to see everything and it is much easier to learn than to invent. But when several people communicate with each other, what one man has observed is rapidly known by all the others, and it is enough for one who is extremely ingenious to exist among them for invaluable discoveries to become instantly the property of all. Enlightenment ought thus to increase much faster than in a state of isolation, apart from the fact that it can be preserved and consequently be added to in each succeeding generation.”31
If nature has varied the resources surrounding mankind and that it places at our disposal, it has not been any more uniform when allocating human capacities. We are not all endowed to the same extent with vigor, courage, intelligence, patience, artistic ability, literary ability, or industrial skill. Without our ability to exchange, far from acting to the advantage of our well-being, this diversity would add to our poverty, with each person less aware of the benefits of the capacities he had than of the lack of those he did not have. Thanks to exchange, a strong person can do without genius up to a certain point, and an intelligent being without physical strength, for each person would receive the benefit of the distinctive qualities of his fellow-men through the admirable community that it establishes between men.
In order to satisfy his needs and tastes, it is not enough in most cases for someone to work or exercise his capacities on or through the resources of nature. He still needs tools, instruments, machines, and provisions, in a word, capital. Let us imagine a small population made up of ten families, each of which, working exclusively for itself, has to carry out ten distinct activities. Each head of the family would need ten sets of equipment. The population would own ten ploughs, ten yoke of oxen, ten forges, ten carpentry and joinery workshops, ten weaving looms, etc. When (we have) exchange, one single plough, one single yoke of oxen, one single forge and one single weaving loom would be enough. No imagination could calculate the saving of capital that results (from this).
The reader can now see what constitutes the true power of exchange. It does not imply, as Condillac says, (that there are) two gains, because each of the contracting parties places a higher value on what it receives than what it gives.32 Nor is it that each of them is handing over something superfluous in order to acquire something he needs. It is quite simply that when one man says to another: “Just do this and I will just do that and we will share,” better use is being made of labor, men’s capacities, natural resources, and capital, and as a result, there is more to share. This is even more true if three, ten, one hundred, one thousand, or several million men join the association.
The two propositions I have put forward are thus strictly true and these are:
In isolation, our needs are greater than our capacities.
In the social state, our capacities are greater than our needs.
The first is true, given that the entire area of France would be unable to provide food for one man in a state of total isolation.
The second is true, as revealed in the fact that the population in this same area is increasing in number and well-being.
Progress in Exchange.
The primitive form of exchange is barter. Two people, each of whom has something he desires and who possesses the object able to satisfy the desire of the other, exchange these objects with each other, or else they agree to work separately at something and share the total product in agreed proportions. This is barter, which, as the socialists might say, is exchange, buying and selling, and (therefore) an embryonic form of commerce. We note here (the) two desires (which are) the driving forces, the two efforts (which are the) means, and the two satisfactions (which are the) consummation of the entire process.33 Nothing in essence makes this process any different when carried out in isolation, except that while the desires and satisfactions have remained, by their natures, incapable of being transferred, efforts, and only (the) efforts, have been exchanged; in other words, two people have worked for each other and rendered a mutual service to each other.34
Thus, this is the point at which Political Economy truly starts, for it is at this point that we can see the first appearance of value. Barter is carried out only when an agreement has been reached or a negotiation has taken place; each of the contracting parties makes up his mind in the light of his self interest and each one of them makes a calculation that goes as follows: “I will engage in barter if the barter achieves the satisfaction of my desire for less effort.” It is certainly a marvelous thing that less effort is able to meet desires and satisfactions that remain at the same level, and this is explained by the considerations that I set out in the first paragraph of this chapter. When two products or services are bartered, it can be said that they are of equal value. Later we will have to go into the notion of value more deeply. For the moment this more vague definition will suffice.35
A circular or round-about form of barter can be envisaged; an operation that includes three contracting parties. Paul provides a service to Pierre, who provides an equivalent service to Jacques who, in turn, provides an equivalent service to Paul, at the end of which everything is balanced. I have no need to say that this rotation is carried out only because it suits all of the parties, without changing either the nature or the results of the barter.
The essence of barter would be found in all its purity even if the number of contracting parties were greater. In my commune (of Mugron),36 the wine producer pays for the services of the blacksmith, barber, tailor, beadle, parish priest, and grocer with wine. The blacksmith, barber, and tailor also deliver to the grocer the wine they have received from the wine producer in exchange for goods consumed right through the year.
It cannot be repeated too often that this roundabout form of barter does not change the basic notions set out in the preceding chapters in the slightest. When the process is completed, each person who cooperated in it showed these three things: (a) desire (for something),37 (the understanding that they would have to expend some) effort, and (the expectation that they would get some) satisfaction.38 The only things which have been added are the exchange of effort, the transfer of services, and the division of labour, with all the benefits that result from this. Each person who took part contributed to (the creation of these) benefits, since they could have continued working in isolation, which is always the option of last resort, but chose not to in view of the greater benefits gained (by cooperating with each other).
It is easy to understand that roundabout barter and trading in kind, cannot be extended very far and I have no need to stress the obstacles to it. For example, how would someone who wished to give up his house in exchange for the products he will need to consume throughout the year go about it? In any case, barter cannot go outside the narrow circle of people who know one another. The human race would rapidly have reached the limits of the division of labor and progress if it had not found a way of making exchange easier.
This is why, from the very beginnings of society, we find men bringing intermediary products into their transactions: wheat, wine, animals, and nearly always some form of (precious) metal. These goods fulfill this function more or less satisfactorily but none of them is rejected in essence, provided that effort is represented in this context by value, since it is value that is needed to carry out the transaction.
Along with recourse to this intermediary form of goods, two economic phenomena known as sale and purchase make their appearance. It is clear that the notion of sale and purchase is not subsumed in simple barter or even in round-about barter. When one man gives another something to drink in order to receive something to eat from him, there is just one action that cannot be broken down. Well, what should be clearly noted at the outset of our study of political economy is that an exchange made using an intermediary does not lose any characteristic of the nature, essence, or quality of barter; it is just a compound or indirect form of barter.39 According to the extremely judicious and profound observation made by J. B. Say, it is a barter with two factors,40 one known as sale and the other purchase, factors whose combination is essential if a complete (act of) bartering is to be accomplished.
Indeed, the appearance in the world of a convenient method of bartering changes neither the nature of men nor that of objects. For everyone, it is always need that determines effort, and satisfaction that rewards it. Exchange is complete only when one man, who has made an effort for the benefit of another, has received an equivalent service from him, that is to say, satisfaction. To do this, he sells his service in return for the intermediate form of goods, and then, with this intermediate product, he purchases equivalent services, at which point the two factors reconstitute a simple form of barter for him.
Let us take a doctor, for example. For several years, he applies his time and capacities to the study of diseases and remedies. He has visited patients, given advice, in a word, he has provided services. Instead of receiving direct services in return from his patients, which would constitute a simple form of barter, he has received an intermediate form of goods, metals with which he has procured the satisfactions that in the end constituted the object he had in view. It is not his patients that have supplied him with bread, wine, or furniture, but they have given him the value of these things. They were able to give him écus41 only because they themselves had provided services. There is thus a balance of services, from their point of view and also a balance from the point of view of the doctor, and if it were possible to follow mentally this circulation to its end, we would see that exchange through the intervention of money is reduced to a host of simple barters.
Under (a system of) simple barter, value lies in appraisal of the worth of the two services (which are) exchanged and compared directly with each other. Under compound (or indirect) exchange, the worth of the two services are still compared with each other, but via this third medium, this intermediate form of goods (which) is known as money. We will see elsewhere what difficulties and errors arise from this (added) complication.42 It is sufficient to note here that the presence of this intermediate good does not change the notion of value in any way.
The reader, once he accepts that exchange is simultaneously the cause and effect of the division of labor, once he accepts that the latter increases the number of satisfactions in proportion to efforts, for the reasons set out at the start of this chapter, will easily understand the services rendered to the human race by money, simply through its facilitating exchange. Thanks to money, exchange has been able to develop indefinitely. Each person throws his services into the ring of society without knowing for whom they will provide the satisfaction attached to them. In the same way, he draws from society, not direct services, but écus, with which he will finally purchase services where, when, and how it suits him. So that the final transactions are carried out through time and space between people who do not know each other and without anyone knowing, at least in the majority of cases, by whose effort his needs will be satisfied and for whose desires his own efforts will provide satisfaction. Exchange based on money is made up of countless barters whose contracting parties do not know one another.
However, exchange is such a great benefit to society (and is it not exchange, society itself?) that for purposes of facilitating and increasing exchange, society has not been confined to the introduction of money. In logical order, after need and satisfaction united in the same person through isolated effort, after simple barter, after barter with two factors or compound exchange made up of sale and purchase, there is yet another form of transaction (which is) extended through time and space by means of credit, mortgage titles, letters of exchange, bank notes, etc. Thanks to these marvelous mechanisms,43 born of civilization, which advance it and are themselves advanced by it, an effort undertaken today in Paris will go to satisfy an unknown person beyond the seas and across the centuries, and he who carries it out receives his compensation now, (since) there are people who make loans to cover this payment and are prepared to subject themselves to asking for their payment in far-off countries or to waiting for it in the remote future. This complication, as astonishing as it is marvelous, when analyzed in detail, in the end shows us the unity/integrity of the economic phenomena of “need, effort and satisfaction”, taking place within each individual according to the law of justice.
The Limits to Exchange
The general characteristic of all exchange is that it decreases the ratio of effort to satisfaction. Between our needs and satisfactions there are obstacles that we succeed in reducing by the joint use of our strength or the division of labor, that is to say through exchange. However, exchange itself encounters obstacles and requires effort. The proof of this lies in the immense amount of human labor it generates. Precious metals, roads, canals, railways, carriages, or ships: all these things absorb a considerable amount of human activity. What is more, look at the number of men whose sole occupation lies in facilitating exchange, how many bankers, traders, merchants, brokers, coachmen, or sailors there are! This huge and costly apparatus is better proof than all forms of reasoning of the power that lies in our ability to exchange. Without it this why would the human race have agreed to impose such an apparatus on itself?
Since it is in the nature of exchange both to save on efforts and to demand (more of) them, it is easy to understand what its natural limits are. Because of the force that impels man always to choose the lesser of two evils, exchange will expand as long as the effort required by it is less than the effort he saves. And exchange will stop naturally when, in the end, the sum of satisfactions obtained by the division of labour is less, because of the difficulties of (further) exchange, than if they were got by direct production.
Take the case of a small group of people. If it wants to get satisfaction for itself it has to make an effort. It can go to another group and say to it: “Make this effort for us and we will make another for you.” This stipulation may suit everyone if, for example the second group, because of its situation, is in a position to bring to the undertaking a greater proportion of natural and freely available resources. In this case, it will achieve the result using an effort equal to, let us say, 8, where the first group would only be able to do this with an effort of 12. With the undertaking needing only 8, there is a saving of 4 for the first group. However, there is then the transport and payment for the middlemen,44 in a word, the effort required by the apparatus of exchange. This obviously has to be added to the figure of 8. The exchange will continue to be carried out as long as the exchange itself does not cost 4. As soon as this figure is reached, it will stop. It is not necessary to pass laws on this, for either the law will intervene before this equalization is reached, in which case it is harmful, since it prevents an economizing of effort, or it will arrive after this, in which case it is unnecessary. It would be like a decree that forbade lamps to be lit at mid-day.45
When exchange is stopped in this way because it is no longer advantageous, the least advance in the apparatus of commerce will give it fresh impetus. Between Orléans and Angoulême46 there are a certain number of transactions. These two towns exchange services every time that they obtain more satisfaction by doing this than by direct production. They stop doing so when production through exchange, increased by the cost of the exchange itself, exceeds or reaches the level of effort (required by) direct production. In these circumstances, if the apparatus of exchange is improved or merchants lower the cost of their business, if a tunnel is driven through a mountain or a bridge built over a river, if a road is paved or an obstacle removed, exchange will increase because men want to take advantage of all the benefits we have already acknowledged it has, and because they want to receive any gratuitous utility (that might exist).47 Improvements made to the apparatus of exchange are thus equivalent to moving the two towns closer together. From which it follows that bringing men closer together physically is equivalent to an improvement in the apparatus of commerce. And this is very important; (as) it is the solution to the problem of population. It is the fact overlooked by Malthus.48 Where Malthus saw disharmony, this fact will enable us to see Harmony.49
When men make exchanges, they use this as a way to obtain the same (amount of) satisfaction for less effort, and the reason for this is that both sides render each other services that are a vehicle for acquiring a greater proportion of gratuitous utility.
Now, they will make even more exchanges to the extent that they encounter fewer obstacles and require less effort.
And exchanges will encounter fewer obstacles and require less effort as men are increasingly drawn (closer) together. A higher density of population is thus necessarily accompanied by a greater (amount) of gratuitous utility. It gives more power to the apparatus of exchange and makes available a (greater) proportion of human effort; (thus), it is a cause of progress.50
And, if you wish, let us leave the realm of generality and examine the facts:
Is a street of a given equal length not of more use in Paris than in a deserted town? Is a one kilometer long railway line not of more use in the Department of the Seine than in the Department of Les Landes?51 Is not a merchant in London able to content himself with a lower return on each transaction he makes because of their greater number? In every such example, we we will see that there two apparatuses of exchange that, although they are identical, provide very different services depending on whether they operate in an area with a dense or a sparse population.
The density of the population not only enables better use to be made of the apparatus of exchange, it also enables this apparatus to grow and be improved (upon). That such a beneficial improvement can be achieved in an area with a dense population is explained because this will enable it to save more effort than it requires, something which it cannot achieve in an area which is sparsely populated because it would require more effort than it could save.
When you leave Paris for a short while to live in a small provincial town you are surprised to find how often you cannot obtain certain services unless you pay (the) high(er) costs (involved), spend a great deal of time, and overcome a thousand obstacles.
It is not only the physical side of the apparatus of commerce that is used and improved by the sole fact of the density of the population, but also the moral side. People living close together are more capable of participating in the division of labour, joining forces, and forming associations to found schools and museums, building churches, providing for their security, establishing banks or insurance companies, in a word, getting for themselves certain communal/common benefits with considerably less expenditure of effort by each individual.
But we will return to these matters when we come to the question of Population.52 Let us limit ourselves to the following comment:
Exchange is a means given to man to make better use of his faculties, to economise on his use of capital, to achieve a greater input from the gratuitous resources of nature, to increase the proportion of gratuitous utility to onerous utility, and consequently to reduce the ratio of effort to result. (He will thus) have at his discretion more of his powers, after attending to his most pressing and urgent needs in their order of priority, to devote to pursuing enjoyments of an increasingly higher order.53
While exchange saves effort, it also demands it. It extends, increases, and multiplies up to the point at which the effort it requires equals the effort it saves, and stops at this point until there are improvements to the commercial apparatus, or merely because the population becomes more dense and men live closer together, making the conditions right for it to resume its upward progress. From this it follows that laws that limit exchange are always harmful or unnecessary.
As they are always ready to think that nothing good happens without them, governments refuse to understand this law of harmony:
Exchange develops naturally up to the point at which its cost outweighs its usefulness and it stops naturally at this limit.
Consequently governments can be seen everywhere spending a lot of time encouraging or restricting it (exchange).
To take exchange beyond its natural limits, they go out to conquer markets and colonies.54 To keep it within these limits, they dream up all sorts of restrictions and impediments.
This intervention of force in human transactions is followed by countless harms.55
The increase in (the size of) this force is itself already an initial harm, for it is perfectly clear that the state cannot make conquests, keep distant countries under its domination, and divert the natural course of trade through the activities of the Customs Service, without greatly increasing the number of its agents.56
This diversion of the coercive power of the state (from its proper purpose) is an evil even greater than its increase. The rational purpose of government is to protect all forms of freedom and property and here we find it, applied to violating the freedom and property of its citizens. When they act like this governments seem bent on removing from people’s minds any principled notions at all. As soon as it is accepted that oppression and plunder are legitimate because they are legal,57 provided that they are carried out on the citizens only through the intermediary of the law and the (coercive power of) the state, gradually we begin to see each class stepping forward to demand that all the other classes be sacrificed to it.
Whether the intervention of this coercive power in exchanges stimulates some exchanges that would never have been made, or prevents some that would have been made, it cannot fail to cause the simultaneous loss or displacement of labor and capital, and consequently a disturbance (or disruption)58 in the way that populations are naturally distributed. Natural interests disappear at one place, artificial interests are created at another, and people are forced to follow the flow of these (opposing/different) interests.59 This is the reason why we see huge industries established in places where they should never be, (such as) France making sugar and England spinning cotton imported from the plains of India. Centuries of wars have been necessary, rivers of blood spilt, and huge (amounts of) treasure wasted to achieve the result of substituting unsound industries for sound ones in Europe, thus creating opportunities for crises, unemployment, and instability, and finally pauperism.
But I see that I am getting ahead of myself. First of all, we have to ascertain the laws governing the free and natural development of human societies. Later, we will have to study disturbances to them.60
The Moral Force of Exchange
At the risk of upsetting modern sentimentality, it has to be repeated that political economy covers the area known as business and that business is carried out under the influence of self-interest. It is useless for socialist puritans to cry: “It is dreadful, we will change all this!,” (as) their eloquence on this (topic) gives the lie to it constantly. Just try to buy one of their pamphlets at a bookshop on the Quai Voltaire using “fraternity” as payment!61
It would be falling into ranting of another type to attribute morality to acts that are determined and governed by self-interest. Certainly the ingenuity of nature may have organized (the) social order so that these same acts, motivated by a total lack of morality, nevertheless produce moral results. Is this not true of labor? Well, I argue that exchange, whether at the level of simple barter or when it has become a vast (system) of commerce, develops tendencies in society that are more noble than its motives.
God forbid that I should wish to attribute to a single force all that constitutes the grandeur, glory, and appeal of our destiny. Just as there are two types of force in the physical world, a centripetal force and a centrifugal force, there are also two principles which are active in the social world: private, self-interest and feeling or sympathy for others.62 Who is so unfortunate as not to recognize the benefits and joys of the principle of having sympathy for others, shown by friendship, love, filial piety, paternal tenderness, charity, love of one’s country, religious sentiment, and enthusiasm for what is good and beautiful? There are some who say that the inclination to fellow-feeling is just a grandiose form of individualism, and that loving others is just basically an intelligent way of loving yourself. This is not the place to go into this question. Whether our two instinctive impulses are distinct or related, all we need to know is that, far from conflicting with each other, as is constantly being claimed, they combine together and contribute to achieving the same result, namely, the general good.
I have established the following two propositions:
In isolation, our needs are greater than our capacities.
Through exchange, our capacities are greater than our needs.
They explain why society exists. Here are two others that guarantee its unlimited progress (towards perfection):
In a state of isolation, the prosperity of one man harms that of others.
By exchanging with one another, the prosperity of one helps others to prosper.
Is there any need to prove that if nature had intended man to live a solitary existence, the prosperity of one would be an obstacle to the prosperity of another? The greater they were in number, the fewer opportunities of well-being they would have. In any case, we can see clearly how their (greater) number would cause them harm but (we) do not understand how their (greater) number might benefit them. And then, I ask you, how would the principle of fellow-feeling reveal itself? When would it arise? Would we even be able to imagine it?
However, men exchange things. As we have seen, exchange implies a division of labor. It gives rise to professions and trades. Each person concentrates on overcoming one type of obstacle for the benefit of the community. Each person devotes himself to providing it with one type of service. Well, a full analysis of (the nature of) value shows that each service has a value first of all because of its intrinsic utility, and then because it is provided in a wealthier environment, that is to say, within a community that is more inclined to demand it and more capable of paying for it. By showing us artisans, doctors, lawyers, traders, coachmen, and teachers who know how to earn themselves a greater reward for their services in (big cities like) Paris, London, and New York than in the (sparsely populated) heath lands of Gascony,63 the mountains of Wales, or the prairies of the Far West (of America), does experience not confirm for us this truth that men have all the more opportunities of prospering themselves, the more prosperous their surroundings (are)?
Of all the harmonies about which I have written, this is certainly the most important, the finest, the most decisive, and the most fruitful. It implies and encompasses all the others.64 For this reason, I can provide only a very inadequate vindication of it here. It will be fortunate if it emanates from the spirit of this book. It will also be fortunate if it emerges at least with a sufficient degree of likelihood to persuade the reader to achieve certainty (about this) through his own efforts.
For there should be no doubt that this is the reason for deciding between a natural form of organization and the artificial ones.65 It is here and only here that the Social Question lies.66 If the prosperity of all is the condition for the prosperity of each person, we can rely not only on the economic power of free trade, but also on its moral force. It will be enough for men to understand where their true interests lie for (trade) restrictions, industrial jealousy, trade wars, and monopoly to fall under the protests of public opinion; it will be enough for people to ask, not “What will I get out of this?” but “What will the community get out of this?” before demanding this or that measure from the government. I admit that the second of these questions is sometimes asked through the principle of fellow-feeling, but just let light be shed on it, and it will also be asked out of self-interest. At this point it would be true to say that the twin driving forces of our nature contribute to the same result, namely the general good, and it would be impossible to deny the moral power which self-interest has, in both giving rise to (many) transactions, as well as the effects these transactions produce.
Whether we consider relations in terms of man to man, family to family, province to province, nation to nation, hemisphere to hemisphere, capitalist to worker, or (factory) owner to proletarian, I think it obvious that the social question cannot be solved nor even touched on from any point of view, without our first making a choice between the following two maxims:
One man’s profit is another man’s loss.
One man’s profit is another man’s profit.
For if nature has arranged things in such a way that conflict is the law that governs free transactions, our sole recourse is to conquer nature and stifle freedom. If, on the other hand, these free transactions are harmonious,67 that is to say that they tend to improve our conditions and make them more equal, our efforts ought to be limited to allowing nature to (be free to) act and maintaining the rights of/to human freedom.
And this is why I urge the young people to whom this book is dedicated68 to examine carefully the advice it contains and to analyze the deeper nature and effects of exchange. Yes, I am confident that one person will be found among them who in the end will achieve the strict demonstration of the following proposition: Each individual’s good encourages the good of all, just as the good of all encourages the good of each individual, and who will know how to instill this truth in the minds of all by making the proof simple, lucid, and undeniable. This person will have solved the social question, and will be the benefactor of the human race.
Indeed, let us note this: depending on whether this axiom is true or false, the natural social laws are (either) in harmony or in conflict. Depending on whether they are in harmony or in conflict, it is in our interest to conform to them or to free ourselves from them. If therefore it were demonstrated once and for all that in a free society interests are in agreement and encourage one another, all the efforts we now see being made to have governments disrupt the operation of these natural social laws, we would see governments devote themselves instead to allowing these laws to exert their full power. Or rather, no effort in this direction would be needed, other than to refrain from doing anything. In what does the interfering action of government consist? It is deduced from the very goal they have in sight. What is this? To alleviate the inequality assumed to arise from freedom. Well, there is just one means of re-establishing equilibrium, and that is to take from some to give to others. This is in fact the mission that governments have set themselves or that they have inherited, and this is the strict consequence of the epigram: One man’s profit is another man’s loss. Once this axiom is held to be true, coercion has to put right the harm that freedom does. In this way, the governments that we thought were instituted to guarantee freedom and property to each person have undertaken the task of violating all forms of freedom and property, and they are right to do this, if it is here that the actual basis of harm is found. Thus, we see them (governments) everywhere busily engaged in the artificial displacement of work, capital, and responsibility.
On the other hand, a truly incalculable amount of intellectual energy is being wasted in the pursuit of artificial forms of social organization. To take from some to give to others, violating freedom and property, is a very simple goal, but the ways of doing it are infinite. From this arises this multitude of (new social) systems that strike fear in all classes of workers, since by the very nature of their goal they threaten all interests.
Thus we have arbitrary and complicated forms of government, the denial of freedom and property, conflict between classes and nations, and all this is logically encompassed in this axiom: One man’s profit is another man’s loss. And for the same reason, smaller government, respect for individual dignity, the liberty of working,69 free trade, peace between nations, security for person and property are all included in this truth, (that) interests are in harmony, on condition, however, that this truth is generally accepted.
Well, it is a far cry from being so. On reading the foregoing, many people will be inclined to say to me: You are preaching to the converted; who has ever seriously thought of querying the superiority of exchange (with others) over (living in a state of) isolation? In what book, other perhaps than those of Rousseau, have you met this strange paradox?
Those who stop me with this observation forget just two things, two symptoms or rather two aspects of our modern society: that is, the doctrines with which social theorists swamp us and the practices that governments impose on us. Nevertheless, the harmony of interests70 must not be generally acknowledged since, on the one hand the the coercive power of the state is constantly engaged in intervening to upset the natural agreements between interests and on the other, it is constantly being criticised for not intervening enough.
The question is this: Is harm (and I should be clear that when I speak of harm here, it is not the harm that is the necessary consequence of our native/innate weakness) attributable to the action of (these) natural social laws or to the disruption to which we subject this action?
Well, there are two facts that exist side by side: harm and the coercive power of the state (which is) bent on upsetting the natural social laws. Is the first of these the consequence of the second? For my part, I think so; I would even say that I am sure of it. But at the same time, I can testify to this: as the harm develops governments seek a remedy in new disruptions to the operation of these laws, while social theorists criticise them for not disrupting them enough. Am I not entitled to conclude that people do not have much confidence in these natural social laws?
Yes, certainly, if the question is between living in isolation and exchanging with others, we would agree. But if it is between free trade and coerced exchange,71 is the answer the same? Is there in France nothing artificial, compelled, restricted, or coerced in the way services relating to trade, credit, transport, the arts, education, and religion are exchanged? Are labor and capital distributed naturally between farming and manufacturing? When interests are displaced, do they still continue to obey their own impulses? Do we not encounter obstacles everywhere? Are there not a hundred occupations forbidden to the majority of us? Are Catholics not forced to pay for the services of Jewish rabbis and Jews for the services of Catholic priests?72 Is there a single man in France who has received the education his parents would have given him if they were free to do so? Are our minds, habits, ideas, and industry not molded under a regime of arbitrary power or at least an artificial one. Well, I ask you, is the disruption of the free exchange of services not a denial of the harmony of interests? On what grounds does someone come to take away my freedom if not because it is thought harmful to others? Will it be said that it (my freedom) harms me personally? In that case this is one conflict too many. And, Heavens above, what do we make of our situation if nature has instilled in man’s heart a constant, indomitable drive that makes him harm everybody, including himself?
Oh! So much has been tried; so when will we try the simplest thing of all, freedom? Freedom for all actions that do not harm justice, the freedom to live, to develop, and to improve oneself, the freedom to exercise our capacities, and the freedom to exchange services. Would it not have been a fine and solemn sight if the government which arose after the February revolution had addressed the citizens in these words:73
“You have invested me with the (coercive) powers of the state. I will use them only in those instances in which the use of force is permitted, and there is only one : (the pursuit or protection of) justice. I will force everyone to remain within the limits of his rights. May each of you work in freedom during the day and sleep in peace at night. I will be responsible for the security of both person and property; this is my mission and I will carry it out, but I will accept no other. Let there be no misunderstanding between us, therefore. From now on, you will pay me just the small amount which is essential for the maintenance of order and the dispensation of justice. However, you should also understand this fully, from now on each of you will be responsible for your own existence and improvement. Do not turn your gaze constantly in my direction any longer. Do not ask me to give you wealth, work, credit, education, religion, or a moral code.74 Do not forget that the driving force that causes you to advance is within you, and that for my part I only ever act through the use of force, that I have nothing, absolutely nothing other than what I have been given by you, and that consequently I cannot confer the slightest benefit on one person without it being at the expense of others. Therefore you should work in your fields, manufacture and export your products, engage in commerce, provide each other with credit, provide and receive services freely, bring up your children, find them jobs, encourage the arts, improve your minds, refine your sentiments, form close relationships with each other, establish industrial or charitable associations, and unite your efforts both for the individual and the general good. Follow your inclinations, fulfill your destinies according to your capacities, your views, and your foresight. Expect from me just two things: freedom and security, and be fully aware that you cannot demand a third from me without losing both of these.”
Yes, I am convinced that if the February revolution had proclaimed this principle it would have been the final revolution. Could we envisage citizens who are otherwise perfectly free, aspiring to overthrow a government whose action is limited to satisfying the most pressing and most deeply felt of all social needs, the need for justice?
However, it was unfortunately impossible for the National Assembly to go down this path and utter these words. They did not correspond either to its thinking or to the expectations of the public. They would perhaps have cast as much terror into society as a proclamation of communism would.75 “Being responsible for ourselves!” people would have said. “Relying on the State for nothing other than the maintenance of order and peace! Expecting (to get) neither our wealth nor enlightenment from it! No longer being able to blame it for our faults, negligence, and lack of foresight!
Having only ourselves to rely on for our means of subsistence and our physical, intellectual, and moral improvement! Good God! What will become of us? Will society not be overwhelmed by poverty, ignorance, error, irreligion, and perversity?”
Everyone will agree that these might have been the fears expressed on all sides if the February Revolution had proclaimed freedom, that is to say the reign of natural social laws. Therefore either we do not know these laws or we have no confidence in them. We cannot put aside the idea that God has instilled in man impulses that are essentially perverse, that the only right thinking lies in the intentions and views of those in government and that the tendencies of the human race lead to the breakdown of organization and anarchy; in a word, we believe (that there is a) fatal conflict of interests.
For this reason, far from society in France showing the slightest aspiration toward a natural form of organization when the February Revolution broke out, never perhaps have its ideas and hopes been so ardently been turned to (the creation of) artificial schemes. (But) which ones? Nobody knew for sure. According to current parlance, it was a question of trying things out: Faciamus experimentum in corpore vili76. And people seemed to have reached such a degree of scorn for individuality, identifying man so closely to inert matter, that people spoke of carrying out social experiments on people just as you carry out chemical experiments using alkalis and acids. The first experiment was begun in Luxembourg,77 and we know what result it produced. Shortly after this the Constituent Assembly set up a Labour Committee,78 in which thousands of social plans were engulfed. We saw a representative of Fourierism79 seriously asking for land and money (he would doubtless not have waited long before asking for men as well) with which to set up his model form of society.80 Another representative of egalitarianism also offered his program, which was rejected.81 Manufacturers were more fortunate in having their plan accepted. Last of all, recently the legislative Assembly nominated a commission to organize welfare assistance.82
What is surprising in all this is that the holders of power, in order to ensure the stability of their own power, did not now and then step forward to make the point that: “You are making thirty-six million citizens accustomed to thinking that we are responsible for all that happens to them in this world whether for good or ill. On this basis, no form of government is possible.”
Be that as it may, while these various social inventions, honoured by the name of “organisation”,83 differ from one another in procedure, they are all based on the same principle: Taking from some to give to others. Well, it is perfectly obvious that a principle like this cannot have gained such universal approval within the nation unless people are totally persuaded that interests are naturally in conflict with one another and human tendencies are essentially perverse.
Taking from some to give to others!84 I am perfectly aware that things have been happening like this for a long time. But before dreaming up a variety of means to achieve this strange principle for curing poverty, should not the question have been asked whether poverty was not the inevitable result of the fact that this principle had been carried out (already) in one form or another? Before seeking a remedy in new disturbances made to the reign of natural social laws, should people not have made sure that these disturbances were not actually the (cause of) the ills from which society was suffering, and which they were hoping to cure?85
Taking from some to give to others! May I be allowed at this juncture to point out the danger and absurdity of the economic idea behind this so-called social aspiration which was brewing up within the masses and which burst forth with such force in the February Revolution?86
When there are still several strata87 in society, we can understand that the first of these enjoys privileges at the expense of all the others. This is odious but not absurd.
The second strata will not fail in this circumstance to breach the fortifications of privilege, and with the help of the masses it will succeed in bringing about a Revolution sooner or later. In this case, when the power of the state is in its hands, we can also see that it will establish itself as the ones with privileges.88 This is still odious but not absurd and at least not impracticable, for privilege is possible as long as there is the mass of the people below to support it. If the third and fourth strata also stage their own revolution, they will, if they can, also arrange to exploit the masses through cleverly organized privileges. But here we have the bulk of the public who have been trampled on, put under pressure, and worn out, also causing a revolution. Why? What will they do? Perhaps you think that they will abolish all privileges and bring in the reign of universal justice? Will they perhaps say: Away with (all) restrictions, away with shackles, away with monopolies, away with government interventions that benefit one class, away with heavy taxes, and away with diplomatic and political intrigue?89 No, their aim is quite different. They now solicit, and in turn they demand to become privileged. They, the public masses, imitate the upper classes and demand privileges in their turn! They want the right to work, the right to credit, the right to education, and the right to assistance! But at whose expense? They do not go to the trouble of finding out. All they know is that if they were assured work, credit,90 education, and rest in their old age, all free of charge, that would be a good thing and certainly nobody would deny this. But is it possible? Alas, no! And this is why I state that here the element of odiousness disappears but absurdity is at its height.
Privileges for the masses! Dear people,91 do think about the vicious circle in which you are putting yourselves. Privilege assumes that there is someone to enjoy it and someone to pay for it. We can imagine one man who is privileged or one class that is privileged, but is it possible to imagine an entire people who is privileged? Is there another social stratum below you on whom you can place the burden? Will you never understand the strange hoax that has duped you?92 Will you never understand that the state can never give you something with one hand without having taken a little more from you with the other?93 That under this system, far from there being for you any increase in well-being, the aftermath of the process is arbitrary government, (which is) more vexatious, with more powers, more spendthrift and unstable. You will have heavier taxes, more instances of injustice, injurious “ favors”, more restricted liberty, wasted effort, badly misdirected interests, labor and capital, with greed aroused, discontent encouraged, and individual energy stifled.
The upper classes are growing alarmed at this sorry attitude of the masses, and not without cause. They see in it the seed of constant revolutions,94 for what government can withstand the pressure when it has been unfortunate enough to say: “I have power and I will use it to enable everyone to live at the expense of everyone else.95 I will be responsible for universal happiness?” But is the terror felt by these classes not a punishment that is deserved? Have they themselves not given the masses a disastrous example96 of the attitude of which they are complaining? Have they not constantly had their eyes fixed on government favors? Have they ever failed to grant a privilege, whether large or small, to factories, banks, mines, landed property, or the arts, and even to their means of recreation and entertainment, to dancing, music, in short to everything except for the work done by the masses, manual work? Have these classes not urged an increase in the number of public functions in order to increase their standard of living97 at the expense of the masses, and is there now one head of a household who is not thinking about getting a government job for his son? Have they ever voluntarily removed one of the acknowledged inequalities in the tax system?98 Have they not exploited everything, even electoral privilege, for years?99 And now they are amazed and upset because the masses are letting themselves step onto the same slippery slope! But when the attitude of begging has prevailed for so long in the wealthy classes, how do you expect it not to have penetrated into the suffering classes as well?
Nevertheless a great Revolution has been accomplished. Political power, the ability to make laws, and the control of the state’s coercive power has passed to all extents and purposes, if not as a matter of fact quite yet, into the hands of the People, with the coming of universal suffrage.100 Thus, those who caused the problem will be called upon to solve it, and woe betide the country if, following the example it has been given, it seeks the solution in privilege, which is always a violation of the rights of others. It will certainly end in disappointment, and through this, in a great lesson, for while it is possible to violate the rights of many in favor of a few, how could one violate the rights of all in favor of all? But at what price will this lesson have been learnt? What should the upper classes do to prevent this terrible danger? Two things; they should renounce all privileges for themselves and enlighten the masses, for there are only two things that can save society, justice and enlightenment. They should look carefully to see whether or not they are enjoying some form of monopoly, which they can then renounce, whether or not they are benefiting from some artificial inequalities which they can eliminate, whether or not pauperism can be attributed at least in part to some disturbance of the natural social laws, which they can put a stop to, so that they can say while showing their hands to the people: “These hands may not be empty, but they are clean.” Is this what they are doing? Unless I am blind, they are doing quite the opposite. They are beginning by keeping their monopolies, and we have seen them even taking advantage of the revolution to see if they can increase them. Once they have distanced themselves from any possibility of telling the truth and thereby invoking principles, in order not to appear too inconsistent, they promise to treat the people as they are treating themselves, and wave the bait of privilege before their eyes. Only they think they are being very cunning in only granting them now just one small privilege, the right to government assistance,101 in the hope of dissuading them from demanding a large one, the right to to a job.102 And they do not see that systematically extending the axiom: Take from some to give to others, is to strengthen an illusion that creates problems now and dangers for the future.
However, we should not exaggerate. When the upper classes seek a remedy for the harm caused by privilege by extending privilege, they are in good faith and are acting, I am convinced, more through ignorance than through injustice. It is an irreparable misfortune that succeeding governments in France have always put obstacles in the path of teaching political economy.103 The teaching of this subject would be an even greater benefit than our university filling our heads with the prejudices of the Romans104 since a university education fills our heads with Roman prejudices, that is to say, all that is most contrary to social truth. This is what makes the upper classes go wrong. It is fashionable now to speak out against the upper classes. For my part, I consider that never before have they had such benevolent intentions. I believe that they ardently wish to solve the social problem. I believe that they would do more than renounce their privileges and that they would willingly sacrifice part of the property they have acquired to charitable work if, by doing this, they believed they were bringing the sufferings of the working classes to a permanent end. It will doubtless be said that they are being driven by self-interest or fear, and that there is no great generosity in giving up part of their assets to save the rest. It is man’s common prudence to allow a fire to burn some of the undergrowth to protect the trees. Let us not denigrate human nature in this way. Why should we refuse to recognize a less selfish motive? Is it not very natural for the democratic customs that are prevalent in our country to make people aware of the sufferings of their fellow-men? However, whatever the sentiment that is uppermost, what cannot be denied is that everything that can be expressed through general opinion, philosophy, literature, poetry, drama, religious teaching, parliamentary discussion, or journalism reveals more in the well-off classes than just a desire or ardent thirst for a solution to the great problem. Why then does nothing emerge from our legislative Assemblies? Because they do not know this. Political economy offers them the following solution: justice provided by the state and charity provided privately.105 The legislative assemblies take the opposite course and, without realizing it, obey the socialist influence and want to encase charity in law, that is to say, banish justice from it at the risk of killing off private charity at the same time, which is always swift to give way to state provided charity.
Why then do our legislators overturn every notion in this way? Why don’t they leave each one in its (proper) place, fellow-feeling in its natural place, which is (that of) freedom, and justice in its place, which is (that of) the law?106 Why don’t they apply the law exclusively to enforce justice? Might this be because they dislike justice? No, but they lack confidence in it. Justice is freedom and property. Well, they are socialists without knowing it,107 and in order to reduce poverty progressively and expand wealth indefinitely, whatever they say, they have no faith in freedom and property, and consequently no faith in justice. And this is the reason we see them in all good faith seeking to achieve the good through the perpetual violation of what is right.
What may be called natural social laws is the group of phenomena, considered both from their driving force and their results, that govern free transactions between men.
This having been said, the question is this:
Should we let these laws act freely or should we prevent them from acting?
This question amounts to this:
Should we acknowledge each person’s property and freedom, his right to work and exchange at his own responsibility, whether this punishes him or rewards him, and to have the law, which is the coercive power of the state intervene only to protect these rights? Or else, can we hope to reach a greater sum of social happiness by violating property and freedom, by regulating work, upsetting trade, and misdirecting responsibility?
In other words:
Should the law give precedence to strict justice, or should it be the instrument of plunder organized more or less intelligently?
It is very clear that the solution to these questions is subject to the study and knowledge of natural social laws. We cannot utter a reasonable opinion without knowing whether property, freedom, or the groups of services that are voluntarily exchanged between men, encourage them to advance, as economists believe, or to regress, as socialists claim. In the first case, social harm has to be attributed to the disruption of natural laws and the violation of property and freedom by the state.108 It is these disruptions and violations that have to be stopped, and political economy is right. In the second case, (according to the socialists) we do not yet have enough government intervention. Artificial and coerced schemes have not been sufficiently substituted for natural and free ones. These three disastrous principles, justice, property, and freedom are still too much in vogue. Our legislators have not yet assailed them enough. We do not yet take enough from some to give to others. Up to now, we have taken from the majority to give to the minority. Now we have to take from everyone to give to everyone. In a word, plunder has to be “organized” and our salvation will come from socialism.
Fatal Illusions that arise from Exchange.109
Exchange is is society. Consequently, economic truth provides the complete view and economic error the partial view of exchange.110
If men did not trade, each economic phenomenon would be accomplished by (each) individual and it would be very easy for us to note its good and bad effects through observation.
However, exchange has led to the division of labor, in common parlance the establishment of (many) professions and trades. Each service (or each product) therefore has two relationships, one with the person providing it and the other with the one receiving it.
Doubtless, at the end of the day, the man who lives in society, like the man who lives in isolation, is both (a) producer and (a) consumer.111 However, you have to see the difference between these clearly. Man in isolation is nevertheless the producer of the item even as he consumes it. This is almost never so for the man living in society. This is an incontrovertible fact, and one that each of us can verify for ourselves. Besides, this results from the fact that society is nothing more than the exchange of services.
We are all producers and consumers, not of a product but of the value we have produced. While exchanging objects we always remain the owners of their value.
It is from this that all illusions and economic errors arise. It is certainly not superfluous to point out at this juncture the way the human mind works in this connection.
The general term obstacle can be given to everything that comes between our needs and our satisfactions, and which stimulates the intervention of our effort.
The relationship between these four elements, need, obstacle, effort, and satisfaction112 are perfectly visible and understandable in men living in isolation. Never, ever, would it occur to us to say:113
“It is a pity that Robinson Crusoe does not encounter more obstacles, for if he did, he would have more opportunity of making an effort; he would be wealthier.”
“It is a pity that the sea washed up useful objects on the shores of the Island of Despair, useful objects like planks, food, weapons, and books, for this has deprived Robinson Crusoe of the opportunity of making efforts; therefore he is less wealthy.”114
“It is a pity that Robinson Crusoe invented nets to catch fish or game, for that has reduced the amount of effort he has had to expend for a given result; he is less wealthy.”
“It is a pity that Robinson Crusoe is not sick more often. This would give him the opportunity of curing himself, which is work, and since all wealth comes from work he would be more wealthy.”
“It is a pity that Robinson Crusoe was successful in putting out the fire that threatened his hut. There he lost a precious opportunity for work; he is less wealthy.”115
“It is a pity that the soil on the Island of Despair was not more arid, water more distant, and that there were fewer hours of sunlight each day. Robinson Crusoe would have had to take more trouble to feed himself and provide himself with drink and light; he would be more wealthy.”
Never, I say, would anyone put forward such absurd propositions as oracles of the truth. It would be only too palpably obvious that wealth does not consist in the intensity of the effort devoted to each satisfaction achieved and that it is precisely the contrary that is true. It would be understood that wealth does not lie either in need, obstacles, or effort, but in satisfaction, and nobody would hesitate to acknowledge that while Robinson Crusoe is both a producer and a consumer, in order to assess his progress it is not his work but the results of it that have to be considered. In short, by proclaiming the following axiom: that the most important interest is that of the consumer;116 we believe that we are just expressing a genuine truism.
How fortunate are those nations who see clearly how and why the things we find right and wrong when it concerns man in isolation are still right or wrong when it concerns man in society!
Nevertheless, what is certain is that the five or six propositions that appeared absurd to us when applied to the Island of Despair appear so incontrovertible to us when applied to France that they are used as the basis for our entire economic legislation. On the contrary, the axiom that seemed to us to be the essence of truth when applied to individuals is never invoked in the name of society without raising a scornful smile.
Could it be true then that exchange changes our very nature as human beings to such an extent that what causes poverty in individuals is the cause of wealth in society?
No, that is not true. However, it has to be said that it is seductive, highly seductive even, since it is so widely believed.
Society consists in this: we work for one another. We receive more services the more we render, or the more those services we render to others are more highly valued, sought after, or well paid (for). On the other hand, the division of labor means that each of us applies his efforts to overcoming an obstacle that lies in the way of the satisfaction of someone else. Farmers combat the obstacle known as hunger, doctors that known as disease, priests that known as vice, writers that known as ignorance, miners that known as cold, etc., etc.
And, since all those who surround us are all the readier to reward our efforts when the obstacle hampering them is clearly seen, it follows that we are all inclined, from (our) point of view as producers, to cultishly exaggerate the importance of that which we make our business to remove. We consider ourselves to be wealthier if these obstacles increase (in number) and immediately conclude that what is to our individual advantage is to the advantage of all. …. 117
1 The title of this chapter is “L’Échange” which can be translated as “exchange” or as “trade,” especially in the phrase “le libre-échange” (free trade). We have translated it in the more general sense of “exchange” unless the context suggests “trade” would be better.
2 This is a paraphrase by Bastiat, probably from memory as he was want to do. In a discussion of modern illnesses Montaigne relates how the natives of Brazil die of old age rather than disease and how happy they are with their life of simplicity: “Les bestes nous montrent assez combien l'agitation de nostre esprit nous apporte de maladies: ce qu'on nous dict de ceulx du Bresil, qu'ils ne mouroient que de vieillesse, on l'attribue à la serenité et tranquillité de leur air; ie l'attribue plustost à la tranquillité et serenité de leur ame, deschargee de toute passion, pensee, et occupation tendue ou desplaisante ; comme gents qui passoient leur vie en une admirable simplicité et ignorance, sans lettres, sans loy, sans roy, sans religion quelconque.” Michel Eyquem de Montaigne, Essais de Montaigne. Nouvelle édition.(Paris: Lefèvre, 1818). Vol. III, Livre II, Chap. XII, "Apologie de Raimond Sebond,” p. 110. English translation: “Beasts sufficiently show us how much the agitation of the soul brings infirmities and diseases upon us. That which is told us of the people of Brazil that they never die but of old age, is attributed to the serenity and tranquillity of the air they live in; but I attribute it to the serenity and tranquillity of their soul, free from all passion, thought, or employments, continuous or unpleasing, as people that pass over their lives in an admirable simplicity and ignorance, without letters, without law, without king, or any manner of religion.” Essays of Montaigne. Translated by Charles Cotton. Edited by William Carew Hazlitt, in Three Volumes. (London: Reeves and Turner, 1877), vol. 2, p. 211.
3 See Rousseau, Book I, Chap. 6 “The Social Pact” in The Social Contract (Cranston ed. 1968), pp. 59-62.
4 At various times Bastiat supplements his trilogy of key concepts of “besoin, effort, satisfaction” (need, effort, satisfaction) with additional ideas such as “désirs” (wants or desires), “goûts” (tastes), “jouissances” (pleasure or enjoyment), “penchants” or “tendances” (preferences), and “obstacles.“ The latter is discussed in a draft which his French editors Paillottet and Fontenay included at the end of this chapter. See below, pp. 000.
5 The word “l’activité” might also be translated as “action” or “human action.” Elsewhere Bastiat explicitly talks about “l’action humaine” in a way that Austrian school economists have explored in considerable detail. There are 6 occurrences of this term in EH. In this sentence he also uses the phrase “notre principe actif” (our acting nature). See the glossary on “Human Action” in CW3.
6 See the glossary on “Service for Service” in Further Aspects of Bastiat’s Thought, CW4, pp. 000.
7 In the FEE translation the word “capacité” was translated as “productive capacity.” We prefer to use the more general term as it includes more than just economic capacity such as intellectual, moral, or physical capacities.
8 Throughout this chapter Bastiat uses the phrase “l’état sociale” (the social state) in contrast to “l'état de nature” (the state of nature). Depending upon the context, we also translate the former as simply “society.”
9 Bastiat often uses terminology drawn from a mechanical clock to describe the “social mechanism.” He refers to “les rouages, les ressorts et les mobiles” which we have translated as “cogs or wheels, springs, and movements”. We also translate “les mobiles” as driving forces, motivating forces, or motives depending on the context. Here he refers to “les mobiles, les ressorts”. See “The Social Mechanism and its Driving Force” in Further Aspects of Bastiat’s Thought, CW4, pp. 000.
10 Bastiat inserted this cryptic reference to the economist Jean-Baptiste Say with no explanation. Find reference???
11 See chapter V on “Value,” below, pp. 000.
12 For some reason Bastiat switches from using the word “capacités” here and uses the word “facultés,” but given what he has said previously we have continued to translate it as “capacities.”
13 Bastiat may have read Daniel Defoe’s novel The Life and Strange Adventures of Robinson Crusoe of York, Marriner (1719) in English but he would also have had access to several translations into French – one in 1817, 1827, and two in 1837. See “Bastiat’s Invention of ‘Crusoe Economics’,” in the Introduction to CW3, pp. lxiv-lxvii.
14 The Abbé de Condillac (1714-80) was a priest, philosopher, economist, and member of the Académie française. Condillac was an advocate of the ideas of John Locke and a friend of the encyclopedist Denis Diderot. In his Traité des sensations (1754), Condillac claims that all attributes of the mind, such as judgment, reason, and even will, derive from sensations. His book Le Commerce et le gouvernement, considérés relativement l'un a l'autre (1776) appeared in the same year as Adam Smith’s Wealth of Nations.
15 Bastiat is not quoting Condillac directly here but paraphrasing him. Condillac stated in a chapter on lending at interest that a loan is “advantageous to both contracting parties”: “Personne ne condamnera ce marché qui se fait librement, qui est tout-à-la-fois avantageux aux deux parties contractantes, et qui, en multipliant les marchands, augmente la concurrence, absolument nécessaire au commerce pour l'avantage dé l’état.” Which can be translated as: “No one will condemn this transaction, which is freely made and is at one and the same time advantageous to both contracting parties, and which, by multiplying the number of merchants, increases competition, an absolute necessity if trade is to benefit the state.” See Étienne Bonnot de Condillac, Le Commerce et le gouvernement considérés relativement l'un a l'autre: ouvrage elementaire (Paris; l'Imprimerie de P. Catineau An VII (1798)), Part 1, Chap. XVIII "Du prêt à l'intérêt”, p. 126-7; and Étienne Bonnot, Abbé de Condillac, Commerce and Government Considered in their Mutual Relationship, translated by Shelagh Eltis, with an Introduction to His Life and Contribution to Economics by Shelagh Eltis and Walter Eltis (Indianapolis: Liberty Fund, 2008), p. 171. </titles/2125#Condillac_1460_835>.
16 Bastiat’s rejection of Condillac’s theory of a “double et empirique profit “ (a double and observable/measurable profit) is strange as Bastiat himself in places seems very close to having reached this same conclusion which is a key insight of subjective value theory. See also below, pp. 000. Example of FB???
17 Jean-Baptiste Poquelin (or Molière) (1622- 1673) was a playwright in the late 17th century during the classical period of French drama. Bastiat quotes Molière many times in the Sophisms as he finds his comedy of manners very useful in pointing out political and economic confusions. See especially, The Misanthrope (1666); L’Avare (The Miser) (1668); Le Bourgeois gentilhomme (The Would-Be Gentleman) (1670); Le malade imaginaire (The Hypocondriac) (1673).
18“Because there is in it a soporific virtue that induces sleep.” [FEE trans.]. Molière had a very low opinion of the practice of 17th century medicine with its purges and use of leeches. The last play he wrote Le malade imaginaire (The Imaginary Invalid, or the Hypocondriac) (1673) ends with an elaborate dance of doctors and apothecaries (and would be doctors) in which a new doctor is inducted into the fraternity. Most of the dialog is in Latin, including the swearing in of the new doctor (Bachelierus) by Praeses. Here Bachelerius replies to the First Doctor’s question about the properties of opium. See, Oeuvres complètes de Molière. Édition revue sur les textes originaux, précédée de l'éloge de Molière par Chamfort et de sa vie par Voltaire. (Paris: A. Sautelet et comp., 1825), p. 481. See also Bastiat’s parody of this scene in ES2 9 "Theft by Subsidy” (Jan. 1846), in CW3, pp. 000.
19 Bastiat does not take into account the idea that some of the farmer’s crop might be superfluous to his “current personal needs,” instead he assumes that the wheat is somehow superfluous in general.
20 Bastiat uses the phrase “l’échange libre” (free exchange) as opposed to the more common expression “le libre échange” (free trade) used to describe the free trade movement. Interestingly he has a witty economic sophism about these two quite similar but in the end different phrases are used. See ES2 13 “The Fear of a Word” (June 1847), in CW3, pp. 000.
21 The phrase “la nature même des choses” (the very nature of things) was a popular one among the economists. J.B. Say used it frequently and this practice was taken up by later economists like Bastiat and Molinari. Example???
22 This was the famous example used by Adam Smith in the Wealth of Nations. Smith used the manufacture of pins to illustrate how the division of labour increased output. He discusses this apparently “frivolous example” in his Lectures On Jurisprudence twice, Tuesday. March. 29. 1763 and Wednesday. March. 30. 1763; and most famously in the “Of the Division of Labour” in Wealth of Nations. Smith’s contemporary, Turgot in Reflections on the Formation and the Distribution of Riches (1770) used the example of “the workhouse of a tanner” which supplies leather for the shoe maker. J.B. Say also used the example of the pin factory in his Treatise on Political Economy. David Ricardo, on the other hand, preferred the example of the manufacture of stockings. In a later work, Cours complet d'économie politique pratique (1828), Say thought a better example was provided by the mass production of playing cards. The son of J.B. Say, Horace Say, expanded the now classic story of the pin factory to include all the suppliers, both domestic and international, who made the mass production of pins possible. See the entry on “The Division of Labour” which appeared in the DEP (1852), pp. ???.
23 References for pin footnote: Lectures On Jurisprudence, ed. R. L. Meek, D. D. Raphael and P. G. Stein, vol. V of the Glasgow Edition of the Works and Correspondence of Adam Smith (Indianapolis: Liberty Fund, 1982). Tuesday. March. 29. 1763 and Wednesday. March. 30. 1763. pp. 341-42, 349.
Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations, Vol. I ed. R. H. Campbell and A. S. Skinner, vol. II of the Glasgow Edition of the Works and Correspondence of Adam Smith (Indianapolis: Liberty Fund, 1981). Chapter: [I.i] CHAPTER I: Of the Division of Labour, pp. 14-15.
Anne-Robert-Jacques Turgot, Reflections on the Formation and the Distribution of Riches, trans. William J. Ashley (New York: The Macmillan Co., 1898). 60. Explanation of the use of the advances of capitals in enterprises of industry; on their returns and the profits they ought to produce. </titles/122>.
Jean-Baptiste Say, A Treatise on Political Economy; or the Production, Distribution, and Consumption of Wealth, ed. Clement C. Biddle, trans. C. R. Prinsep from the 4th ed. of the French, (Philadelphia: Lippincott, Grambo & Co., 1855. 4th-5th ed. ). Chapter: BOOK I, CHAPTER VIII: OF THE ADVANTAGES AND DISADVANTAGES RESULTING FROM DIVISION OF LABOUR, AND OF THE EXTENT TO WHICH IT MAY BE CARRIED. </titles/274#Say_0518_267>.
David Ricardo, The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 1 Principles of Political Economy and Taxation. Chapter: chapter xx: Value and Riches, their Distinctive Properties. </titles/113#Ricardo_0687-01_701>.
J.B. Say, Cours complet d'économie politique pratique. Ouvrage destiné à mettre sous les yeux des hommes d'état, des propriétaires fonciers et des capitalistes, des savants, des agriculteurs, des manufacturiers, des négociants, et en général de tous les citoyens l'économie des sociétés, Volume 1. 2nd ed. Horace Say (Paris:Guillaumin, 1840). 3rd ed. 1852. vol. 1 CHAPITRE XV. De la Division du travail, pp. 165-166.
Horace Say, “The Division of Labor,” in John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States by the best American and European Authors, ed. John J. Lalor (New York: Maynard, Merrill, & Co., 1899). Vol 1 Abdication-Duty. Chapter: DIVISION OF LABOR. </titles/1679#Lalor_0216-01_5064>.
24 Bastiat referred to this quotation by Rousseau several times in his work. The quote comes from J.J. Rousseau’s Discourse on Inequality, Part I, p. 90 (Cranston trans.) but Bastiat is quoting from memory here and it is not exactly correct. The French states: “…ce n’est pas chez lui [l’homme sauvage] qu’il faut chercher la philosophie dont l’homme a besoin, pour savoir observer une fois ce qu’il a vu tous les jours.” Rousseau, Du contrat social et autres oeuvres politiques, ed. J. Ehrard, p. 49. [.. and we should look in vain to him for that philosophy which a man needs if he is to know how to notice once what he has seen everyday]. Bastiat was so impressed with this statement that he refers to it several times in the Economic Harmonies.
25 This is also another example of Bastiat’s notion of “the seen” and the “unseen.”
26 Bastiat has reworked the third item by adding material by Smith who elaborated on this point a few pages later when he discusses how “simple workmen” who used the tools figure out better ways to use them. See, Wealth of Nations, Book I, chap. 1, section 5, Glasgow ed., p. 17-19.
27 The preceding chapter was III.“The Needs of Man.”
28 Here again is Bastiat’s distinction between “l'utilité gratuite” (gratuitous utility, or utility which is free of charge) and “l'utilité onéreuse” (onerous or costly utility). The the glossary on “Utility.”
29 Note by Bastiat: What is more, this type of slave, because of its superior strength, ends up in the long run lowering costs and emancipating all the other (slaves). This is a (form of) harmony whose consequences I leave to the wisdom of the reader to appreciate. [Editor: Bastiat is referring to a debate which had been taking place among economists concerning the economic viability of slavery. Some, like Smith???, argued that free labour was more productive than slave labour because of things like the incentive problem faced by slaves to work harder. Others, like Say, believed that tariff protection for colonial sugar producers and the tax-payer funded subsidy to the army and navy to prevent slave revolts kept the slave system profitable for the owners. Free trade and cuts to military spending would remove these subsidies and make slavery unprofitable. As a deputy in the Constituent Assembly after the February 1848 Revolution, one of the first items he voted on was Schoelcher’s bill to abolish slavery in the French colonies. Slavery played an important part in Bastiat’s theory of plunder where it was a key stage in its historical evolution. See the glossaries on “French Slavery” and “Bastiat’s Theory of Plunder.” Ideas of Storch??
30 Antoine Destutt de Tracy (1754-1836) was one of the leading intellectuals of the 1790s and early 1800s and a member of the “ideologues” group who professed that the origin of ideas was material–not spiritual. During the French Revolution he joined the Third Estate and renounced his aristocratic title. During the Terror he was arrested and nearly executed. Tracy continued agitating for liberal reforms as a senator during Napoleon’s regime. One of his most influential works was the four-volume Éléments d’idéologie (first published in 1801-15), one volume of which became his Traité d’économie politique (1823) which was much admired by Jefferson and Bastiat.
31 A. L. C. comte Destutt de Tracy, Traité d'économie politique (Paris; Bouguet et Lévi, 1823), p. 79. Chap. 1 “De la société.”
32 It seems Bastiat is being obtuse here as what he goes to say does imply that in fact there is a “benefit” to both parties as both are made better off as a result. It seems that he does not want to call this “benefit” a “gain” or a “profit” for some reason. Although Bastiat was very close to having a subjective theory of value this passage suggests he refused to go down the path blazed by Condillac and Storch.
33 Bastiat’s use of the word “la consommation” could be a pun as the word has the meaning of both “consummation” or end product or result of something, and “consumption” as in the final purpose of production is the consumption of the goods produced or services rendered.
34 See the gloss on “Service for Service.”
35 see chap V On Value.
36 The town where Bastiat lived, Mugron, was a commune in the canton of Mugron, in the arrondissement of Dax, in the département of Les Landes, in the region of Aquitaine. The nearest large city was the port town of Bayonne.
37 Bastiat uses the word “désir” (desire) here and not the more usual word “besoins” (needs).
38 Bastiat is very terse here and we have expanded his sentence somewhat to make it more understandable.
39 FB’s different kinds of barter: le troc, le troc simple, le troc circulaire; un troc composé Note??
40 Bastiat misremembers the source. It is not by Say but by the Russian economist Storch, whose work Cours d'économie politique was re-issued by Say without Storch’s permission but with extensive notes and comments by Say. The relevant passage is: “Ils ont distingué l'échange d’une marchandise contre toute autre marchandise, de celui qui se fait d’une marchandise contre du numéraire, et ils ont appelé le premier troc, et le second marché. Un marché n’est que la moitié d’un troc, qui s’achève toujours ensuite par un autre marché. Un homme, par exemple, qui échange du vin contre de la toile, fait un troc; mais celui qui a besoin de toile, et qui échange son vin contre de l'argent, ne fait que la moitié d’un troc, puisqu’il lui faut ensuite échanger l'argent contre de la toile. Chaque marché se compose d’un achat et d’une vente. Le vendeur, c’est celui qui cède la marchandise; celui qui l'acquiert et qui la paie, c’est l'acheteur. Dans les trocs, chacun des deux troquans fait également l’offre et la demande; dans les marchés, le vendeur seul est censé être l’offrant, et l'acheteur seul être le demandeur.” In Heinrich Friedrich von Storch, Cours d'économie politique ou exposition des principes, qui déterminent la prospérité des nations. Ouvrage qui a servi à l'instruction de LL. AA. II. les grands-ducs Nicolas et Michel. Avec des notes explicatives et critiques par J.-B. Say (Paris: J.P. Aillaud, 1823), vol. 1. pp. 88-89. Henri Storch (1766-1835) was a Russian economist of German origin who was influenced by the writings of Adam Smith and Jean-Baptiste Say. He was noted for his work on the economics of unfree labor (particularly that of serfdom), the importance of moral (human) capital to national wealth, comparative banking, and the greater wealth-producing capacity of industry and commerce compared with agriculture. His major theoretical work was his six-volume Cours d'économie politique, ou exposition des principes qui déterminent la prospérité des nations (1815).
41 Under the Old Regime Louis XIII in 1640 replaced the old franc with a system based upon three coins: the “louis d'or” (gold Louis), the “louis d'argent” (silver Louis) or “silver écu”, and the “liard” (made of copper). Even though French currency was decimalised during the Revolution people continued to use the traditional names of the coins. See the glossary on “French Currency.”
42 Bastiat planned to include a chapter on Money in EH (see below, pp. 000) but did not get around to writing it. His major writings on money and credit are “Damned Money” and “Free Credit” in CW4, pp. 000.
43 Bastiat uses two specific phrases “l’appareil commercial” (the apparatus of commerce) and “l’appareil de l’échange” (the apparatus of exchange) to describe two particular forms of the “mechanism” which drive society. See “The ‘Apparatus” or Structure of Exchange” in Further Aspects of Bastiat’s Thought, CW4, pp. 000; and “The Social Mechanism and its Driving Force” in Further Aspects of Bastiat’s Thought, CW4, pp. 000.
44 See Bastiat’s chapter on “The Middlemen” in WSWNS 6, CW3, pp. 422-27.
45 This is the opposite of what happens in Bastiat’s famous economic sophism of “The Petition of the Candlemakers” who lobbied the government to force people to pull down the shutters and close their curtains during the day in order to increase sales of candles and other forms of artificial light to help the manufactures compete with the lower cost light provided by the sun. ES1 7 “Petition by the Manufacturers of Candles, etc.” (JDE, October 1845), in CW3, pp. 49-53.
46 Angoulême is a commune in the south west of France and the main city of the Préfecture of the Département of la Charente, in the region of Nouvelle-Aquitaine. It lies on the Charente river. Orléans is a commune in the centre of France, and the main city of the Département of Loiret, in the region of Centre-Val de Loire. It lies on the Loire river.
47 Several of Bastiat’s economic sophisms deal with the erection of barriers to trade in amusing ways. See for example, S1 16 “Blocked Rivers Pleading in Favor of the Prohibitionists” (c. 1845), in CW3, pp. 80-81; ES1 17 “A Negative Railway” (c. 1845), in CW3, pp. 81-83; ES2 7 “A Chinese Tale” (late 1847), in CW3, pp. 163-67; and ES3 10 “The Spanish Association for the Defense of National Employment and the Bidassoa Bridge” (LE, 7 Nov. 1847), in CW3, pp. 299-305.
48 Bastiat met with considerable opposition from his colleagues in the Political Economy Society for his critical views of Malthus and his theory of population. His chapter on “Population” (XVI) first appeared as an article in 1846 but for some reason did not appear in the 1st edition of EH published in Bastiat’s lifetime. It is likely that he was still working on it when he died, attempting to answer his critics. In brief, Bastiat rejected Malthus’ pessimistic views because he believed he had underestimated the productive power for free markets and free trade to produce greater quantities of food, underestimated the ability of human beings to plan their lives and the size of their families, that human beings were a form of “human capital” and hence worth having in greater numbers, and that larger populations created greater opportunities for trade and reduced transaction costs.
49 Bastiat often paired the words “la discordance” (disharmony” and “l’harmonie” (harmony). See “Harmony and Disharmony” in Further Aspects of Bastiat’s Thought, CW4, pp. 000.
50 Although he doesn’t use the phrase “transaction costs” Bastiat here is aware that greater population density (especially in cities) increases the opportunities for mutually beneficial trade, increases the extent of the division of labour, and reduces the costs of people trading with each other.
51 Bastiat was born in Bayonne in the Department of Les Landes and lived in the nearby town of Mugron for 44 years before he moved to Paris. After the Revolution of February 1848 he was elected to represent Les Landes in the Constituent Assembly (April 12848) and the National Assembly (May, 1849). There was considerable activity in building railways in the 1840s which were highly regulated and subsidisesd by the French government, ass swell as the construction of 5 massive railway stations in Paris. In Bastiat’s lifetime a railway line was being constructed that would eventually link Paris with Bordeaux but he did not live to see it completed. He may well have been able to travel part of the way to Paris by train. There was considerable lobbying by towns to get the new trains to stop at their location, which was satirised by Bastiat in the economic sophism “A Negative Railway” (c. 1845), ES1 17, CW3, pp. 81-83. See the glossary on “The French Railways.”
52 See chap. XVI “On Population,” below, pp. 000.
53 Bastiat several times refers to the idea that individuals have an almost unlimited number of needs which they rank in order of priority from the most urgent and pressing up to much “higher” needs. By moving up/down their prioritized list of needs individuals are able to improve or “perfect” themselves indefinitely. Once the needs which ensure basic survival have been met individuals are able to enjoy the benefits of leisure to enjoy these much higher level spiritual, intellectual, and moral needs. See, “The Importance of Leisure” in Further Aspects of Bastiat’s Thought, CW4, pp. 000.
54 Like Richard Cobden in England, Bastiat and the French free traders were very opposed to empire and colonies. An example of Bastiat’s opposition can be found in his address"To the Electors of the District of Saint-Sever" (1846) in which he stated with reference to France’s policy in Algeria that “To me it is a proven fact, and I venture to say a scientifically proven fact, that the colonial system is the most disastrous illusion ever to have led nations astray.” In CW1, p. 363.
55 Bastiat uses the word “les maux” which can mean “evils” or “harms.” The former has a religious connotation and the latter an economic one. The one we use will depend upon the context.
56 In Bastiat’s day a veritable “army” of public servants worked for the Customs Service. According to Horace Say there were 27,727 individuals (1852 figures) employed, composed of two “divisions” - one of administrative personnel (2,536) and the other of “agents on active service” (24,727). Horace Say, “Douane”, DEP, vol. 1, pp. 578-604.
57 In Bastiat’s theory of plunder he distinguished between “extra-legal plunder” and “legal plunder.” The former was undertaken by thieves and highwaymen and was universally condemned and punished under the legal code. The latter was Bastiat’s term for similar acts of theft and coercion conducted by government officials. See “Bastiat’s Theory of Class: The Plunderers vs. the Plundered” in Further Aspects of Bastiat’s Thought, in CW3, pp. 473-85.
58 Bastiat believed that the natural harmony of economic activity was disrupted by what he called “les causes perturbatrices” (disturbing factors), such as war, slavery, theocratic plunder, high and unequal taxes, government regulations, economic privileges, industrial subsidies, and tariffs. Given time, counterveiling “les forces perturbatrices” (disturbing forces) would gradually return the economy to equilibrium and “harmony.” In EH2 there a draft chapter XVIII on these “Disturbing Factors,” below, pp. 000. See also, “Disturbing and Restorative Factors” in Further Aspects of Bastiat’s Thought, CW4, pp. 000.
59 The distinction between “les intérêts naturels” (natural interests) and “les intérêts factices” (artificial interests) is similar to his distinction between “l’organisation naturelle” (natrual organization” and “l’organisation artificelle” (artificial organization” in Chapter 1, above, pp. 000.
60 Bastiat’s original plan of his book was to have a volume on this very topic, of social harmonies (broadly understood) but because time was running out he had to limit himself to just the “economic harmonies.” The plan was to follow these two book with another on “disharmonies” or the disturbing factors which disrupted the social and economic harmonies.
61 The Quai Voltaire is an stretch along the Seine river in Paris where there are many booksellers' shops and stalls.
62 FEE translated “la sympathie” as “altruism.” We have used “sympathy for others” or “fellow-feeling.”
63 Bastiat’s homeland was called “Les Landes de Gascogne” (the heathlands of Gascony).
64 Give some examples of other specific “harmonies” he wrote about?? The phrasing of this sentence is very similar to the description he gave to one of Montaigne’s essays entitled “Le Profit d’un est dommage de l’autre” (One man’s gain is another man’s loss). Bastiat called this phrase the “classical example of a sophism, the root stock sophism from which comes multitudes of sophisms.” See ES3 15 “One Man’s Gain Is Another Man’s Loss” (n.d.), in CW3, pp. 341-43.
65 See Chapter 1 “Natural and Artificial Organisations,”, above, pp. 000.
66 The “Social Question” (“la question sociale” in France and “die soziale Frage” in the German states) concerned the condition of the working class (to borrow the title of Friedrich Engels’ best known work) in the newly industrializing cities of Europe in the 1830s and 1840s. It embraced working conditions in the factories, child labour, the length of the working day, poverty, public health, wage rates, and so on. Two classic works on “the social question” were the Poor Law Commissioners’ Report of 1834. Copy of the Report made in 1834 by the Commissioners for Inquiring into the Administration and Practical Operation of the Poor Laws. Presented to both Houses of Parliament by Command of His Majesty (London: Printed for H.M. Stationery Off. by Darling and Son, 1905). </titles/1461> and Friedrich Engels, Die Lage der arbeitenden Klasse in England (Leipzig: Otto Wigand, 1845).
67 On Bastiat’s use of the words “harmonique” and “l’harmonie” see “Harmony and Disharmony” in Further Aspects of Bastiat’s Thought, CW4, pp. 000.
68 Bastiat could sense that many of his ideas on things such as harmony and his opposition to Malthusian pessimism, upset many of his colleagues which explains why he kept appealing to the young to understand and carry on his work in the future. He did this explicitly in his “Draft Preface” to the Harmonies which he wrote in the fall of 1847 when he first gave the series of lectures which would later be turned in EH, and then again in the opening to EH1 “To the Youth of Franc e,” above, pp. 000. See also, “Draft Preface for the Harmonies” (late 1847), in CW1, pp. 316-20, also above, pp. 000.
69 To counter the socialists call for “le droit au travail” (the right to a job), at tax-payer expense, the economists used the term “la liberté du travail” (the freedom or liberty of working), which was the topic of a lengthy book by Charles Dunoyer in his De la liberté du travail (1845). See the glossary on “The Right to Work (Le Droit au Travail)”.
70 Another key expression of Bastiat’s is “l’harmonie des intérêts” (the harmony of interests) which he began using in the first half of 1848, first in an essay “Les armements en Angleterre” (Armaments in England), Libre-Échange, 15 Jan., 1848, in CW6 (forthcoming) and then in “Justice et fraternité" (Justice and Fraternity), JDE, 15 June 1848, in CW2, pp. 60-81. He uses the term 8 times in EH.
71 Bastiat uses the pairing of “l'échange libre et l'échange forcé” so we have translated them as “free trade and coerced trade.”
72 Bastiat’s younger friend and colleague Gustave de Molinari in his book Les Soirées de la rue Saint-Lazare (Evenings on Saint Lazarus Street) (1849) discusses these and many other restrictions placed on economic activity by the French state. In the conversation held on “Eighth Evening” he lists the occupations monopolised by the state, the subsidies given to religious groups, and the state monopoly of education. For example the number of bakers and book publishers were strictly limited by the government, only one funeral business was allowed to operate in the city of Paris, and private companies or individuals were banned from carrying and delivering letters. In addition, in the 1848 Budget a total of 39.6 million Francs was set aside for expenditure by the state on religion. Of this 38 million went to the Catholic Church, 1.3 million went to Protestant churches, and 122,883 went to Jewish groups. See Molinari, Soirées, (LF, forthcoming).
73 Writing fictitious petitions and speeches was part of of Bastiat’s “rhetoric of liberty,” most notably “The Petition of the Candlemakers.” We also have examples of Bastiat writing fictitious speeches which he thought should have been given but never were. See his speech in the Chamber (need to find this ???); Sancho’s speech to the people of Barataria in “Barataria” (c. 1848), in CW4, pp. 000; Jacques Bonhomme’s speech to the people of Paris in ES2 13 “Protection, or the Three Municipal Magistrates,” in CW3, pp. 214-26. See also “Bastiat’s Rhetoric of Liberty: Satire and the ‘Sting of Ridicule’,” in the Introduction to CW3, pp. lviii-lxiv.
74 In the first version of what would become his essay “The State” which appeared in the street magazine, Jacques Bonhomme, which he and Molinari and some other friends handed out on the streets of Paris just before the June Days rioting in June 1848, Bastiat lists the ever growing demands the people were making to the state. See, “The State (draft)” (JB, 11 June 1848), in CW2, pp.105-6.
75 It is not known if Bastiat was aware of the writings of Karl Marx who was in Paris during the 1848 Revolution promoting his “Communist Manifesto.” He had written it the previous year and was in Paris in March 1848 to meet with the members of the German Workers Club. This was at the same time Bastiat, Molinari, Charles Coquelin, and Alcide Fonteyraud were active in their own political club, the Club for the Liberty of Working.
76 FEE [“Let us make the experiment on a worthless body.” Quoted by Antoine Teissier, Éloges des hommes scavans (1585). Cf. Thomas Benfield Harbottle, Dictionary of Quotations (Classical) (London, 1906).
77 Louis Blanc was appointed by the Provisional Government to be the president of the “Commission du gouvernement pour les travailleurs” (Government Commission for the Workers) (also known as the Luxembourg Commission as it met in the Luxembourg Palace which before the revolution had housed the Chamber of Peers) which oversaw the National Workshops (Ateliers nationaux) program. The National Workshops were created on February 27, 1848, in one of the very first legislative acts of the Provisional government, to create government funded jobs for unemployed workers. The workshops were regarded by socialists as a key part of the revolution and as a model for the future reform of French society. The increasing financial burden of the National Workshops led the Assembly to dissolve them on June 21, prompting some of the workers to riot in the streets of Paris during the so-called June Days, 23–26 June. The army under General Cavaignac was used to suppress the rioting, resulting in the death of about 1,500 people and the arrest of 15,000 (over 4,000 of whom were sentenced to transportation). As the Vice-President of the Assembly’s Finance Committee Bastiat played an important part in lobbying for their dissolution.See the glossary on “The National Workshops.”
78 Bastiat told Richard Cobden in a letter (27 May, 1848) that he had been appointed to serve on the Labour Committee but had resigned in order to concentrate on the Finance Committee of which he was the vice-president. Letter 100 to Richard Cobden (Paris, 27 May, 1848), CW1, p. 151.
79 Charles Fourier (1772-1837) was a socialist and founder of the phalansterian school, also known as “Fourierism”, which advocated a utopian, communistic system for the reorganization of society. The population was to be grouped in “phalansteries”of about 1,800 persons, who would live together as one family and hold property and work in common.
80 At a meeting of the Political Economy Society held on 10 May 1849 Bastiat participated in a discussion of a proposal put to the National Assembly by the socialist Victor Considerant in a recent debate on 13 April, 1849 in which he reiterated his demand that the government fund an experimental socialist community in order to demonstrate the viability of socialism. The first time he had done this was a couple of days after the February Revolution broke out when he and the other editors of the Fourierist magazine La Démocratie pacifique circulated on the streets of Paris a petition calling on the Provisional Government to create a Ministry of Progress and the Organisation of Work to study socialist ways to reorganise society. They especially called for support from the new government for funding of small experimental socialist communities which would quickly demonstrate (they believed) the feasibility of much larger, even nation wide socialist policies. Bastiat quickly responded to this petition in the 6th issue of his street magazine La République française (Thursday 2 March, 1848) with his own “Petition from an Economist” in which he said a better option would be to set up competing experimental communities to see which one produced the greatest peace and prosperity. He wanted to register his own experimental community with the government to put into practice laissez-faire economic policies. See Bastiat, “Petition from an Economist,” (RF, 2 March 1848), in CW1, pp. 426-29; and “Comments at a Meeting of the Political Economy Society on the Peace Congress and State support for an Experimental Socialist Community” (10 May 1849), in CW4, pp. 000 (forthcoming).
83 Under the influence of socialist writers like Charles Fourier, Louis Blanc, and Proudhon during the 1840s the words “organization” and “association” became slogans used by the socialists to oppose the advocates of free trade and free markets. For these socialists, “L’Organisation” meant the organisation of labor and industry by the state for the benefit of the workers; and “l’Association” meant cooperative living and working arrangements as opposed to private property, exchange on the free market, and the family. See the glossary on “Association and Organisation.”
84 Bastiat wrote several pieces pointing out the absurdity of this idea, such as “Taking Five and Returning Four is not Giving,” Jacques Bonhomme, no. 2, 15-18 June 1848, CW4, pp. 000.
85 This idea was often made by the economists. It can be traced back to the Physiocrat economist François Quesnay’s (1694-1774) essay “Le droit naturel” (Natural Law) (1765) where he states: “Il faut bien se garder d’attribuer aux lois physiques les maux qui sont la juste et inévitable punition de la violation de l’order même de ces lois, instituées pour opérer le bien.” (It is necessary to refrain from attributing to the physical laws which have been instituted in order to produce good, the evils which are the just and inevitable punishment for the violation of this very order of laws.) It was used as the title page quotation for Molinari’s book Les Soirées (1849). Quesnay’s work had b deen recently republished by Guillaumin, in their series Collection des principaux économistes in 1846. See, Physiocrates: Quesnay, Dupont de Nemours, Mercier de la Rivière, l'abbé Baudeau, Le Trosne, avec une introduction sur la doctrine des Physiocrates, des commentaires et des notices historiques, par Eugène Daire, 2 vols. (Paris: Guillaumin, 1846). Volume 2 of Collection des principaux économistes. Quesnay, “Le droit naturel” , chap. III. “De l'inégalité du droit naturel des hommes,” Vol. 1, p.46. Originally published in the Journal d'agriculture, September 1765.
86 In the March 1848 issue of the JDE, the month after the revolution broke out, Bastiat wrote the opening article “Funestes illusions” (Disastrous Illusions) in which he warned about the false hopes the revolutionaries inspired in the people that the government could solve all their problems. Its full title was “Disastrous Illusions: Citizens give the state life. The State cannot give life to its Citizens.” See ES3 24 “Disastrous Illusions” (JDE, March, 1848), in CW3, pp. 384-99.
87 Bastiat uses several words to describe “class.” Here he uses the term “couches” (bed, layer, strata) which he had only begun using in this sense in 1844 with “les dernières couches sociales” (the lowest social strata) in “The Division of the Land Tax” (CW4, pp. 000); in Feb. 1845 with “toutes les couches de la société” (all the strata in society) in “Letter from an Economist to M. de Lamartine” (JDE) (CW4, pp. 000; and with “des dernières couches sociales” ((the lowest social strata) in the Introduction to his book Cobden and the League (published July 1845), in CW6 (forthcoming). He then used in frequently in the two articles he wrote for the Encyclopédie - 5 in the article “on Competition” and 6 in the article “On Population.” Both these articles were revised and appear as chapters in EH, below, pp. 000 and pp. 000. At other times he uses the word “classe” as in “la classe spoliatrice” (the plundering class). See “Bastiat’s Theory of Class: The Plunderers vs. the Plundered” in Further Aspects of Bastiat’s Thought, in CW3, pp. 473-85.
88 He uses the word “des Priviléges" (the privileged ones).
89 In the essay “The Law” (June 1850) Bastiat distinguishes between three possible states of plunder: “l'absence de Spoliation” (the absence of plunder), “la spoliation partielle” (partial plunder), and “la spoliation universelle” (universal plunder). There had never been a society in his view which had not experienced plunder of some kind; partial plunder takes place when a minority plunders and this was historically the most common form of plunder; and universal plunder had only emerged in the democratic era, especially the socialism of 1848, where plunder became mutual and reciprocal. See “The Law” (June 1850), in CW2, pp. 107-46. See also ES2 1 “The Physiology of Plunder” (c. 1847), in CW3, pp. 113-30, especially p. 117.
90 In late 1849 and early 1850 Bastiat engaged in a lengthy public debate with the anarchist Proudhon on the topic of money and credit. Proudhon had tried several times to set up a “Peoples’ Bank” to provide free or very low cost loans to workers. Each attempt failed. Their debate was published as a book Free Credit in February 1850. See CW4, pp. 000.
91 FB speaks to the people using the familiar “tu” form.
92 The word “dupe” is a key word in Bastiat’s theory of plunder and the creation of economic sophisms which are intended to “dupe” the public about the benefits of tariffs and subsidies. See “Bastiat on Enlightening the ‘Dupes’ about the Nature of Plunder,” in the Introduction to CW3, pp. lv-lviii. On “hoaxes” see his “A Hoax” (15 June 1848, JB), CW4, pp. 000.
93 See his “Taking Five and Returning Four is not Giving,” Jacques Bonhomme, no. 2, 15-18 June 1848, CW4, pp. 000.
94 This was an argument Bastiat made in his speech to the Friends of Peace Congress in Paris in August 1849, that high military spending leads to higher taxes which leads to the impoverishment of the masses and thus in the end to more calls for revolution to change the system. See his Speech on “Disarmament, Taxes, and the Influence of Political Economy on the Peace Movement.” (22 Aug. 1849), in CW4, pp. 000.
95 This was of course Bastiat famous definition of the state which he gave in his essay “The State”, that "The state is the great fiction by which everyone endeavors to live at the expense of everyone else” (p. 97). See “The State,” (JDD, 25 Sept. 1848), in CW2, pp. 93-104.
96 See ES3 22 “A Disastrous Remedy” (RF, 14 March 1848), in CW3, pp. 379-80; and ES3 24 “Disastrous Illusions” (JDE, March, 1848), in CW3, pp. 384-99.
97 Bastiat uses here the phrase “les moyens d’existence” which was usually used in discussions of Malthus’ population theory. Malthus and the pessimist school of Malthusians used the phrase “les moyens des subsistance” (the means of subsistance or bare survival” while the optimists like J.B. Say and Bastiat distinguished that from what they called “les moyens d’existence” (the means of existence) which we have translated as “standard of living” which varied according to time, place, and economic conditions, and was ultimately open ended in an upwards direction. See the introduction to the original article version of “On Population,” in CW4, pp. 000.
98 Bastiat opposed indirect taxes on food and tariffs on clothes because they fell most heavily on the poor. He wanted to replace them with a low income tax on all earners and a 5% tariff on all goods. He also discusses the reluctance of the ruling elites to voluntarily give up their privileges in ES2 1 “The Physiology of Plunder” and ES 2 2 “Two Moral Philosophies” where he argues that traditional moral arguments (whether philosophical or religious) have failed to convince rulers of the folly of war and slave owners of the evil of slavery, which means that political economy must step into the breach to provide another set of arguments, what he called an “economic morality,” which would be more convincing. to the ruling elite (about where their true self-interest lies) and the people for whom the economists would expose the lies and falsehoods of the arguments used to justify their rulers’ plunder and oppression.
99 During the July Monarchy (1830-1848) only a very small minority of about 240,000 of the wealthiest tax payers were allowed to vote or stand for election, out of a total population of about 36 million people. Bastiat called them “la classe électorale” (the electoral or voting class). He earned enough from his farm to be a member of this electoral class. See ES3 6 “The People and the Bourgeoisie” (LE, 23 May 1847), in CW3, pp. 281-87.
100 The February Revolution of 1848 introduced universal manhood suffrage (21 years or older), the Constituent Assembly (April 1848) had 900 members (minimum age of 25). Over 9 million men were eligible to vote and 7.8 million men voted (84% of registered voters) in an elected held on 23 and 24 April 1848. Bastiat was elected to represent the département of Les Landes in the Constituent Assembly of the Second Republic.
101 As Vice-President of the Finance Committee of the Constituent Assembly it was Bastiat’s job to report the committee’s recommendations to the Chamber which he did twice in August 1848 on the granting of temporary relief to unemployed workers in the Paris area. He stressed that under no circumstances should this be turned into a permanent program and warned the Chamber of the dangers to the budget if it were. See “Report to the Assembly from the Finance Committee concerning a Grant to assist needy citizens in the Department of la Seine” (9 August 1848), CW4, pp. 000.
102 The liberal Deputies in the Chamber, including Bastiat, had spent the summer of 1848 trying to prevent the socialists from inserting into the new Constitution an explicit statement of the government’s duty to guarantee every worker the right to a job. Bastiat’s statement, along with most of the other important speeches in the debate were included in Garnier’s book Le Droit au travail à l'Assemblée Nationale. They were successful in doing so except for a vague general statement which was included as part of the preamble. See, Le Droit au travail à l'Assemblée Nationale. Recueil complet de tous les discours prononcés dans cette mémorable discussion par MM. Fresneau, Hubert Delisle, Cazalès, Gaulthier de Rumiily, Pelletier, A. de Tocqueville, Ledru-Rolin, Duvergier de Hauranne, Crémieux, M. Barthe, Gaslonde, de Luppé, Arnaud (de l'Ariège), Thiers, Considerant, Bouhier de l'Ecluse, Martin-Bernard, Billault, Dufaure, Goudchaux, et Lagrange (texts revue par les orateurs), suivis de l'opinion de MM. Marrast, Proudhon, Louis Blanc, Ed. Laboulaye et Cormenin; avec des observations inédites par MM. Léon Faucher, Wolowski, Fréd. Bastiat, de Parieu, et une introduction et des notes par M. Joseph Garnier. Paris : Guillaumin, 1848, pp. 373-76. See Bastiat’s Letter to Garnier on the Right to a Job (Oct, 1848), CW4, pp. 000; and also his very important early article “Letter from an Economist to M. de Lamartine. On the occasion of his article entitled: The Right to a Job” (Feb. 1845, JDE), CW4, pp. 000.
103 The teaching of political economy was of great concern to the Economists around Bastiat. There were very few full-time teaching positions in political economy. Michel Chevalier had a chair at the Collège de France (1840) and Joseph Garnier had one at the École des ponts et chaussées (School of Bridges and Highways) (1846) which was an engineering school. Others taught in small private schools or colleges. Both Bastiat and Molinari were able to give some lectures in economics in late 1847, Bastiat at the School of Law and Molinari in a rented hall, but these efforts were interrupted by the outbreak of Revolution in February 1848 and were abandoned. During the debate about tariff reform in 1847 the protectionist Mimerel Committee put pressure on the government to force the economists to stop teaching free trade ideas unless they also taught pro-protectionists views, or in other words an economic version of “teaching the debate.” Opposition to them reached a peak during the Revolution when the Provisional Government in 1848 closed down Michel Chevalier’s chair in political economy at the Collège de France and replaced it with a school for government bureaucrats and administrators. They succeeded temporarily but intense lobbying by the Political Economy Society and their friends like Bastiat in the government had the decision reversed in November that same year. See Bastiat’s “The War against Chairs of Political Economy” (June 1847), CW2, pp. 277-81.; and the glossary on “Teaching Political Economy in the Universities”.
104 Bastiat was very hostile to the teaching of the classics as he believed it imparted the moral and economic values of conquerors, tyrants, and slave owners in the minds of youth. Specific example???
105 The contrast is provided by the adjectives “légale” (legal, i.e. by state coercion) and “privé” (private, by private and voluntary measures), as in the pairing of “la charité privée” (private or voluntary charity) and “la charité légale” (state provided, or compulsory charity). The other pairing did not appear in Bastiat’s writings, i.e. “la justice privée” (privately provided justice) and “la justice légale” (state provided, or compulsory justice). This was deliberate as Bastiat’s younger friend and colleague Gustave de Molinari had argued the previous year in favour of “la justice privée” in an article “The Production of Security” (Feb. 1849) and the “Eleventh Soirée” in Les Soirées de la rue Saint-Lazare (Sept. 1849). Bastiat and the other members of the Political Economy Society rejected this position. See the “Comments at a Meeting of the Political Economy Society on the Limits to the Functions of the State (Part 1) and Molinari’s Book” (10 Oct. 1849), CW4, pp. 000.
106 Note that one of the last pieces Bastiat wrote during the summer of 1850 was his essay The Law (June, 1850) in which he pursued these topics in much greater depth. In CW2, pp. 107-46.
107 This is an argument he also made to the conservative industrialists who supported the policy of protections. He called them “communists” without knowing it. See the pamphlet “Protectionism and Communism” (Jan. 1849), in CW2, pp. 235-65.
108 Here is another example of Bastiat’s used of the adjective “légale,” in the negative sense noted above. In this case in the phrase “la violation légale” (violation (of rights) by the state, by coercion). It is similar to his distinction between “la spoliation légale” (plunder by the state by the use of law) and “la spoliation extra-légale” (plunder by ordinary thieves and robbers outside and in violation of the law). This was first used in the essay “Justice and Fraternity” (15 June 1848) and then again in “The Law”. See “Justice and Fraternity” (JDE, 15 June 1848), in CW2, pp. 60-81, quote on p. 76.
109 The original French editor Paillottet states the the following section was not in the original edition published in Bastiat’s lifetime (Jan. 1850) but was added by him in the expanded posthumous edition of July 1851.
110 In the last work Bastiat wrote in July 1850, WSWNS, hew makes a similar observation about the difference between a good economist and a bad economist: “The entire difference between a bad and a good Economist is apparent here. A bad one relies on the visible effect while the good one takes account both of the effect one can see and of those one must foresee.” See WSWNS “Author’s Introduction,” in CW3, pp. 403-4.
111 See the chapter below on “Producer. Consumer” ??? pp. 000.
112 Bastiat now has has 4 items here whereas in an earlier chapter he uses only three: needs, efforts, and satisfactions.
113 The following is another example of Bastiat’s use of Robinson Crusoe to illustrate some of the principles behind human action and the making of economic decisions. It also is example of one of Bastiat’s preferred rhetorical devices, that of the reductio ad absurdum argument. See, “Bastiat’s Invention of ‘Crusoe Economics’,” in the Introduction to CW3, pp. lxiv-lxvii; and “Bastiat’s Rhetoric of Liberty: Satire and the ‘Sting of Ridicule’,” in the Introduction to CW3, pp. lviii-lxiv.
114 In one of his economic sophisms Bastiat makes the witty observation that perhaps Crusoe would have been better off had he pushed the planks back out to see. See, ES2 14 “Something Else” (LE, 21 March 1847), in CW3, pp. 226-34.
115 In the chapter on “The Broken Window” in WSWNS Bastiat refutes a common argument of protectionists like Saint-Chamans who argued that the Great Fire of London in 1666, by destroying a huge amount of the capital stock which was quickly replaced, was thus a net gain for the nation of some one million pounds sterling (or 25 million francs). Bastiat points out the opportunity costs of this massive loss of property (not to mention life).
116 The interests of the consumer were paramount in Bastiat’s thinking and this is one his clearest statements to this effect. Other quotes???
117 The text breaks off here as it was incomplete.
Drafts of the LF Translation
- Appendix 1: Further Aspects of Bastiat’s Thought (CW5)
- Bastiat and the State
- Collected Works of Bastiat, vol. 4: Miscellaneous Economic Writings
- Collected Works of Bastiat, vol. 5: Economic Harmonies
- Frédéric Bastiat, Chapter IV “Exchange” from Economic Harmonies
- Introduction to Cobden and the League (1845)
- The Collected Economic Sophisms of Bastiat
- What is Seen and What is Not Seen