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

Frédéric Bastiat

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

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

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

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