Frédéric Bastiat’s theory of plunder (1850)
The French economist Frédéric Bastiat (1801-1850) developed a theory of plunder in the late 1840s which he defined in the following way:
When a portion of wealth passes from the person who has acquired it, without his consent and without compensation, to someone who has not created it, whether this is by force or fraud, I say that there has been a violation of property rights and that there has been an act of plunder.
As Bastiat delved deeper into the groups which benefited from tariff protection and subsidies to industry he began to realise that the official justification given to the public, that it was a way of protecting “French jobs” in “French owned industries”, was what he termed a “sophism” designed to obscure and confuse. So he began calling it as he saw it, using “harsh language” like “theft” and “plunder” (and many other similar words) to describe how a small minority used the power of the state - “the law factory” in Paris which churned out special dispensations and privileges to the well-connected - to benefit themselves. In this essay, the second last one he wrote before he died, he summed up his thoughts an the nature of plunder, both in its “legal” form (sanctioned or carried out by the state) and its “extra-legal” form (done by the usual petty criminals and highway robbers). The process and the injustice was the same, as far as he was concerned, in either case. This is the first of several quotations taken from our newly revised and updated translation of “The Law” (June 1850).