India! I dare you to be rich

Category: Economics

Bastiat is classical liberal, not anarchist

Some time ago, when I had first read Bastiat’s The Law, I formed the view that he was an extremist libertarian, particularly given his reference to progressive taxation as “legal plunder”.

“legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on.”  [The Law]

(Of course, I agree to most things cited by Bastiat – it is only the taxation issue I’m considering here).

But in his Sophisms, he says: “We don’t refuse taxes to the Government“.

I think if Bastiat had lived long enough to elaborate his position, he might have been similar to Hayek’s flat tax oriented position (and which I broadly support, with a modest level of progressivity).

It seems to me now that since he doesn’t refuse taxes, we must consider him a classical liberal, not libertarian anarchist.

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Stop your stupid “Make in India” ***nonsense***, BJP, and learn from Vishal Kumar Singh

This post should be widely circulated across the length and breadth of India. Let the fools who govern India (and who vote for the fools who govern India in the manner it is currently governed), learn some BASIC truths:

Businesses automatically move when there is demand and profit to be made. Nobody invited FB,Google or Uber to come to India. They came automatically. Businesses will come if a proper environment is there. Modi should focus on governance of India. Make India a well governed country and businesses will come. Travelling and giving foolish speeches will not get businesses to invest.

Let every fool in India understand the basics about the role of government: not to “attract” businesses, but to create the environment for honest competition.

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The producer is ALWAYS anti-social. Policy makers should maximise consumer (not producer) welfare. Bastiat’s proof.

Bastiat proved 170 years ago why the public policy maker must NEVER consider the interest of the producer; only the interest of the consumer.

Every politician must be trained to fully appreciate this basic truth.

Unfortunately, we know too well about the special pleadings of the producers, and how they will ALWAYS seek to over-ride the public interest through protections and subsidies for themselves.

Download all of Bastiat’s sophisims here.


Take the case of any producer whatever, what is his immediate interest? It consists of two things; first, that the fewest possible number of persons should devote themselves to his branch of industry; second, that the greatest possible number of persons should be in quest of the article he produces. Political economy explains it more succinctly in these terms: Supply very limited, demand very extended; or, in other words still, Competition limited, demand unlimited.

What is the immediate interest of the consumer? That the supply of the product in question should be extended, and the demand restrained.

Seeing, then, that these two interests are in opposition to each other, one of them must necessarily coincide with social interests in general, and the other be antagonistic to them.

But which of them should legislation favor, as identical with the public good—if, indeed, it should favor either?

To discover this, we must inquire what would happen if the secret wishes of men were granted.

In as far as we are producers, it must be allowed that the desire of every one of us is antisocial. Are we vinedressers? It would give us no great regret if hail should shower down on all the vines in the world except our own: this is the theory of scarcity. Are we iron-masters? Our wish is that there should be no other iron in the market but our own, however much the public may be in want of it; and for no other reason than this want, keenly felt and imperfectly satisfied, shall ensure us a higher price: this is still the theory of scarcity. Are we farmers? We say with Mr. Bugeaud: Let bread be dear, that is to say, scarce, and agriculturists will thrive: always the same theory, the theory of scarcity.

Are we physicians? We cannot avoid seeing that certain physical ameliorations, improving the sanitary state of the country, the development of certain moral virtues, such as moderation and temperance, the progress of knowledge tending to enable each man to take better care of his own health, the discovery of certain simple remedies of easy application, would be so many blows to our professional success. In so far as we are physicians, then, our secret wishes would be antisocial. I do not say that physicians form these secret wishes. On the contrary, I believe they would hail with joy the discovery of a universal panacea; but they would not do this as physicians, but as men and as Christians. By a noble abnegation of self, the physician places himself in the consumer’s point of view. But as practicing a profession, from which he derives his own and his family’s subsistence, his desires, or, if you will, his interests, are antisocial.

Are we manufacturers of cotton goods? We desire to sell them at the price most profitable to ourselves. We should consent willingly to an interdict being laid on all rival manufactures; and if we could venture to give this wish public expression, or hope to realize it with some chance of success, we should attain our end, to some extent by indirect means; for example, by excluding foreign fabrics in order to diminish the supply, and thus produce, forcibly and to our profit, a scarcity of clothing.

In the same way, we might pass in review all other branches of industry, and we should always find that the producers, as such, have antisocial views. “The shopkeeper,” says Montaigne, “thrives only by the irregularities of youth; the farmer by the high price of corn, the architect by the destruction of houses, the officers of justice by lawsuits and quarrels. Ministers of religion derive their distinction and employment from our vices and our death. No physician rejoices in the health of his friends, nor soldiers in the peace of their country; and so of the rest.”

Hence it follows that if the secret wishes of each producer were realized, the world would retrograde rapidly toward barbarism. The sail would supersede steam, the oar would supersede the sail, and general traffic would be carried on by the carrier’s wagon; the latter would be superseded by the mule, and the mule by the peddler. Wool would exclude cotton, cotton in its turn would exclude wool, and so on until the dearth of all things had caused man himself to disappear from the face of the earth.

Suppose for a moment that the legislative power and the public force were placed at the disposal of Mineral’s committee, and that each member of that association had the privilege of bringing in and sanctioning a favorite law, is it difficult to divine to what sort of industrial code the public would be subjected?

If we now proceed to consider the immediate interest of the consumer, we shall find that it is in perfect harmony with the general interest, with all that the welfare of society calls for. When the purchaser goes to market he desires to find it well stocked. Let the seasons be propitious for all harvests; let inventions, more and more marvellous, bring within reach a greater and greater number of products and enjoyments; let time and labor be saved; let distances be effaced by the perfection and rapidity of transit; let the spirit of justice and of peace allow of a diminished weight of taxation; let barriers of every kind be removed—in all this the interest of the consumer runs parallel with the public interest. The consumer may push his secret wishes to a chimerical and absurd length, without these wishes becoming antagonistic to the public welfare. He may desire that food and shelter, the hearth and the roof, instruction and morality, security and peace, power and health, should be obtained without exertion and without measure, like the dust of the highways, the water of the brook, the air that we breathe; and yet the realization of his desires would not be at variance with the good of society.

It might be said that, if these wishes were granted, the work of the producer would become more and more limited, and would end with being stopped for want of sustenance. But why? Because on this extreme supposition, all imaginable wants and desires would be fully satisfied. Man, like Omnipotence, would create all things by a simple act of volition. Well, on this hypothesis, what reason should we have to regret the stoppage of industrial production?

I made the supposition not long ago of the existence of an assembly composed of workmen, each member of which, in his capacity of producer, should have the power of passing a law embodying his secret wish, and I said that the code that would emanate from that assembly would be monopoly systematized, the theory of scarcity reduced to practice.

In the same way, a chamber in which each should consult exclusively his own immediate interest as a consumer, would tend to systematize liberty, to suppress all restrictive measures, to overthrow all artificial barriers—in a word, to realize the theory of plenty.

Hence it follows:

That to consult exclusively the immediate interest of the producer is to consult an interest that is antisocial;

That to take for basis exclusively the immediate interest of the consumer would be to take for basis the general interest.

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Not all French economists are like Piketty. They have some super-smart ones like Bastiat, as well

Just because there is a Piketty (see this and this) doesn’t mean all French economists are bad.

There are some truly outstanding current French economists. Jean-Jacques Laffont comes to mind as perhaps the brightest living French economist of all.

But we must start paying more attention to the work of Frédéric Bastiat, who died 165 years ago.

His legacy is largely unknown to the English speaking world, since his key works have been translated into English only relatively recently (in the 1990s). Killed by TB at the young age of 49, he would have undoubtedly played a very significant role in bringing down the false propaganda of Marx, had he lived.

The main thing about Bastiat is the passion and clarity he brings to economics.

I’ve converted one of his key writings – “Economic Sophisms” – into Word. I’ll have much more to say about Bastiat’s work in the coming days.

Download his complete works here (in PDF | in Epub)

And his Economic Sophisms” in Word.

These are absolutely brilliant.

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