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Unseen Benefits of Brexit   Leave a comment

Madeline Grant

https://fee.org/articles/the-unseen-economic-benefits-of-brexit/

In a now-famous essay, “What is Seen and What Is Not Seen,” the great economist Frederic Bastiat warned against judging the value of any activity in a vacuum.

Brexit.pngBastiat’s “broken window fallacy” brilliantly exposes a common tendency to focus on the visible, tangible benefits of an action—the “seen”—while neglecting the “unseen” penalties and long-term drawbacks associated with the same activity—the invisible cost of opportunities foregone.

Though he wrote the essay in 19th-century France, Bastiat’s insights have a timeless wisdom. We live with the consequences of reductive “broken window” thinking every day, especially where public money is concerned. Politicians often praise the visible benefits of public spending, e.g. the number of jobs “created,” without considering whether the funds could have been spent more wisely elsewhere or even how the taxpayer might have spent the cash had it remained in his or her pocket.

For my money, the fraught Brexit debate badly needs a dose of Bastiat.

So far, discussions of the gains and losses of Brexit have understandably tended to focus on the most obvious costs, like the amount Britain may pay in any “Divorce Bill,” the potential “Brexit hit” to companies exporting to the EU, and so on. Of course, these concerns are vitally important, but our focus on the immediate costs of EU departure risks blinding us to the very real costs of maintaining the status quo.

Membership in the European Union carries huge unseen penalties whose implications may not be immediately apparent. The EU’s Common External Tariff, for example, raises prices and so reduces the quantities of goods and services available to ordinary consumers. Since shoppers in the EU lack the counterfactual experience of trading at world prices, this penalty goes unnoticed, but it involves a misallocation of resources on a vast scale.

In adopting the government’s proposed model for close customs cooperation and a common rulebook, we run the risk of finding ourselves with little scope to diverge from EU regulations on goods and unable in practice to strike new trade deals with the rest of the world.

Negotiating the terms of our departure also comes with huge hidden dangers. In adopting the government’s proposed model for close customs cooperation and a common rulebook, we run the risk of finding ourselves with little scope to diverge from EU regulations on goods and unable in practice to strike new trade deals with the rest of the world. It is often pointed out that the UK’s interests in trade agreements are primarily in services, but this makes it even more vital to maintain flexibility over what we can concede in goods to incentivize potential trading partners to strike a deal. The status quo, or anything close to it, carries huge opportunity costs of its own.

Due to a combination of the precautionary principle enshrined in the Lisbon Treaty and the difficulties of getting 28 countries to agree on anything, the EU, intentionally or not, often stands in the way of innovation.

In particular, the precautionary principle, the preferred risk management strategy of EU regulators, places the onus on creators of new technologies to prove their invention is safe where some risk may exist—even if there’s no scientific consensus to suggest any actual harm will occur.

In particular, the precautionary principle, the preferred risk management strategy of EU regulators, places the onus on creators of new technologies to prove their invention is safe where some risk may exist—even if there’s no scientific consensus to suggest any actual harm will occur.

The result? It’s often too much bother to innovate.

During the 19th century, many viewed the emerging railways with a great deal of suspicion. As recorded by cultural anthropologist Genevieve Bell, critics of early locomotives believed “that women’s bodies were not designed to go at 50 miles an hour” and worried that their “uteruses would fly out of [their] bodies as they were accelerated to that speed.” Had Victorian Britain followed some version of the precautionary principle, it’s hard to imagine a single track of rail being laid given the levels of contemporary railway fear.

Of course, moral panic over new technology is nothing new. Now, as in the 1850s, over-cautiousness risks hampering important drivers of future growth.

Given the EU’s structure, history, and current trajectory, the balance of probability suggests AI will be the latest in a long line of missed technological opportunities.

So far, the European Union has taken only tentative steps towards regulating artificial intelligence and robotics, though they are currently consulting on the issue. Yet given the EU’s structure, history, and current trajectory, the balance of probability suggests AI will be the latest in a long line of missed technological opportunities.

Take genetically modified crops. Since their commercialization in many parts of the world during the 1990s, GM crops have raised the quantity and quality of the global food supply while lowering fuel and energy usage, requiring fewer pesticides and reducing both soil erosion and carbon emissions—all with no scientifically-documented evidence of harm to human health. And yet, EU-wide precautionary thinking has meant a de facto ban on GM crops, only one variety of which has ever been approved and grown in Europe.

While farmers outside the EU continue to develop newer, better technologies, hysteria over man-made pesticides has kept European farming methods behind the times. Ironically, foregoing the GM revolution in insect-resistant plant breeding has left European farmers more reliant on pesticides than ever (as has the ECJ’s foolhardy ruling on genome editing earlier this year).

Just last week, the French Finance Minister claimed that EU member states are “very close” to agreeing on a counterproductive tax on the turnover of tech companies, a policy likely to discourage new entrants and inflate costs for consumers.

Given all the above, are the EU’s hyper-cautious regulators likely to pursue a different path when it comes to AI and robotics? Or will it be “business as usual”—namely, when in doubt, tax and over-regulate? Certainly, initial signs, including misguided calls for a “robot tax” from the likes of Guy Verhovstadt, don’t inspire confidence.

If you have to get a human to explain the logic, why bother investing in an AI solution in the first place?

The EU’s new General Data Protection Regulation (GDPR), implemented earlier this year, will almost certainly hinder the development of artificial intelligence by raising costs and limiting access to data. In particular, Article 22 creates a new requirement for humans to review certain algorithmic decisions, a restriction that will significantly raise labor costs, thereby creating a strong disincentive from using AI. After all, the whole point of developing AI is to automate functions that would otherwise be slower, costlier, and more difficult to complete if performed by humans. If you have to get a human to explain the logic, why bother investing in an AI solution in the first place?

These may seem like small concerns in the grand scheme of things, but taken as a whole—and the EU creates a whole lot of regulation—it adds up to an environment often hostile to innovation.

It’s no coincidence that Europe has lagged behind the US for decades when it comes to new inventions, innovations, and entrepreneurship. There are of course important cultural differences between these continents, but much relates to the US government’s comparatively light-touch regulatory approach. Not for nothing are there no tech giants in Europe to rival Facebook, Google, Apple, or Amazon.

Creating a competitive, innovation-friendly atmosphere is a huge potential hidden “win” of Brexit—with correspondingly huge opportunity costs from failing to do so.

Creating a competitive, innovation-friendly atmosphere is a huge potential hidden “win” of Brexit—with correspondingly huge opportunity costs from failing to do so. Indeed, with more leading universities than the rest of Europe put together and an already thriving tech sector, Britain has much to lose compared to many of its neighbors.

One can only imagine what Frederic Bastiat would have made of things like robotics, AI, and machine learning. But I suspect the spirit of his advice would be the same: consider the unseen, and don’t destroy the jobs of the future in a misguided attempt to protect the jobs of today.

Posted November 2, 2018 by aurorawatcherak in economics, Uncategorized

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Roots of Government Interference   Leave a comment

Frédéric Bastiat was a contemporary with Alexis de Toqueville and they both came from France. Both were admirers of the United States who noted risks to that wonderful experiment in constitutional republicanism with democratic features. While Toqueville focused on the United States in the most familiar of his writing, Bastiat focused on France while touching on the United States system.  I find Bastiat’s writing to be prescient. He spoke to his own time and society, but he could have been addressing his comments to American circa 2017.

To read the entire series, here is the Table of Contents.

Image result for image of government interferenceThe socialists were in ascendancy in France in Bastiat’s day, which was the primary purpose he wrote this essay The Law. Bastiat hoped to convince his fellow citizens that socialism was a bad, bad mistake. He actually managed that for a while, until people stopped reading his essay and started listening to socialists again. Lela

We are therefore left to conjecture, in this case, upon
what foundation universal suffrage is claimed for them
with so much importunity.
The pretensions of organizers suggest another question,
which I have often asked them, and to which I am
not aware that I ever received an answer: Since the natural
tendencies of mankind are so bad that it is not safe to
allow them liberty, how comes it to pass that the tendencies
of organizers are always good? Do not the legislators
and their agents form a part of the human race? Do they
consider that they are composed of different materials
from the rest of mankind? They say that society, when left
to itself, rushes to inevitable destruction, because its
instincts are perverse. They presume to stop it in its downward
course, and to give it a better direction. They have,
therefore, received from heaven, intelligence and virtues
that place them beyond and above mankind: let them
show their title to this superiority. They would be our
shepherds, and we are to be their flock. This arrangement
presupposes in them a natural superiority, the right to
which we are fully justified in calling upon them to prove.
You must observe that I am not contending against
their right to invent social combinations, to propagate
them, to recommend them, and to try them upon themselves,
at their own expense and risk; but I do dispute
their right to impose them upon us through the medium
of the law, that is, by force and by public taxes.
I would not insist upon the Cabetists, the Fourierists,
the Proudhonians, the Academics, and the Protectionists
renouncing their own particular ideas; I would only have
them renounce the idea that is common to them all—viz., that of subjecting us by force to their own categories and
rankings to their social laboratories, to their ever-inflating
bank, to their Greco-Roman morality, and to their commercial
restrictions. I would ask them to allow us the faculty
of judging of their plans, and not to oblige us to
adopt them if we find that they hurt our interests or are
repugnant to our consciences.
To presume to have recourse to power and taxation,
besides being oppressive and unjust, implies further, the
pernicious assumption that the organized is infallible, and
mankind incompetent.
And if mankind is not competent to judge for itself,
why do they talk so much about universal suffrage?
This contradiction in ideas is unhappily to be found
also in facts; and whilst the French nation has preceded all
others in obtaining its rights, or rather its political claims,
this has by no means prevented it from being more governed,
and directed, and imposed upon, and fettered, and
cheated, than any other nation. It is also the one, of all
others, where revolutions are constantly to be dreaded,
and it is perfectly natural that it should be so.
So long as this idea is retained, which is admitted by
all our politicians, and so energetically expressed by Mr.
Louis Blanc in these words—“Society receives its impulse
from power,” so long as men consider themselves as capable
of feeling, yet passive—incapable of raising themselves
by their own discernment and by their own energy to any
morality, or well-being, and while they expect everything
from the law; in a word, while they admit that their relations
with the State are the same as those of the flock with
the shepherd, it is clear that the responsibility of power is
immense. Fortune and misfortune, wealth and destitution,
equality and inequality all proceed from it. It is charged with everything, it undertakes everything, it does everything;
therefore it has to answer for everything. If we are
happy, it has a right to claim our gratitude; but if we are
miserable, it alone must bear the blame. Are not our persons
and property in fact, at its disposal? Is not the law
omnipotent? In creating the educational monopoly, it has
undertaken to answer the expectations of fathers of families
who have been deprived of liberty; and if these
expectations are disappointed, whose fault is it?
In regulating industry, it has undertaken to make it
prosper, otherwise it would have been absurd to deprive
it of its liberty; and if it suffers, whose fault is it? In pretending
to adjust the balance of commerce by the game
of tariffs, it undertakes to make commerce prosper; and
if, so far from prospering, it is destroyed, whose fault is
it? In granting its protection to maritime armaments in
exchange for their liberty, it has undertaken to render
them self-sufficient; if they become burdensome, whose
fault is it?
Thus, there is not a grievance in the nation for which
the Government does not voluntarily make itself responsible.
Is it any wonder that every failure threatens to
cause a revolution? And what is the remedy proposed?
To extend indefinitely the dominion of the law, i.e., the
responsibility of Government. But if the Government
undertakes to raise and to regulate wages, and is not able
to do it; if it undertakes to assist all those who are in
want, and is not able to do it; if it undertakes to provide
work for every laborer, and is not able to do it; if it
undertakes to offer to all who wish to borrow, easy
credit, and is not able to do it; if, in words that we regret
should have escaped the pen of Mr. de Lamartine, “the
State considers that its mission is to enlighten, to develop, to enlarge, to strengthen, to spiritualize, and to
sanctify the soul of the people”—if it fails in this, is it
not obvious that after every disappointment, which,
alas! is more than probable, there will be a no less
inevitable revolution?

What Is Liberty   Leave a comment

Frédéric Bastiat was a contemporary with Alexis de Toqueville and they both came from France. Both were admirers of the United States who noted risks to that wonderful experiment in constitutional republicanism with democratic features. While Toqueville focused on the United States in the most familiar of his writing, Bastiat focused on France while touching on the United States system.  I find Bastiat’s writing to be prescient. He spoke to his own time and society, but he could have been addressing his comments to American circa 2017.

To read the entire series, here is the Table of Contents.

Image result for image of liberty cryingThe socialists were in ascendancy in France in Bastiat’s day, which was the primary purpose he wrote this essay The Law. Bastiat hoped to convince his fellow citizens that socialism was a bad, bad mistake. He actually managed that for a while, until people stopped reading his essay and started listening to socialists again. Lela

 

On the other hand, society is the human race. The human race, then, is to receive its impulse from Mr. Louis Blanc. It is at liberty to do so or not, it will be said. Of course
the human race is at liberty to take advice from anybody, whoever it may be. But this is not the way in which Mr. Louis Blanc understands the thing. He means that his project should be converted into law, and consequently forcibly imposed by power.

In our project, the State has only to give a legislation to labor, by means of which the industrial movement may and ought to be accomplished in all liberty. It (the State) merely places society on an incline (that is all) that it may descend, when once it is placed there, by the mere force of things, and by the natural course of the established mechanism.
But what is this incline? One indicated by Mr. Louis Blanc. Does it not lead to an abyss? No, it leads to happiness.

Why, then, does not society go there of itself? Because it does not know what it wants, and it requires an impulse. What is to give it this impulse? Power. And who is to give the impulse to power? The inventor of the machine, Mr. Louis Blanc.

We shall never get out of this circle—mankind passive, and a great man moving it by the intervention of the law. Once on this incline, will society enjoy something like liberty?
Without a doubt.

And what is liberty? Once for all: liberty consists not only in the right granted, but in the power given to man to exercise, to develop his faculties under the empire of justice, and under the protection of the law. And this is no vain distinction; there is a deep meaning
in it, and its consequences are imponderable. For when once it is admitted that man, to be truly free, must have the power to exercise and develop his faculties, it follows that every member of society has a claim upon it for such education as shall enable his faculties to display themselves, and for the tools of labor, without which human activity can find no scope. Now, by whose intervention is society to give to each of its members the requisite
education and the necessary tools of labor, unless by that of the State?

Thus, liberty is power. In what does this power consist? In possessing education and tools of labor. Who is to give education and tools of labor? Society, who owes them. By whose intervention is society to give tools of labor to those who do not possess them? By the intervention of the State. From whom is the State to obtain them?

It is for the reader to answer this question, and to notice whither all this tends.
One of the strangest phenomena of our time, and one that will probably be a matter of astonishment to our descendants, is the doctrine which is founded upon this triple hypothesis: the radical passiveness of mankind,— the omnipotence of the law,—the infallibility of the legislator:

this is the sacred symbol of the party that proclaims itself exclusively democratic. It is true that it professes also to be social. So far as it is democratic, it has an unlimited faith in
mankind. So far as it is social, it places mankind beneath the mud.

Are political rights under discussion? Is a legislator to be chosen? Oh, then the people possess science by instinct: they are gifted with an admirable discernment; their will is
always right; the general will cannot err. Suffrage cannot be too universal. Nobody is under any responsibility to society. The will and the capacity to choose well are taken
for granted. Can the people be mistaken? Are we not living in an age of enlightenment? What! Are the people to be forever led about by the nose? Have they not acquired their rights at the cost of effort and sacrifice? Have they not given sufficient proof of intelligence and wisdom? Are they not arrived at maturity? Are they not in a state to
judge for themselves? Do they not know their own interest?

Is there a man or a class who would dare to claim the right of putting himself in the place of the people, of deciding and of acting for them? No, no; the people would be free, and they shall be so. They wish to conduct their own affairs, and they shall do so. But when once the legislator is duly elected, then indeed the style of his speech alters. The nation is sent back into passiveness, inertness, nothingness, and the legislator takes possession of omnipotence. It is for him to invent, for him to direct, for him to impel, for him to organize. Mankind has nothing to do but to submit; the hour of despotism has struck. And we must observe that this is decisive; for the people, just before so enlightened, so moral, so perfect, have no inclinations at all, or, if they have any, these all lead them downwards towards degradation.

And yet they ought to have a little liberty! But are we not assured by Mr. Considerant that liberty leads fatally to monopoly? Are we not told that liberty is competition? and that competition, according to Mr. Louis Blanc, is a system of extermination for the people, and of ruination for trade? For that reason people are exterminated and ruined in proportion as they are free—take, for example, Switzerland, Holland, England, and the United States?

Does not Mr. Louis Blanc tell us again that competition leads to monopoly, and that, for the same reason, cheapness leads to exorbitant prices? That competition tends to drain the sources of consumption, and diverts production to a destructive activity? That competition forces production to increase, and consumption to decrease—whence it
follows that free people produce for the sake of not consuming; that there is nothing but oppression and madness among them; and that it is absolutely necessary for Mr.
Louis Blanc to see to it?

What sort of liberty should be allowed to men? Liberty of conscience?—But we should see them all profiting by the permission to become atheists. Liberty of education?—
But parents would be paying professors to teach their sons immorality and error; besides, if we are to believe Mr. Thiers, education, if left to the national liberty, would cease to be national, and we should be educating our children in the ideas of the Turks or Hindus,
instead of which, thanks to the legal despotism of the universities, they have the good fortune to be educated in the noble ideas of the Romans. Liberty of labor? But this is
only competition, whose effect is to leave all products unconsumed, to exterminate the people, and to ruin the tradesmen. The liberty of exchange? But it is well known that the protectionists have shown, over and over again, that a man will inevitably be ruined when he exchanges freely, and that to become rich it is necessary to exchange without liberty. Liberty of association? But according to the socialist doctrine, liberty and association exclude each other, for the liberty of men is attacked just to force them to associate.
You must see, then, that the socialist democrats cannot in conscience allow men any liberty, because, by their own nature, they tend in every instance to all kinds of regradation and demoralization.

Social Planners or Tyrants   1 comment

Frédéric Bastiat was a contemporary with Alexis de Toqueville and they both came from France. Both were admirers of the United States who noted risks to that wonderful experiment in constitutional republicanism with democratic features. While Toqueville focused on the United States in the most familiar of his writing, Bastiat focused on France while touching on the United States system.  I find Bastiat’s writing to be prescient. He spoke to his own time and society, but he could have been addressing his comments to American circa 2017.

To read the entire series, here is the Table of Contents.

The socialists were in ascendancy in France in Bastiat’s day, which was the primary purpose he wrote this essay The Law. Bastiat hoped to convince his fellow citizens that socialism was a bad, bad mistake. He actually managed that for a while, until people stopped reading his essay and started listening to socialists again. Lela

 

According to Bastiat, government social planner-types are convinced that ordinary human beings are incapable of making wise decisions for themselves, but there are some people — namely politicians:

[U]pon whom Heaven has bestowed opposite tendencies, not for their own sake only, but for the sake of the rest of the world. Whilst mankind tends to evil, they incline to good; whilst mankind is advancing towards darkness, they are aspiring to enlightenment; whilst mankind is drawn towards vice, they are attracted by virtue. And, this granted, they demand the assistance of force, by means of which they are to substitute their own tendencies for those of the human race.

To make his case, Bastiat provided a survey of literature, because it “is only needful to open, almost at random, a book on philosophy, politics, or history, to see how strongly this idea—the child of classical studies and the mother of socialism—is rooted in our country; that mankind is merely inert matter, receiving life, organization, morality, and wealth from power; or, rather, and still worse—that mankind itself tends towards degradation, and is only arrested in its tendency by the mysterious hand of the legislator.”

Bastiat started with a quotation by Jacques-Benigne Bousset – a French theologian of the previous generation who was court preacher of Louix XIV. He was a strong advocate for political absolutism and the divine right of kings and a vocal opponent of Protestantism.

One of the things which was the most strongly impressed (by whom?) upon the mind of the Egyptians, was the love of their country. . . . Nobody was allowed to be useless to the State; the law assigned to every one his employment, which descended from father to son. No one was permitted to have two professions, nor to adopt another. . . . But there was one occupation which was obliged to be common to all, this was the study of the laws and of wisdom; ignorance of religion and the political regulations of the country was excused in no condition of life. Moreover, every profession had a district assigned to it (by whom?). . . . Amongst good laws, one of the best things was, that everybody was taught to observe them (by whom?). Egypt abounded with wonderful inventions, and nothing was neglected which could render life comfortable and tranquil.

Bastiat objected to Bossuet’s assertion that men derive nothing from themselves, that all patriotism, wealth, innovation, husbandry, science, etc., flows from the king and the system of laws these people live under. Bossuet saw the same pattern among the Persians, by the way:

One of the first cares of the prince was to encourage agriculture. . . . As there were posts established for the regulation of the armies, so there were offices for the superintending of rural works. . . . The respect with which the Persians were inspired for royal authority was excessive. The Greeks, although full of mind, were no less strangers to their own responsibilities; so much so, that of themselves, like dogs and horses, they would not have  ventured upon the most simple games. In a classical sense, it is an undisputed thing that everything comes to the people from without. 

The Greeks, naturally full of spirit and courage, had been early cultivated by kings and colonies who had come from Egypt. From them they had learned the exercises of the body, foot races, and horse and chariot races. . . . The best thing that the Egyptians had taught them was to become docile, and to allow themselves to be formed by the laws for the public good. 

Francois Fenelon was a student of Bussuet’s who disagreed strongly with him over the love of God, but Bastiat found that they agreed on this subject of the wise ruling class needing to guide the poor dumb brutes that composed the majority of society. Reared in the study and admiration of antiquity and a witness of the power of Louis XIV, Fenelon adopted the idea that mankind should be passive, recognizing that its misfortunes and prosperities, virtues and vices, are caused by the external influence that is exercised upon it by the law or the law’s makers. In Utopia of Salentum, he brings ordinary people, with their interests, their faculties, their desires, and their possessions, under the absolute direction of the legislator:

Whatever the subject may be, they themselves have no voice in it—the prince judges for them. The nation is just a shapeless mass, of which the prince is the soul. In him resides the thought, the foresight, the principle of all organization, of all progress; on him, therefore, rests all the responsibility.

Bastiat referred his readers to Fenelon’s The Adventures of Telemachus, particularly the 10th book of the series. He quoted from it at random to show Fenelon’s all-consuming belief that human beings cannot manage their own lives without the ruling class telling them how to do it:

We could not turn our eyes to the two shores, without perceiving rich towns and country seats, agreeably situated; fields that were covered every year, without intermission, with golden crops; meadows full of flocks; laborers bending under the weight of fruits that the earth lavished on its cultivators; and shepherds who made the echoes around repeat the  soft sounds of their pipes and flutes. “Happy,” said Mentor, “is that people who is governed by a wise king.”. . . Mentor afterwards desired me to remark the happiness and abundance that was spread over all the country of Egypt, where twenty-two thousand
cities might be counted. He admired the excellent police regulations of the cities; the justice administered in favor of the poor against the rich; the good education of the children, who were accustomed to obedience, labor, and the love of arts and letters; the exactness with which all the ceremonies of religion were performed; the disinterestedness, the desire of honor, the fidelity to men, and the fear of the gods, with which every father inspired his children. He could not sufficiently admire the prosperous state of the country. “Happy” said he, “is the people whom a wise king rules in such a manner.

Fénelon’s idyll on Crete is still more fascinating. Mentor is made to say:

All that you will see in this wonderful island is the result of the laws of Minos. The education that the children receive renders the body healthy and robust. They are accustomed, from the first, to a frugal and laborious life; it is supposed that all the
pleasures of sense enervate the body and the mind; no other pleasure is presented to them but that of being invincible by virtue, that of acquiring much glory . . . there they punish three vices that go unpunished amongst other people—ingratitude, dissimulation, and avarice. As to pomp and dissipation, there is no need to punish these, for they are
unknown in Crete. . . . No costly furniture, no magnificent clothing, no delicious feasts, no gilded palaces are allowed.

Mentor’s purpose is to prepare his scholar to mold and manipulate the people of Ithaca, for their own good, no doubt, even if it is against their will.

So we receive our first political notions. We are taught to treat men very much as farmers treat soil or potters clay.

Charles-Louis de Montesquieu was a French lawyer, scholar and political philosopher who lived in the Age of Englightment. We get separation of powers from him. We also get our modern notion of class from him as he divided French society into three — the monarchy, the aristocracy and the commons. Bastiat may have met him as they both lived in Paris at the same time. Despite his strong influence on our Founders, Montesquieu also believed in the ruling class telling the commons what to do in pretty much every instance.

To sustain the spirit of commerce, it is necessary that all the laws should favor it; that these same laws, by their regulations in dividing the fortunes in proportion as commerce enlarges them, should place every poor citizen in sufficiently easy circumstances to enable him to work like the others, and every rich citizen in such mediocrity that he must work, in order to retain or to acquire. 

Bastiat rightly recognized that this would eliminate all fortunes. Yes, in a democracy, the State should support “real equality”, but that is very difficult to measure. Montesquieu would see massive redistribution of wealth … equalization by force of the law.

There were, in Greece, two kinds of republics. One was military, as Sparta; the other commercial, as Athens. In the one it was wished (by whom?) that the citizens should be idle: in the other, the love of labor was encouraged. It is worth our while to pay a little attention to the extent of genius required by these legislators, that we may see how, by confounding all the virtues, they showed their wisdom to the world.

Lycurgus, blending theft with the spirit of justice, the hardest slavery with extreme liberty, the most atrocious sentiments with the greatest moderation, gave stability to his city. He seemed to deprive it of all its resources, arts, commerce, money, and walls; there was ambition without the hope of rising; there were natural sentiments where the individual was neither child, nor husband, nor father. Chastity even was deprived of modesty. By this road Sparta was led on to grandeur and to glory.

The phenomenon that we observe in the institutions of Greece has been seen in the midst of the degeneracy and corruption of our modern times. An honest legislator has formed a people where probity has appeared as natural as bravery among the Spartans. Mr. Penn is a true Lycurgus, and although the former had peace for his object, and the latter war, they resemble each other in the singular path along which they have led their people, in their influence over free men, in the prejudices which they have overcome, the passions they have subdued.

America’s founders admired Rouseau, but it’s important to remember that that his philosophies ignited the French Revolution. Although Rousseau’s philosophy held strong authority with the democrats, Bastiat thought him a strong advocate for “the entire passiveness of human nature: in the presence of the lawgiver:

If it is true that a great prince is a rare thing, how much more so must a great lawgiver be? The former has only to follow the pattern proposed to him by the latter. This latter is the engineer who invents the machine; the former is merely the workman who sets it in motion.

And what part have men to act in all this? That of the machine, which is set in motion; or rather, are they not the brute matter of which the machine is made? Thus, between the legislator and the prince, between the prince and his subjects, there are the same relations as those that exist between the agricultural writer and the agriculturist, the agriculturist and the clod. At what a vast height, then, is the politician placed, who rules over legislators themselves and teaches them their trade in such imperative terms as the following:

Would you give consistency to the State? Bring the extremes together as much as possible. Suffer neither wealthy persons nor beggars.

If the soil is poor and barren, or the country too much confined for the inhabitants, turn to industry and the arts, whose productions you will exchange for the provisions which you require. . . . On a good soil, if you are short of inhabitants, give all your attention to agriculture, which multiplies men, and banish the arts, which only serve to depopulate the country. . . . Pay attention to extensive and convenient coasts. Cover the sea with vessels, and you will have a brilliant and short existence. If your seas wash only inaccessible rocks, let the people be barbarous, and eat fish; they will live more quietly, perhaps better, and most certainly more happily. In short, besides those maxims which are common to all, every people has its own particular circumstances, which demand a legislation peculiar to itself. 

 

Bastiat found it interesting that Rousseau though the government should reflect the needs of the nation, but didn’t reaction that the nation could reflect its own needs without help from the government.

Why does he not allow that by obeying their own impulse, men would of themselves apply agriculture to a fertile district, and commerce to extensive and commodious coasts without the interference of a Lycurgus, a Solon, or a Rousseau, who would undertake it at the risk of deceiving themselves?

Be that as it may, we see with what a terrible responsibility Rousseau invests inventors, institutors, conductors, and manipulators of societies. He is, therefore, very exacting with regard to them.

Bastiat might well have said to Barack Obama that daring to undertake the fundamental transformation of the American nation requires manipulating every individual, denying him his right to live his life as he chooses. “He must feel that he can change the constitution of man, to fortify it, and substitute a social and moral existence for the physical and independent one that we have all received from nature. In a word, he must
deprive man of his own powers, to give him others that are foreign to him.”

Where is the dignity in that?

Bastiat continued his survey with a quote by Guillaume Thomas Raynal, a French writer and scholar during the Enlightment;

The climate, that is, the air and the soil, is the first element for the legislator. His resources prescribe to him his duties. First, he must consult his local position. A population dwelling upon maritime shores must have laws fitted for navigation. . . . If the colony is located in an inland region, a legislator must provide for the nature of the soil, and for its degree of fertility. . . . It is more especially in the distribution of property that the wisdom of legislation will appear. As a general rule, and in every country, when a new
colony is founded, land should be given to each man, sufficient for the support of his family. . . . In an uncultivated island, which you are colonizing with children, it will only be needful to let the germs of truth expand in the developments of reason!

. . . But when you establish old people in a new country, the skill consists in only allowing it those injurious opinions and customs which it is impossible to cure and correct. If you wish to prevent them from being perpetuated, you will act upon the rising generation by a general and public education of the children. A prince or legislator ought never to found a colony without previously sending wise men there to instruct the youth…. In a new colony, every facility is open to the precautions of the legislator who desires to purify the tone and the manners of the people. If he has genius and virtue, the lands and the men that are at his disposal will inspire his soul with a plan of society that a writer can only vaguely trace, and in a way that would be subject to the instability of all hypotheses, which are varied and complicated by an infinity of circumstances too difficult to foresee and to combine.

Bastiat noted that Raynal wrote as if he were a professor of agriculture telling his pupils how best to amend the soil. But the soil that he is discussing happen to be people, “your equals, intelligent and free beings like yourselves, who have received from God, as you have, the faculty of seeing, of foreseeing, of thinking, and of judging for themselves!”

Bastiat continued by quoting Gabriel Bonnot de Mably, a French philosopher and historian of the 18th century.

Mably was writing that the laws can become obsolete and sometimes neglect security, so:

Under these circumstances, we must be convinced that the bonds of Government are slack. Give them a new tension (it is the reader who is addressed), and the evil will be remedied. . . . Think less of punishing the faults than of encouraging the virtues that you want. By this method you will bestow upon your republic the vigor of youth.

Through ignorance of this, a free people has lost its liberty! But if the evil has made so much way that the ordinary magistrates are unable to remedy it effectually, have recourse to an extraordinary magistracy, whose time should be short, and its power considerable. The imagination of the citizens requires to be impressed.

In other words, treat your subjects like children until they rebel and then come down on them hard. “There was a time when, under the influence of teaching like this, which is the foundation of classical education, everyone was for placing himself beyond and above
mankind, for the sake of arranging, organizing, and instituting it in his own way.”

Bastiat wasn’t done yet with showing his readers what their leaders had been learning. He quoted Etienne Bonnot de Condillac, a French epistemologist who studies psychology:

Take upon yourself, my lord, the character of Lycurgus or of Solon. Before you finish reading this essay, amuse yourself with giving laws to some wild people in America or in Africa. Establish these roving men in fixed dwellings; teach them to keep flocks. . . . Endeavor to develop the social qualities that nature has implanted in them. . . . Make them begin to practice the duties of humanity. . . . Cause the pleasures of the passions to become distasteful to them by punishments, and you will see these barbarians, with every plan of your legislation, lose a vice and gain a virtue.

All these people have had laws. But few among them have been happy. Why is this? Because legislators have almost always been ignorant of the object of society, which is to unite families by a common interest. Impartiality in law consists in two things, in establishing equality in the fortunes and in the dignity of the citizens. . . . In proportion to the degree of equality established by the laws, the dearer will they become to every citizen. How can avarice, ambition, dissipation, idleness, sloth, envy, hatred, or jealousy agitate men who are equal in fortune and dignity, and to whom the laws leave no hope of disturbing their equality? What has been told you of the republic of Sparta ought to enlighten you on this question. No other State has had laws more in accordance with the order of nature or of equality.

Bastiat thought we shouldn’t be surprised that 17th and 18th century thinkers thought of people as inert matter, ready to receive everything down to the thoughts we think from a great prince, or legislator, or genius. They had been educated bo believe that few men in history had molded mankind according to their fancy, enslaved by the force of the law.

And what does this prove? That because men and society are improvable, error, ignorance, despotism, slavery, and superstition must be more prevalent in early times. The mistake of the writers quoted above is not that they have asserted this fact, but that they have proposed it as a rule for the admiration and imitation of future generations. Their mistake has been, with an inconceivable absence of discernment, and upon the faith of a puerile conventionalism, that they have admitted what is inadmissible, viz., the grandeur, dignity, morality, and well-being of the artificial societies of the ancient world; they have not understood that time produces and spreads enlightenment; and that in proportion to the increase of enlightenment, right ceases to be upheld by force, and society regains possession of herself.

Bastiat believed in the instinctive effort of people toward liberty. “[W]hat is liberty, whose name can make every heart beat, and which can agitate the world, but the union of all liberties, the liberty of conscience, of education, of association, of the press, of movement, of labor, and of exchange; in other words, the free exercise, for all, of all the inoffensive faculties; and again, in other words, the destruction of all despotisms, even of legal despotism, and the reduction of law to its only rational sphere, which is to regulate the individual right of legitimate defense, or to repress injustice?”

While liberty is the tendencu of the human race, it can be thwarted by education that insists politicians must place themselves above mankind to arrange, organize and regulate it based on what they think is best.

For whilst society is struggling to realize liberty, the great men who place themselves at its head, imbued with the principles of the seventeenth and eighteenth centuries, think only of subjecting it to the philanthropic despotism of their social inventions, and making it bear with docility, according to the expression of Rousseau, the yoke of public felicity as pictured in their own imaginations.

 

Mud in Manipulative Hands   1 comment

Frédéric Bastiat was a contemporary with Alexis de Toqueville and they both came from France. Both were admirers of the United States who noted risks to that wonderful experiment in constitutional republicanism with democratic features. While Toqueville focused on the United States in the most familiar of his writing, Bastiat focused on France while touching on the United States system.  I find Bastiat’s writing to be prescient. He spoke to his own time and society, but he could have been addressing his comments to American circa 2017.

To read the entire series, here is the Table of Contents.

The socialists were in ascendancy in France in Bastiat’s day, which was the primary purpose he wrote this essay The Law. Bastiat hoped to convince his fellow citizens that socialism was a bad, bad mistake. He actually managed that for a while, until people stopped reading his essay and started listening to socialists again. Lela

 

Related imageSocialists, Bastiat said, are engaged in legal plunder, but they disguise it cleverly “under the seductive names of fraternity, solidarity, organization, association.”

We only ask the law to deliver justice, but the socialists alleged Bastiat and his fellow thinkers were rejecting “fraternity, solidarity, organization, and association; and they brand us with the name of individualists.”

Then as now, people who think like Bastiat insist that we are not repudiating natural organization, but forced organization that does not permit free association. Imposed association “is not spontaneous fraternity, but legal fraternity. It is not providential solidarity, but artificial solidarity, which is only an unjust displacement of responsibility.”

Socialism deliberately mixes up government and society, so:

every time we object to a thing being done by Government, it concludes that we object to its being done at all. We disapprove of education by the State—then we are against education altogether. We object to a State religion—then we would have no religion at all. We object to an equality which is brought about by the State then we are against equality, etc., etc. They might as well accuse us of wishing men not to eat, because we object to the cultivation of corn by the State.

Related imageThe law cannot produce prosperity as represented by wealth, science, religion and a host of other positives. The law can only provide justice and that so long as it isn’t perverted.  So how did this strange notion that the law can provide prosperity or anything other than justice come into the political realm? “The modern politicians, particularly those of the Socialist school, found their different theories upon one common hypothesis; and surely a more strange, a more presumptuous notion, could never have entered a human brain.”

They divide mankind into two parts. The people form one part and the politician (individually or collectively) form the other part and this second part is “by far the most important.” Politicians begin by supposing that people are devoid of any principle of action or means of discernment in themselves. The politician believes that people have no initiative, as if they were:

at best a vegetation indifferent to its own mode of existence, susceptible of assuming, from an exterior will and hand an infinite number of forms, more or less symmetrical, artistic, and perfected.

Politicians almost invariably believe they have a mission to organize society based upon their own higher understanding of society’s needs and they do not hesitate to impose their will upon people to accomplish their purposes.

Bastiat asked us to imagine a gardener who sculpts his trees into various shapes and sizes using tools for that purpose. The politician uses the law to sculpt society into his capricious vision. So there is the law of tariffs, the law of taxation, the law of assistance and the law of education:

[T]he Socialists look upon mankind as a subject for social experiments, that if, by chance, they are not quite certain of the success of these experiments, they will request a portion of mankind, as a subject to experiment upon. It is well known how popular the idea of trying all systems is, and one of their chiefs has been known seriously to demand of the Constituent Assembly a parish, with all its inhabitants, upon which to make his experiments.

An inventor makes a prototype before he puts out what he plans to sell. A chemist wastes some material in proving an experiment. A farmer might use a corner of his field as a trial for an idea.While these experiments in social design seem like a good idea, we forget that the gardener, the inventor, the chemist and the farmer are experimenting on inanimate objects that have no life of their own. The Socialist honestly views mankind in a similar fashion. We aren’t doing anything with our lives, so we should allow the Socialist to make us better.

No wonder the politicians of the nineteenth century look upon society as an artificial production of the legislator’s genius. This idea, the result of a classical education, has taken possession of all the thinkers and great writers of our country.

To the central government planner, ordinary citizens are mere mud in manipulative hands. They’re doing it for our good, so why do we object? If they even recognize that ordinary people can act in their own best interest of their own accord, they reject that we have a right to make these decisions for ourselves:

“They have taken it for granted that if abandoned to their own inclinations, men would only occupy themselves with religion to arrive at atheism, with instruction to come to ignorance, and with labor and exchange to be extinguished in misery.”

Remember, Bastiat was writing in the 1840s, but doesn’t what he says politicians of his day though sound eerily like some of the things Barack Obama and his administration said over the last eight years? Don’t we hear this echoed from PBS news anchors every night?

There is an omnipresent belief among politicians (and it doesn’t matter which party) and government planners that ordinary citizens can’t possibly know what is good for us … we are mud, in their opinion, in need of their pottery skills.

Law is Force   2 comments

Frédéric Bastiat was a contemporary with Alexis de Toqueville and they both came from France. Both were admirers of the United States who noted risks to that wonderful experiment in constitutional republicanism with democratic features. While Toqueville focused on the United States in the most familiar of his writing, Bastiat focused on France while touching on the United States system.  I find Bastiat’s writing to be prescient. He spoke to his own time and society, but he could have been addressing his comments to American circa 2017.

To read the entire series, here is the Table of Contents.

 

Remembering that Bastiat defined plunder as anytime property is transferred from the person who produced it to one who has not earned it against the will of the producer.

 

With this understanding, let us examine the value, the origin, and the tendency of this popular aspiration, which pretends to realize the general good by general plunder.

 

Bastiat heard the socialists say that the law organizes justice, so it made sense to them that it should organize labor, education, and religion. Unfortunately, the law can’t organization labor, education and religion without disorganizing justice.

Law is force, and … the domain of the law cannot properly extend beyond the domain of force.

When the law’s force keeps people within the bounds of justice, nothing is imposed upon the individual beyond an obligation to abstain from doing harm. The law is not violating a man’s personality, liberty or property when it holds him to justice, which guards the personality, liberty and property of others. The law defends the equal right of all.

The aim of the law is to prevent injustice from reigning.

Injustice results from the absence of justice. When the law uses its force to impose a form of labor, a method or subject of education, a creed, or worship, it is no longer negative. It has acted positively upon people. It has substituted the will of the legislator for the will of the individual. The individual no longer as to think for himself. The law does that for him.

They cease to be men; they lose their personality, their liberty, their property.

  • How is any form of labor imposed by force not a violation of liberty?
  • How is any transmission of wealth by force not a violation of property?

Image result for image of government as forceThe law cannot organize labor and industry without organizing injustice. When a politician views inequality from his ivory tower, he mourns the sufferings of so many people, comparing their state to that of the rich and comfortable. He wants to remedy that sorry condition. Maybe he should look at history and ask if that social state has not been caused by plunder in ancient times when conquest was everywhere or, conversely, by plunder in more recent times, embodied by taxes levied by government.

The politician’s mind turns toward combinations, arrangements, legal or organizations. Instead of allowing justice to work, he tries to fix the problem by increasing the very thing that produced the evil of inequality in the first place. Rather than impose mere limits on oppressive behavior, he seeks instead to plunder some for the advantage of others.

But wait – there are people who have no money. Shouldn’t they be able to apply to the law for relief? But the government has no resources of its own. It must obtain whatever it has from society.

Nothing can enter the public treasury, in favor of one citizen or one class, but what other citizens and other classes have been forced to send to it.

If everyone were to draw from the public storehouse only what he as contributed, then the law wouldn’t be a plunderer, but that doesn’t help the guy with no money, so this law doesn’t promote equality. It is an instrument of equalization (only so) far as it takes from one party to give to another, and then it is an instrument of plunder.

France had tariffs and subsides in the 1840s, and all sorts of other economic “rights. At the bottom of all this legal plunder, Bastiat saw an organized injustice.

But, people need to be educated, so we apply to the law. But the law has no enlightenment of itself. It extends over a society where there are men who have knowledge, and others who have not; citizens who want to learn, and others who are disposed to teach.

It can only do one of two things:

  • allow a free operation to this kind of transaction
  • else preempt the will of the people in the matter, and take from some of them sufficient to pay professors commissioned to instruct others for free.

The second suggestion would be a violation of liberty and property – legal plunder.

But, there are people wanting in morality or religion and those concerned about this apply to the law; but law is force, and it is foolishness to introduce force into matters of labor, education and faith.

 

Shades of Plunder?   1 comment

Frédéric Bastiat was a contemporary with Alexis de Toqueville and they both came from France. Both were admirers of the United States who noted risks to that wonderful experiment in constitutional republicanism with democratic features. While Toqueville focused on the United States in the most familiar of his writing, Bastiat focused on France while touching on the United States system.  I find Bastiat’s writing to be prescient. He spoke to his own time and society, but he could have been addressing his comments to American circa 2017.

To read the entire series, here is the Table of Contents.

Bastiat believed that there were only three possible ways for a society to use the law.

  • When the few plunder the many. (Partial Plunder)
  • When everybody plunders everybody else. (Universal Plunder)
  • When nobody plunders anybody. (Absence of Plunder)

Recognizing that people might not have considered these subjects, Bastiat examined these shades of plunder.

Partial plunder. This is the system that prevailed so long as the elective privilege was partial; a system that is resorted to, to avoid the invasion of socialism.

Image result for image of shades of plunderUniversal plunder. We have been threatened by this system when the elective privilege has become universal; the masses having conceived the idea of making law, on the principle of legislators who had preceded them.

Absence of plunder. This is the principle of justice, peace, order, stability, conciliation, and of good sense, which I shall proclaim with all the force of my lungs (which is very inadequate, alas!) till the day of my death.

And, in all sincerity, can anything more be required at the hands of the law? Can the law, whose necessary sanction is force, be reasonably employed upon anything beyond securing to every one his right? I defy anyone to remove it from this circle without perverting it, and consequently turning force against right. And as this is the most fatal, the most illogical social perversion that can possibly be imagined, it must be admitted that the true solution, so much sought after, of the social problem, is contained in these simple words—LAW IS ORGANIZED JUSTICE.

Now it is important to remark, that to organize justice by law, that is to say by force, excludes the idea of organizing by law, or by force any manifestation whatever of human activity—labor, charity, agriculture, commerce, industry, instruction, the fine arts, or religion; for any one of these organizings would inevitably destroy the essential organization. How, in fact, can we imagine force encroaching upon the liberty of citizens without infringing upon justice, and so acting against its proper aim?

Here I am taking on the most popular prejudice of our time. It is not considered enough that law should be just, it must be philanthropic. It is not sufficient that it should
guarantee to every citizen the free and inoffensive exercise of his faculties, applied to his physical, intellectual, and moral development; it is required to extend well-being,
instruction, and morality, directly over the nation. This is the fascinating side of socialism.
But, I repeat it, these two missions of the law contradict each other. We have to choose between them. A citizen cannot at the same time be free and not free. Mr. de
Lamartine wrote to me one day thus: “Your doctrine is only the half of my program; you have stopped at liberty, I go on to fraternity.” I answered him: “The second part
of your program will destroy the first.” And in fact it is impossible for me to separate the word fraternity from the word voluntary. I cannot possibly conceive fraternity legally enforced, without liberty being legally destroyed, and justice legally trampled under foot. Legal plunder has two roots: one of them, as we have already seen, is in human greed; the other is in misconceived philanthropy.

 

Jacquie Biggar-USA Today Best-selling author

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