The Genius of Frederic Bastiat

[David Atlee]

From my blog at http://theatleeappeal.com/

If you have never heard of Frederic Bastiat, you need get some reading done. Frederic Bastiat was a 19th century French economist and promoter of free political systems. He wrote numerous books including ‘The Law’ and ‘What is Seen and What is Not Seen’. I was fortunate enough to have first read ‘What is Seen’ as a junior in high school as required reading from my American History teacher. I am going to highlight some of Bastiat’s key points and compare his points to our current state. Given the current state of our country, Bastiat’s teachings have never been so relevant.

The first quote taken from ‘What is Seen’ is in reference to Bastiat’s position on subsidizing. Even back in the 19th century, France was subsidizing the arts as a means to promote art. America has also been subsidizing art through the National Endowment of the Arts (which also received $50 Million in stimulus funds according to the New York Times).

“Our adversaries believe that an activity that is neither subsidized nor regulated is abolished. We believe the contrary. Their faith is in the legislator, not in mankind. Ours is in mankind, not in the legislator.”

We find this to be self evident. Take the rhetoric of David Obey, a Democratic congressman from Wisconsin:

“You know what? There are five million people who work in the arts industry. And right now they have 12.5 percent unemployment — or are you suggesting that somehow if you work in that field, it isn’t real when you lose your job, your mortgage or your health insurance? We’re trying to treat people who work in the arts the same way as anybody else.”

Now take a look back at what Bastiat said and compare it to what David Obey said. Obey has made it abundantly clear that in his mind, those who work in the arts industry will not survive without government help. If the state does not subsidize their losses, we may lose the arts completely. Bastiat’s view? If there was a demand for their art, there would be no need for taxpayer subsidies. You can also apply this same logic to Obama’s attempt to “keep people in their homes.” In Obama’s mind, if the government does not use taxpayer dollars to subsidize troubled homeowners, then these people will lose their homes. This is wreck-less thinking because it promotes wreck-less behavior. If one knows that he will be subsidized for purchasing a house beyond his means, what incentive does he have not to buy it? Obama’s faith is in the legislature to promote fairness, our faith is in the individual to make reasonable decisions. The consequences of their decision are theirs to deal with.

Let’s take a look at another quote from Bastiat:

“When it is a question of taxes, gentlemen, prove their usefulness by reasons with some foundation, but not with that lamentable assertion: “Public spending keeps the working class alive.” It makes the mistake of covering up a fact that it is essential to know: namely, that public spending is always a substitute for private spending, and that consequently it may well support one worker in place of another but adds nothing to the lot of the working class taken as a whole. Your argument is fashionable, but it is quite absurd, for the reasoning is not correct.”

Case in point, the $1 Trillion stimulus bill. The reasoning behind it’s passage was if government did not spend this money, the “working class” would not survive, and we would go into a depression. Conservatives have been screaming Bastiat’s reasoning on this, and American’s are beginning to catch on. Governments do not create. They can only take in the form of taxes and redistribute. Who knows what the private sector could have done with $1 Trillion of its own money. We do know this much to be true, the private sector is much smarter with their money because unlike the government, they cannot print more money or infinitely borrow.

Bastiat also took an extensive look into what he describes as “plunder”. This is a famous quote from Bastiat: “When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that justifies it.” Remember the term that liberals and Democrats love to use when justifying the heavy taxation of the rich and redistribution to the poor: Fairness. Now, what does Bastiat have to say about this?

“The prevailing illusion of our age is that it is possible to enrich all classes at the expense of one another—to make plunder universal under the pretext of organizing it. Now, legal plunder can be committed in an infinite number of ways; hence, there are an infinite number of plans for organizing it: tariffs, protection, bonuses, subsidies, incentives, the progressive income tax, free education, the right to employment, the right to profit, the right to wages, the right to relief, the right to the tools of production, interest-free credit, etc., etc. And it is the aggregate of all these plans, in respect to what they have in common, legal plunder, that goes under the name ofsocialism.”

Do any of Bastiat’s described sources of plunder ring a bell to you? Progressive income tax? Free education? The right to wages and employment? Remember what Obama’s Labor Chief said earlier this year, “Every American has a right to be paid fairly, whether documented or not.” Remember the chant from Washington over the last 20 years about the American dream and Americans should “have the right to own their own home”? Well if people can’t afford a home, how will they get one? Sub-prime loans guaranteed through Fannie Mae and Freddie Mac! Don’t forget the Community Reinvestment Act which forced banks to loan to people with bad credit.

I could go on and on dissecting parts of this amazing piece of literature, and how each part plays into our current predicament. If the Republicans want a landslide this November, every Republican running for office should read the works of Frederic Bastiat. This was a man who championed capitalism and freedom while living in 19th century France. According to Gallup, Americans who identify themselves as conservative outnumber those who identify themselves as liberal 2 to 1. The teachings of Bastiat coincide with these Americans. It is time Republicans hammer these ideals home and awaken the sleeping giant that is the American dream.