Happy Birthday, Bastiat!

Happy Birthday, Bastiat! By J. Bradley Jansen June 29, 2001 On June 29th, as we celebrate Claude Frederic Bastiat's 200th birthday, we are also celebrating economic common sense. Perhaps more than any other economic commentator, Frederic Bastiat was able to reduce economic sophisms to their basic principles and follow them to their logical conclusions. This approach was very effective in educating people of the ill-effects of various proposals. We need more Bastiats today. Born at Bayonne, France, Bastiat was orphaned at age nine and raised by his grandfather and his aunt. He studied languages, literature and music, and lived through a revolutionary time. He was 14 when Napoleon was defeated at Waterloo and then exiled. At 17, Bastiat began to work for his uncle then, at age 19, Bastiat also continued his studies by turning his interests to political economy with the writings of Adam Smith and Jean-Baptiste Say. Bastiat survived the Revolution of 1830 and became involved in local politics the following year. Bastiat rose to prominence in 1844 with the publication of an article on tariffs and trade. Although he died just six years later, Bastiat became a vocal and eloquent critic of protectionism. One of his most famous works was his petition of the candle makers and others to the members of the Chamber of Deputies (). In that fictional petition, the makers of candles and related industries were lobbying the legislature for trade protection from an unfair foreign competitor who was hurting their business, costing French jobs. The petition read in part, "We are suffering from the ruinous competition of a foreign rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price: for the moment that he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation." That foreign rival wreaking havoc on the domestic market was none other than the sun. The petitioners were asking for a law requiring the closing of all shutters, skylights and other openings permitting the light of the unfair foreign competition. As Bastiat explained, "The sort of dependence that results from exchange, i.e., from commercial transactions, is a reciprocal dependence. We cannot be dependent upon a foreigner without his being dependent on us. Now, this is what constitutes the very essence of society. To sever natural interrelations is not to make oneself independent, but to isolate oneself completely." His insight into the benefits of free trade still offers us a valuable lesson. Another important essay of his was the essay, "What is Seen and What is Not Seen" which explained that consumers and citizens should not be duped into only looking at the ostensible benefits of government action and should consider the hidden costs as well. In his "The Broken Window" essay, he exposes the fallacy that forced redistribution has a net benefit effect for society as a whole. In fact some gain at others' expense, but the net effect is often negative for everyone. Bastiat gave us a wealth of insightful quotations also (some are available at
Unfortunately, one place where his economic insights did not last seems to be Paris. There, the Organization for Economic Cooperation and Development and the Financial Action Task Force are in the process of making a mockery of the Rule of Law. Their bureaucrats are not directly accountable to people of the countries they claim to represent, but they claim to represent themselves as policy-making bodies. Even worse, the OECD and FATF bureaucrats are not only trying to make policies for their own member countries. They are also trying to dictate the policies for countries that are not members of the OECD or FATF and have no say in determining the rules of the game. Both the approach and policies of the OECD and FATF regarding tax competition, financial privacy and sovereignty turn the ideal of the Rule of Law on its head. In one of his most famous essays, "The Law," Bastiat argues that government coercion is only legitimate if it serves "to guarantee security of person, liberty, and property rights, to cause justice to reign over all." We would all be well served if our leaders heeded his advice. Happy Birthday, Frederic Bastiat. J. Bradley Jansen is the Deputy Director for the Free Congress Foundation's Center for Center for Technology Policy.