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Two Champions Of Liberty

Frederic Bastiat

The ideas of Frederic Bastiat have great relevance in modern day India where it is widely believed that “There is no better investment than taxes.” There is no better argument against the claim that trade will gain by Government spending on events like Commonwealth Games than Bastiat’s six word retort that “a thief would do the same”. Reading Bastiat will help us see that employment generated by public work projects like NREGA “hides a great deal of prevented labor, which is not seen”. Nothing summarizes the attitude behind seeing profit in such destructive policies than his question: “What would become of the glaziers, if nobody ever broke windows?” Protectionist fallacies in his days are as prevalent now, not just in India, but in all parts of the world. Attempts to extend wealth by extension of credit have resulted in double digit inflation for a considerable period of time. The roots of the fallacy behind confusing cash with products and paper money with cash were obvious to Bastiat.

I personally feel grateful to have come across Bastiat’s petition of the candle makers early in my life. He was the first proper Economist I had read. He held views strikingly similar to that of my favorite novelist-philosopher, Ayn Rand. Both made no theoretical original contribution to their respective fields, but arguably have advanced the cause of liberty more than almost everyone else. They spoke obvious truths which were habitually ignored. Few were as good at reductio ad absurdum as Rand and Bastiat. Both are looked down upon by the academia for lacking theoretical depth, writing intelligently, and characteristics which amounted to “lack of scholarly virtues” and “incompetence” in the eyes of the establishment. Despite the truckloads of avoidable mistakes both have made, they have shown us how much is possible without compromising intellectual rigor or pandering to men’s innate predispositions which are so inimical to the spirit of liberty. It is hard not to see the exceptional talent which roars through their works.

Ayn Rand

Bastiat, like Rand clearly saw the error of anti-capitalists who abhorred doctrines, systems and principles and ridiculed their “practice without theory and without principle.” They were united against the absurd claim that theory and practice stood opposed to each other. Both rejected pragmatism and understood where irrational skepticism and moral relativism will lead us to. Everything is “a point of view”, they knew, is a notion in which only fools and liars believe in, as it is a rationalization of the unjustifiable attitude that anything goes as long as one can get away with it! Men, both held, can’t survive by adopting a strategy of living on the range of the moment. Bastiat knew that economic science in itself can’t pronounce value judgments, but didn’t hesitate in seeing robbery for what it is, unlike later economists like Mises who were tied down by their rejection of moral absolutism. They found agreement in the conclusion that if morality was pitted against the self interest of a person, he will be forced to give up his moral sense. Bastiat went beyond to say that man will lose his moral sense or respect for law if one stood against the other. Rightful interests of men, they knew, won’t ever clash. The absurdity in imposing morality through force was something Rand and Bastiat stated in strikingly similar words. Rand, like Bastiat, scorned Government officials as exacting parasites. “Naked greed and misconceived philanthropy”, it is true, is the root of all social evils. When Bastiat asked “If mankind is not competent to judge for itself, why do they talk so much about universal suffrage?”, Rand thundered, according to the tribal notion, “You’re incompetent to run your own life, but competent to run the lives of others”. They had the same answer to the welfare state: “At whose expense?”

Ayn Rand considered the United States as the noblest country in the history of mankind based on rational self interest, the right to the pursuit of happiness, and limited Government. She asked her readers to look at the results and honestly look into their own conscience. Bastiat observed that United States was one country in the world where law was kept in a realm which he considered appropriate and there is no place on earth where so much social order exists. In the eyes of both the thinkers, slavery which persisted in the United States much into the nineteenth century was in complete contradiction with the principles on which the country was based.  Bastiat was the first to point out the notion that that liberty and competition leads to monopoly is a glaringly obvious fallacy, a position which Rand shared.

Their views on self interest were ridden with inconsistencies, but what they got right is far less appreciated by free market thinkers even today. Bastiat, unlike Rand held the largely indefensible position that one can work in social sciences without any reference to self interest. There is much merit in his position, though, in the sense that one would be compelled to support Capitalism even if one believed in the moral code of altruism, a point which Rand didn’t concede. However Bastiat missed the larger truth that people vote altruistically (as recent studies on voter behavior tells us), and as long as they remain in the state of colossal economic ignorance they are bound to support policies which harm the very larger good they have in mind. If voters rejected the morality of altruism, at least the ones who get a raw deal in the end will oppose a disastrous policy. If they considered altruism a virtue or common good a worthy end to pursue, the ones who oppose such a policy would be statistically insignificant.

There is a growing interest in the ideas of Ayn Rand, but Bastiat remains virtually unknown outside the circle of a minority of insiders. Nothing is required now than a revival of his much valuable insights. To paraphrase Henry Hazlitt, “We could use more Bastiats today”!

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