Originally published: 1850
76 pages
Chapter 7


Frederick Bastiat

Frederic Bastiat was a pragmatist:

               See if the law takes from some person what belongs to them, and gives
               it to other persons to whom it does not belong. See if the law benefits
               one citizen at the expense of another by doing what the citizen himself
               cannot do without committing a crime . . . .

               Life, liberty, and property do not exist because men have made laws.
               On the contrary, it is because life, liberty, and property existed
               beforehand that caused men to make laws in the first place.

       The Law is the forerunner to Henry Hazlitt's Economics in One Lesson (Chapter 24) written nearly one hundred years later. These two books intersect on a broad and practical plane. The Law was written at a time of great upheaval in France when economic and societal paradigms were discarded wholesale without a concrete mechanism to replace what was being removed. Economics in One Lesson faced a similar situation, but the change was being accomplished by means of politics and legislation rather than revolution. Both authors saw the same effects from their respective observation points-negative effects that were far broader than mere economic considerations-and each tried to bring his readers back to square one so that a rational analysis could be made of what was happening.


       As seen in the quote opening this synopsis, Bastiat was unhesitant to dissect "acquired rights." He anticipated by more than a century the launching of U.S. President Lyndon Johnson's Great Society-a massive, mid-twentieth-century welfare program born of these "rights." This program was a logical extension of President Franklin Roosevelt's largely ineffective New Deal, an economically destructive social engineering effort in response to the devastation of the Great Depression of the 1930s. Today, the media and Congressional liberals call these acquired rights "entitlements," an effective political disguise for what Bastiat and others saw as much less benevolent or benign.
       The word “entitlement” has become entrenched in modern vocabulary and its effects are the root elements of the U.S. ’s fiscal morass.  The word and concept merit a pause from our consideration of The Law. 
       Out of the liberal view that citizens are entitled to “happiness,” rather than that we are free to pursue happiness on our own terms, comes political “entitlement.”  The companion proposition regarding duties is missing in the conversation.  As “entitlements” are politically piled one on the other the cost, social and economic, simply gets too high to be sustainable.  “Entitlement” becomes so attenuated from true individual rights and duties we arrive at the conclusion, offered in a politically-correct vacuum, we are “entitled” to pretty much everything—and obligated for pretty much nothing.  More to the point, there is no discussion regarding those who pay for what is given to those who are “entitled.”  The right to take and the extent of taking from those who earn is the lost issue in public conversation.  This is obviously Bastiat’s point.
       The conundrum surrounding “entitlements” is created by politics and the principal/agent equation.  The group benefits that are distributed to factions that either organize themselves and then exert political force, or that are organized for political purposes who are then boosted as worthy of “entitlements,” achieve a standing that has become outsized to the needs of these constituencies or real-world economics.  The citizen’s political incentive to keep the costs of these manufactured “entitlements” within reason is low because the costs are spread out among a large, and largely apathetic public base (the principals, the taxpayers), thus the individual pays a small portion of the expense.  When widely dispersed cost is small as applied to the individual, and when individual effort to control these programs is large, the political class (the agents) can do what best suits its own purposes (getting reelected or controlling the bureaucracy) without regard to real long-term economic burdens or actual public belief or benefit. 


       The frosting on the agent’s cake that further quells wide-spread corrective action is the overt moral indictment of the public (by the political and media agents) should it question the claims of good, or even just good intentions in offering “entitlements.”  As well, the specter of actual and moral devastation if benefits are not secure is always at hand.  That these claims are specious, and almost solely politically motivated, that they defy fiscal reality both to the nation and those who receive these transfer payments, is the third rail of modern political action.
       Programs founded in a claim of public morality, no matter that there is more than one moral issue present, and discerning that what is offered may not necessarily represent a good answer to the perceived ill, grow because there isn’t any organized reason for them not to, and plenty of organized reasons to continue them.  Until, of course, one runs out of real money.   Rights and duties are not discussed when considering the “entitlement” equation, only a supposed harm or inequality is.  The political cost in appearing to oppose equal outcome where the real issue is equal opportunity nullifies at the start any public effort to fight entitlements.  Politicians concentrate their efforts on highly visible benefits for organized groups who then shower the politician with political support while he or she garners media attention in the bargain. 
       There are also emotional benefits for those who do not receive but strongly support such payments.  The brigade that casts itself as caring more than less expressive voters has an overt emotional, and often holier-than-thou stake in supporting taxpayer funded entitlements.  This group invariably refuses to recognize the economics of entitlements or the rights and incentives of those who pay the tab.
       The prime U.S. example of the principal-agent relationship is the benefits offered through Social Security and Medicare.  The principals, largely future generations who will foot the bill, are unrepresented (a large percentage not yet even born) in the process.  The agents, the political class, like to bask in the glow of their care for seniors.  The parents and grandparents of those who will pay most of the bill, anonymously, like the current benefits and do not think about, or even do not believe the economic and fiscal claims of the cost to their heirs.  How to solve the devastation of these asymmetrical forces is the principal/agent problem. 
       Public choice theory, an adjunct to principal/agent politics (meaning representative democracy) developed during the last half of the twentieth century.  In a very general way what public choice refers to is the


choices made by government agents (elected or bureaucratic) for us, the public, as principals.  Public choice theory analyzes the democratic majority (its make-up and its goals) that eventually overwhelms the productive minority.  From this springs confrontational politics—but the tools each group uses are of uneven strength.  The majority feel entitled to an ever-larger portion of the profits of the productive class, but that group can only be exploited so far.  When a systemic impasse occurs the fuel that supplies the resources for the majority’s self-interest begins to dry up.  As that happens the downward spiral of increased deficits (yearly budgetary shortfalls) creates debt (long-term borrowing) that takes an ever bigger part of the nation’s income in interest payments until the point is reached where bankruptcy and then complete national restructuring become the only options.  This is what occurred in Greece in 2010-2012. Civil strife is an almost inevitable result—not the “entitled” citizens against the wealthy but against necessary government reforms.
       In analyzing the public choices that cause the majority to attempt more and more resource redistribution from the productive minority, deconstruction of the liberal paradigm necessarily comes forward.   The idea that market or individual failures demand that government can and should step in because governments are both omniscient and benevolent (and fiscal magicians in the bargain) is the liberal response.  That this is not true because self-interest is no less a vice of the majority than the minority is the smaller point.  More importantly, government’s inability to continue to make lemonade out of lemons (i.e., to supply public benefits that tax revenues do not support) results not from ineptitude (it is actually fairly easy for the majority to take money from one pocket and put it into another) but from a dearth of lemons in anyone’s pockets.  As social welfarism costs more, finds more people who must be served, yet produces fewer results, rational assessment brings some necessary answers.  The problem then becomes implementing those answers, and that’s where the majority balks—until the empty coffers answer all the remaining questions.
       Public choice theory investigates how human incentive and the human condition got so politically lost in the ideological surety of economic and social idealists who created the welfare state in the first place.  This tool is not a different principle it is a method of assessing human reaction to long-term political overreach.  It seeks to solve fiscal and social issues simultaneously and soundly.  The emotional public choice is to take care of everyone with a perceived (or politically use-


ful) need; the realistic public obligation is that in the process we not harm either the recipients or those who supply the means.
       History has shown the only way to control government and political efforts run amok is to consider more thoroughly the recurring observations of the authors reviewed in this book—that smaller, less intrusive government, government that can be at least exposed in its fiscal fantasies, is the only reality-based avenue for change and success.  Examples of such changes are the self-funding/privatizing of many government programs.  The change in individual incentive and behavior when the proprietary use of one’s own funds is required, versus easy access to someone else’s money, will make or break a nation. 
       The truly needy are always excepted in this formulation.  Those who cannot help themselves and who cannot create their own safety net are not the overt focus of these discussions because they are always included as the base population from which all of these conversations spring.  As their capabilities are different and their needs apparent, they must be part of a different solution than the one offered for society’s other members.  Although there are those who would claim otherwise, the truly needy are considered as ceaselessly in real government equations as the liberal set insists they are not.  The politically opportunistic claims of uncaring, of selfishness that are hurled at those who address rational solutions to real economic issues, are simply a cynical ruse to take the discussion away from the fiscal reality that will help all levels of society simultaneously, and place it dishonestly at center stage for distorted political finger-wagging.
       The foregoing digression time-travels far from Bastiat, yet it is clear he discusses the birthing of these issues from his nineteenth century perch: how well-intentioned but not necessarily well-thought-out economic programs create vested interests in a few to the detriment of all—including those whom the programs are specifically designed to help. He writes of false philanthropy as the often-harmful act of giving something of value to someone who has not earned it in any meaningful sense. Yet, like all political philosophers who consider the totality of society Bastiat was also never averse to aiding the truly needy, those who cannot help themselves. He was opposed to the same narcotic we so often see dispensed by Congress and the states in modern times, namely, give-away programs that bear no relation to need, capability, or self-esteem. Such programs do, however, tend to have a strong correlation to political expediency and electoral success.  Bastiat talks about these things as being “legal plunder.”


       Modern politicians claim they are committed to the poor, the down-trodden and the invisible, but they refuse to define the principles on which they base their commitment or their efforts.  When offered, their principles often do not stand up to the test of common sense, or support the taking of rights from some to buy the loyalty of those who are politically useful.  Often politically-inspired economic programs don’t pass the rational scrutiny test.  They harm not just the recipients by denying self-reliance that will benefit them and society at large but the economic and philosophic foundations of the nation.  Thus, while modern social welfare programs (often based in the politics of governance by emotion) in theory aim principally to eliminate significant differences in individual circumstances, at base they are philosophically little more than the purchase of political fealty.
       Similar programs in Bastiat's day were the bane of his very existence. He saw them as a primary source of governmental and even societal corruption. Taking from some and giving to others (as has become obvious over the course of the ascendance of the welfare state) is more than just destructive of economic and political truths known for centuries; it is a political and social trivialization of foundational natural rights-and duties. Bastiat argues that as legislated rights, guised as "entitlements," come into being a public devaluing of natural rights and obligations will be as inevitable as night following day. Bastiat finds the basis of these alterations in the creation of the state:

               The state is the great fictitious entity by which everyone seeks to live
               at the expense of everyone else.

It is worthwhile to observe that Bastiat was hardly the first in his strong reaction to the long-term consequences of creating immoderate rights in whole classes of people. In 1835 Alexis de Tocqueville published a short essay titled Memoir on Pauperism. His pessimism regarding the charitable impulse that devolved into political entitlement was conspicuous:

               Any measure that establishes legal charity on a permanent basis and
               gives it administrative form thereby creates an idle and lazy class,
|              living at the expense of the industrial and working class. . . .


Tocqueville recognizes the need for charity, but he believes it can take only one form:

               [b]eneficence must be a…reasoned virtue, not a weak and unreflecting
               inclination. It is necessary to do what is most useful to the receiver, to
               do what best serves the welfare of the majority, not what rescues the few.
               In practice this means that charity should never be made a right, to which
               the "needy" are entitled, but should instead always be considered to be
               a gracious gesture on the part of society. This is necessary because rights
               must be based on the idea of equality of individuals, while a "right to charity"
               would be based on the inferiority of certain individuals. When I assert a
               right to speak, or to own property, or to worship my God, I am stating
               that I am the equal of any man and so am entitled to be treated equally
               under the law. But to assert a claim upon my fellow men for assistance is
               to assert my own inferiority and my dependence upon them. This would
               degrade, rather than uplift, the supplicant.

               I am deeply convinced that any permanent, regular administrative system
               whose aim will be to provide for the needs of the poor will breed more
               miseries than it can cure, will deprave the population that it wants to help
               and comfort, will in time reduce the rich to being no more than the tenant-
               farmers of the poor, will dry up the sources of savings, will stop the
               accumulation of capital, will retard the development of trade, will benumb
               human industry and activity, and will culminate by bringing about a violent
               revolution in the State.

     Tocqueville goes a step further as well; he presents an equally bright alternative to the gloom he sees in forced charity, known today as the welfare state. While raising a consciousness of the nineteenth-century's alms giving he defines the relationship not just between the giver and the recipient of such charity, but between each person and his own comprehension of ethical and interpersonal verities:

               Individual alms-giving established valuable ties between the rich and
               the poor. The deed itself involves the giver in the fate of the one whose
               poverty he has undertaken to alleviate. The latter, supported by aid
              which he had no right to

               demand and which he had no hope to getting, feels inspired by gratitude
               [and some desire to then earn the generosity he has received]. A moral 
               tie is established between those two classes whose interests and passions 
               so often conspire to separate them from each other, and although divided 
               by circumstance they are willingly reconciled. This is not the case with 
               legal charity. The latter allows the alms to persist but removes its morality. 
               The law strips the man of wealth of a part of his surplus without consulting 
               him, and he sees the poor man only as a greedy stranger invited by the 
               legislator to share his wealth.  The poor man, on the other hand, feels no 
               gratitude for a benefit that no one can refuse him and that could not satisfy 
               him in any case.

     The human element in all of these relationships is far more important than the economic. This will be further explored in the synopsis of Reclaiming the American Dream (Chapter 30) where Richard Cornuelle dissects how government drives private charitable efforts out of social intercourse.
     The long-term effect of improperly judging human dignity is what underlies so many failed "intellectual" efforts-efforts that address conditions but not people and thus fail in both their design and execution. The imponderables of human pride and capability are the real subjects of the observations made by these authors. These are not things well-crafted in committee hearings or pontifical speeches, but in unfeigned activity in neighborhoods. In other words, people on one side are not so needy and those on the other not so aloof as demagogues would have us believe. Government intervening between the two becomes a false moral imperative and an economic disaster. The well-intentioned contend they are giving hope but in reality they are suffocating it.
     Bastiat states that the first purpose of government is to ensure our individual ability, by means of the rule of law, to defend our person, liberty, and property. These are the essentials of life. The signal point of government is to prevent anarchy and chaos in the population and thus to foster justice. Bastiat does not see government functioning primarily as an active purveyor of equity; he sees government operating in a negative fashion, that is, government's function is to stop injustice so justice itself remains. In a reciprocal way, in order to be secure from government, laws exist to protect the public from perfidy and corruption


emanating from the governors or a tyrannical popular majority. We see in Bastiat an echo of Thomas Jefferson's declaration: "In questions of power, then, let no more be heard about confidence in man, but bind him down from mischief with the chains of the Constitution."
     For Bastiat the law created by men was merely, and only, an extension of a natural right:

               The law is the organization of the natural right of lawful defense. It is
               the substitution of common force for individual forces. And this common
               force is to do only what the individual forces have a natural and lawful
               right to do: to protect persons, liberties, and properties.

     Bastiat is a mid-nineteenth-century Frenchman who deals with both the demise of the monarchy and the reality of socialism's growing popularity subsequent to the French Revolutions of 1789 and 1848. He addresses issues that became a constant source of conflict in the following century. He rails against socialism because its proponents found it necessary to use force not only to institute its equalitarian goals, but also to perpetuate them. Socialism goes against the basic instincts of humanity; it destroys incentive and ingenuity and its victims must be compelled to accept it. Moreover, because socialism is economically inefficient it robs the community of what it could achieve were it not being victimized by ignorant officials or artificial governmental controls.
     Unfortunately, collectivist impulses are still present in the twenty-first century albeit in a more oblique and beguiling fashion. Foreseeing the growth of state welfarism, effected by shrewd political maneuvers, Bastiat warns that such welfarism is simply a more insidious form of socialistic thinking, created and enforced by means of demagoguery and legislation rather than tyranny and despotism.
Bastiat's concern is two-fold: First, the governmental act of taking property from one group and giving it to another is an inappropriate denial of the first group's natural right to the fruits of its labor. Second (and probably more important to Bastiat), there is a negative effect on society and the individual recipients as a result of such a coerced transfer of wealth. Although he doesn't use a phrase such as "the culture of dependency," that is what he foresees. He also foresees to where such distortions of the social fabric will lead-to the wholesale destruction of the culture of those to whom benefits are given.


     Bastiat sees the potential for degrading social conflict if redistribution of wealth grows out of proportion to its justifications. He sees the cultural destruction of human dignity and the devaluation of human incentive when there is wholesale government intervention in the marketplace. The notion that dependency changes people has long been comprehended, even by those supplying the means through which dependency is supported.
     When George Washington became convinced that slavery could not be countenanced in view of the premises underlying the American experiment, he made plans to free his slaves-and pay them at least some of what they were owed for the work they had given. Washington felt that sudden freedom for his slaves was not tenable-politically, socially, economically, and particularly individually-so he devised a plan for gradual emancipation. As Benjamin Hart observes in Faith and Freedom (2004), the execution of Washington's design took several decades. As late as 1833 (Washington died in 1799) his estate was still forwarding wage and pension payments to former slave families. Washington himself understood the culture of dependency he had created, and that his soon-to-be-former slaves needed some protection prior to emancipation. He felt, as Hart
comments, that "a slave had no need to learn skills of self-reliance, entrepreneurship, and no means of cultivating the competitive instinct so vital for survival."
     The modern victims of our largesse-the recipients of state welfarism-are in the same unenviable position. We insist that the less well-off be continually treated as children, and when they do not embrace the tools of responsibility, we blame them rather than our own excessive pride or intellectual inconsistencies.
     On the "taking" side of the public experiment, it is clear from his text that Bastiat's concerns are not about taxation, per se. Simply presented, his anxiety is about the uses of power to achieve something legislatively that would be otherwise illegal-taking from one to give to another. While this form of stealing is immoral philosophically, it is often advantageous politically. In order to fully comprehend Bastiat's use of forceful language, we have to remember his proximity to violent and deadly revolution. In his era, if groups of citizens did not appreciate what was happening, they were as likely to take up a gun as a pencil, as likely to build barricades as ballot boxes. Thus Bastiat wants to be clear so there is no mistaking the perilous course on which he sees his contemporaries embarking.
     Bastiat, as might be expected, was an activist in addition to being


a theorist. He was outspoken in defense of his views and was politically involved in continued efforts to define, debunk, and destroy the dangers he saw; collectivism and its corollary, coerced conformity by government fiat. Bastiat remains important as a reminder to recognize and then expose the often demeaning and invariably disguised collectivist compulsions of modern "progressives." This group attempts to expand social welfarism through ignorance, naiveté, or even political deceit, to the detriment of the economy and the citizenry. Today, the welfare state is nothing but the repackaging and refining of socialistic goals. Bastiat contends that the alleged altruistic impetus behind such thinking seems benign until its full effects are observed. Opposing the false goal of equality of result is Bastiat's stark declaration of how the equalitarians succeeded politically where force failed:

               The law has been perverted by the influence of two entirely different
               causes: stupid greed and false philanthropy.

     Bastiat views the popular law of his time (law also currently present in a slightly different form) as politically, intellectually, and economically corrupt. Its perverse results are an embodiment of the general will supposedly being divined by a legislative majority acting on its own, not with the intellectual or voting consent of the electorate. In writing this slim volume he seeks to define why this is so. In large part the political success of equalitarians lies in nascent political correctness where a cowed populace is condemned for suggesting thoughtful investigation of government programs that are aimed at helping the less fortunate. Those who should ask for demonstrated positive results of such programs don't out of fear of being labeled insensitive, uncaring, self-absorbed, or even bigots or racists. They are silenced by the glare of the politically correct and the fear of public excoriation in the media while the construction of new "rights" for the less fortunate proceeds unabated.
     By returning to the era in which Bastiat wrote it may be easier to understand why he saw so clearly what he did. The politics in France subsequent to the revolution of 1848 were the antithesis of the then-ongoing American experience. In Bastiat's observations we see the first overt development of the battle between freedom (as expressed in the free market in the United States) and economic slavery (founded in the socialism of Europe). Because the differences were both
unmistakable and simple, Bastiat's celebrated explication of this war of ideas


is the most helpful from this era. Although it became clear during the second half of the nineteenth century that American capitalism needed controls, it was the series of adjustments that were effected in response to capitalism's excesses that made the system in the U.S. work. Abandonment of American capitalism in the face of its faults was never more than a proposition-and then only from a few radicals. But France was full of radicals. Many U.S. and European economic theorists and political figures of that period, including Bastiat, understood capitalism's imperfections and acted to correct them. The European political community was not so fortunate in its response to the intemperances of capitalism. As a result, they have struggled with socialistic intentions ever since-to their geopolitical and geo-economic degradation.
     Politics is the art of the possible. Unfortunately, in Bastiat's time (as now), many more things were seen as possible than actually are. This was especially true in those whose intellectual or emotional musings conjured utopia. Fueled by the Enlightenment's rationalism, they did not realize that what could be thought of by human ingenuity could not necessarily be achieved by human striving. Their speculations devolved into legislated rights that required state confiscation of private property to be given to others. Both the proposition and the means resulted in a social battle that yet endures. Bastiat's solution for the ongoing "civil" war is simple:

               The safest way to make laws respected is to make them respectable.
               When the law and morality contradict each other the citizen has the
               cruel alternative of either losing his moral sense or losing his respect
               for the law. . . . There is in all of us a strong disposition to believe that
               anything lawful is also legitimate. This belief is so widespread that
               many persons have erroneously held that things are "just" because
               law makes them so.

     Bastiat was not one to simply criticize; he also offers solutions. By way of example, he denounces the philosophy of Thomas Hobbes who writes in Leviathan in 1651 that men submit to government because they fear one another more than they fear a central authority. Hobbes thus is contending that man craves security more than freedom; accordingly oppressive government control is necessary, even welcomed. Bastiat sees mankind in an entirely different light. He holds that


there is a naturally harmonious order to the social world, an order that emanates from the free exchange of goods, services, and ideas between human beings driven to satisfy unlimited wants with limited resources. This exchange is essentially self-regulating as a result of the enlightened self-interest described in Adam Smith's Wealth of Nations (Chapter 12). The outcome is a steady progress in the material well being of all. Bastiat explains that interference with this freedom (and its corollaries of unfettered competition and secure property rights) leaves people poorer and ultimately oppressed as further government action is imposed in an attempt to remedy what the last program distorted. Citizens are driven away from the creative actions in which they would otherwise engage. The fruits of this unused creativity remain unripe because of government intervention.
     The illusory collectivist (or welfarist) goal of economic equality is a corollary to Hobbes's centralized government. Bastiat fought against this not solely because it was undesirable from many points of view, but because it was (and is) unachievable. It is unachievable because the human spirit is not rooted in equality (or subservience) but rather in unlimited imagination and striving. The
self-ordering success of these characteristics is evident in the free-market's almost fabled raising of the standard of living around the world across the centuries. Actions speak louder than words. And in this case, they simply overwhelm political rhetoric.
     Bastiat emphasizes that the illusion of equality conferred by fiat isn't just destructive of what has been achieved. It ultimately destroys the very system that allows government largesse to exist in the first place. If there is no incentive to create, to imagine, to produce, because the fruits of one's labor are taken through taxation and regulation, then eventually there will be no production, no creation, and nothing to tax.
     Interestingly, Bastiat saves some of his sharpest barbs for the political writers and social philosophers of his own day. His descriptions of their arrogance and condescension (applauding the imagined possibilities of Enlightenment thinking while ignoring the obvious potential of humanity's enlightened self-interest) could be reprinted in the present with equal effect and accuracy. But he does not just rail against this arrogance itself; he also denounces its evil fruits as the media of his era refused to present any views containing rational assessment. Here, too, Bastiat and Hazlitt were partners.
     Bastiat laughs at the foibles and riddles of the self-appointed, those who look on the masses of society as inept, incapable, and ignorant


of what is best for them. He notes that these self-same pontificators nevertheless defend (through equally uninformed circular reasoning) the inalienable right of the "ignorant masses" to elect those who will tell them how to live their lives.
     We detect no hesitancy in Bastiat's writings to pronounce the emperor without any clothes. For Bastiat, the collectivist parade was not just flawed; it was sinister. In his view our obligation is to point this out in plain words and then to give our words force through strong actions.

About the Author
Frederic Bastiat was born in 1801 in Paris and lived only to the age of 49. He died of tuberculosis in 1850, the same year The Law was published. Orphaned at age nine, he studied economics by choice and was fluent in several languages. The depth of his reading, especially in foreign languages, made his knowledge more extensive than that of most of his contemporaries. The great impetus for much of his writing was the revolution of 1848 when France turned wholly to socialism, an event from which it has yet to recover. Bastiat was a deputy in the French legislature and also an economist who understood both humanity and the implications of Adam Smith. The force of his logic is inescapable although to many in mid-nineteenth-century France it was inexcusable. Time has proven Bastiat correct much to the pleasure of those who today benefit from his clear thinking and profound understanding of human nature and the value and strength of free markets.

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