Selected Essays On Political Economy Bastiat

radically apart from the school of the economists is not this or that question of detail…; it is the point of departure, it is this preliminary and paramount question: Are human interests, left to themselves, harmonious or antagonistic?

There is of course no guarantee that the market will satisfy each individual at each point of time.

Bastiat does not claim that the market would be free from "causes perturbatrices" (pp. Quite to the contrary, he spends many pages of his book emphasizing these features of the social world (see, for example, 1851, pp. His point does not refer at all to the question of whether all members of society always act in harmony with each other, but to the question whether their interests are always harmonious. The interests of all members of society are harmonious as long as they respect each other's property, deriving from self-ownership, because cooperative production is more physically productive than individual production.5 Each member of society can profit from a well-ordered division of labor, and there is nothing in the market that would make such a division of labor from the outset impossible.

This type of argument was widespread in the 1930s and still is today, thanks to the efforts of free-market Chicago economists.

In distinct contrast, Bastiat did not claim that laissez-faire was bound to produce a state of perfection.

The most important economic justifications for government intervention stressed the existence of business cycles, monopoly, public goods, and unemployment.

In each of these cases, the perceived problem was claimed to be a market failure, which is nothing else but the claim that the problem under consideration springs from the very nature of the market.These rebuttals would certainly gain in strength if they were combined with a more general attack on the fallacy underlying all these individual cases.And when it comes to such endeavors, present-day economists will benefit very much from the careful study of Bastiat's doctrine of economic harmonies.The market cannot possibly solve it, at any rate, it cannot solve it as well as the government, the great , which is therefore necessary to bring relief.True to Bastiat's spirit, many Austrian and a few mainstream economists have again and again rebutted these twentieth-century allegations of market failure case by case.Claude Frédéric Bastiat (1801 — 1850) is one of the greatest economists ever.His role as organizer of the French, and inspiration of the nineteenth- century continental European free-trade movement is not controversial, and all historians recognize him as a great pamphleteer — some even calling him "the most brilliant economic journalist who ever lived." 1 It is however not generally recognized that Bastiat was also a significant theoretician whose discoveries have had a lasting importance.2 His intellectual legacy has been unduly neglected because it concerns problems that are not on the radar screen of twentieth-first-century mainstream economists.As Bastiat said about these limits of otherwise universal economic harmonies: "However much we love reconciliation, there are two principles that cannot be reconciled: liberty and coercion."4 Thus the free market can satisfy all interests except for the interests of those who, for whatever reason, seek to invade the property of others.As a consequence it is not necessary to call for institutionalized intervention.It has much common ground with present-day Austrian economics, though, and the purpose of this article is to unearth some of these similarities and to help restore Bastiat to his rightful place in the history of economic science.3 Bastiat is often presented as a champion of the doctrine of harmony.While this is correct, it is generally not well understood what this doctrine actually says and how it contrasts with more recent views about the interrelation of social phenomena. It is in this book that he develops and defends the thesis that the interests of all members of society are harmonious if and insofar as private property rights are respected or, in modern parlance, that the unhampered market can operate independent of government intervention. He asserts that there is nothing in the nature of the free market that would make its well-ordered operation impossible from the outset.