Economic Sophisms

Frédéric Bastiat
Bastiat, Frédéric
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Arthur Goddard, trans.
First Pub. Date
Irvington-on-Hudson, NY: The Foundation for Economic Education, Inc.
Pub. Date
Introduction by Henry Hazlitt
35 of 46

Second Series, Chapter 6

To Artisans and Laborers23*


Several newspapers have attacked me in your presence. Won't you please read my defense?


I am not a distrustful person. When a man writes or speaks, I take it for granted that he believes what he is saying.


And yet, as I read and reread the newspapers that have attacked me, I seem to find in them unfortunate evidence to the contrary.


What is the question at issue? It is that of determining which is more advantageous for you, protectionism or free trade.


I believe that it is free trade, and they believe that it is protectionism; it is incumbent upon each of us to prove his contention.


Was it necessary to insinuate that we are the agents of England, of the south of France, of the government?


Just see how easy it would be for us to retaliate in the same vein.


We are, they say, agents of the English, because some of us have used the words "meeting" and "freetrader"!


But do they not use the words "drawback" and "budget"?24*


We are, it is said, imitating Cobden and English democracy!


And are they not parodying Bentinck and the British aristocracy?25*


We are accused of borrowing from perfidious as Albion the doctrine of free trade!


And are they not borrowing from her the quibbles of protectionism?


We are alleged to be yielding to pressure from Bordeaux and the South!


And do they not serve the greed of Lille and the North?26*


We are charged with abetting the secret designs of the ministry, which is trying to divert public attention from its policy!


And are they not favoring the views of the civil service, which benefits more than anyone else in the world from the policy of protectionism?


You see very well that, if we were willing to stoop to character assassination of this kind, we should have no shortage of weapons.


But that is not what is in question.


The question, and I shall not lose sight of it, is this:


Which is better for the working classes—to be, or not to be, free to buy from abroad?


You workers are told: "If you are free to buy from abroad what you now produce yourselves, you will no longer produce it; you will be without employment, without wages, and without bread; it is therefore for your own good that we are limiting your freedom."


This argument takes all kinds of forms. For instance, it is said: "If we clothe ourselves in English fabrics, if we make our plows with English iron, if we cut our bread with English knives, if we dry our hands with English towels, what will become of French workingmen? What will become of our domestic industry?"


Tell me, workers, suppose a man were to stand on the dock at the port of Boulogne and say to each Englishman who landed, "If you will give me those English shoes, I will give you this French hat"; or "If you will give me that English horse, I will give you this French tilbury"; or, "Would you like to exchange that Birmingham machine for this French clock?" or, again, "Would it suit you to trade that Newcastle coal for this champagne?" and assuming that our man used good judgment in making his proposals, can it be said that our domestic industry, taken as a whole, would be injured as a result?


Would it be any more so if there were twenty men offering exchanges at Boulogne instead of one, if there were a million such transactions instead of four, or if merchants and money were introduced in order to facilitate the whole process and indefinitely multiply the number of individual acts of exchange?


Now, whether one country buys wholesale from another in order to sell at retail, or buys at retail in order to resell wholesale, if we follow the transaction to its ultimate conclusion, we shall always find that commerce is nothing but a complex of barter transactions involving the exchange of goods for goods and services for services. If, then, a single barter transaction does no harm to domestic industry, since it involves just as much domestic labor given as foreign labor received, a hundred billion barter transactions will not harm it any the more.


But, you may ask, in what will the profit consist? The profit comes from making the best use of the resources of each country, so that the same amount of labor yields greater satisfaction and well-being everywhere.


There are some who resort to an unusual stratagem in dealing with you. They begin by conceding that free trade is superior to a policy of protectionism, doubtless in order to avoid having to defend themselves on that ground.


Then, they remark that, in the transition from one system to the other, there will be some displacement of labor.


Next, they expatiate on the sufferings that this displacement must, according to them, necessarily entail. They exaggerate these sufferings, enlarge upon them, make them the chief subject of discussion, representing them as the sole and final consequence of the proposed reform, and strive in this way to enlist you under the banner of monopoly.


This is, in fact, the very same stratagem that has been used to defend every kind of abuse; and I must frankly acknowledge that it always disconcerts the proponents of reforms, even of those most desirable for the people.


The reason for this is easily understood.


Once an abuse exists, everything is arranged on the assumption that it will last indefinitely; and, as more and more people come to depend upon it for their livelihood, and still others depend upon them, a superstructure is erected that soon comprises a formidable edifice.


The moment you try to tear it down, everybody protests; and the point to which I wish to call particular attention here is that those who protest always appear at first glance to be in the right, because it is easier to show the disorder that must accompany reform than the order that should follow it.


The supporters of the abuse are able to cite specific facts; they can name the particular persons, as well as their suppliers and workers, who will be injured by the reform—while the reformer, poor devil, can refer only to the general good that is to be gradually diffused among the masses. This does not produce nearly so great an effect.


Thus, if the question is that of abolishing slavery, "You poor men," they say to the Negroes, "who is going to feed you now? Your master may have you beaten, but he also provides you with cassava."


And the slaves miss their fetters, for they ask: "Where are we to get our cassava?"


They do not see that it is not the master who feeds them, but their own labor, which also feeds the master.


When the monasteries were being reformed in Spain, people would ask the beggars, "Where will you get your food and clothing? The prior is your good angel. Is it not convenient to be able to turn to him?"


And the beggars would say: "It's true. If the prior goes away, we see quite clearly what we stand to lose, but we do not see who will come to take his place in our lives."27*


What they failed to see was that if the monasteries were bestowing alms, they were also living on them; so that the monks received more than they gave.


In the same way, workers, monopoly imperceptibly lays taxes on the shoulders of all of you, and then, out of the income derived from these taxes, it gives you jobs.


And your false friends ask you, "If there were no monopolies, who would give you work?"


And you reply, "That's right. We can count on the jobs the monopolists obtain for us. But whether we can count on the promises of free trade is uncertain."


What you fail to see is that the monopolists first worm the money out of you, and then give you back a part of it for your labor.


You ask who will give you work? Good heavens! Do you not see that you give one another work? With the money that will no longer be taken away from you, the shoemaker will dress better and give work to the tailor. The tailor will buy new shoes more often and give work to the shoemaker. And the same thing will happen in all other branches of business.


It is said that under a system of free trade there will be fewer workers in the mines and textile mills.


I do not think so. But, if this does happen, it will be necessarily because a greater number of workers will be voluntarily employed at home or working above ground.


For if these mines and textile mills can support themselves, as is alleged, only with the help of taxes levied for their benefit on everyone, once these taxes are abolished, everyone will be more prosperous, and it is the prosperity of all that supports the labor of each.


Excuse me if I dwell a little longer on this point. I should so much like to see all of you on the side of free trade!


Suppose that the capital invested in French industry yields a profit of five per cent. But here is M. Mondor, who has put 100,000 francs into a mill that leaves him with a loss of five per cent. Between profit and loss, the difference is 10,000 francs. What is to be done? Quite stealthily, a small tax of 10,000 francs is imposed on you, and the proceeds are turned over to Mondor. You do not notice it, because the whole affair is very cleverly disguised. It is not the tax collector who comes to demand from you your share of the tax; instead you pay it to Mondor, the ironmaster, every time you buy your hatchets, your trowels, and your planes. Then you are told: "If you do not pay this tax, Mondor will go out of business; his workers, Jack and Jim, will be out of work." Good heavens! If the tax were restored to you, would you not put one another to work, and for your own benefit too?


After that, rest assured, once this soft cushion of price-supports maintained by taxation is removed, Mondor will spare no effort to convert his loss into a profit, and Jack and Jim will not be discharged. Then everyone will profit.


Perhaps you will rejoin: "We quite understand that after the reform there will, on the whole, be more jobs than before; but meanwhile Jack and Jim will be out on the street."


To this, I reply:


1. When labor is displaced only so that jobs can multiply, any man who has a head and hands is not left long on the street.


2. There is nothing to hinder the state from earmarking certain funds to provide, during the transition, for the relief of unemployment, which I, for my part, do not think will occur.


3. Finally, if I know the workers, they are quite ready to endure some temporary hardships necessitated by a shift from one job to another if this means getting out of a rut and entering upon a life that will be better and, above all, fairer for everyone. Would that the same were true of their employers!


After all, just because you are workers, are you not intelligent and responsible? Your pretended friends seem to forget this. Is it not surprising that they should discuss such a question in your presence and talk of wages and profits, without even once uttering the word justice? Yet they are well aware that trade restrictions are unjust. Why, then, do they not have the courage to admit it and to tell you: "Workers, an injustice prevails in this country, but it is profitable for you, and it must be maintained." Why? Because they know that you would reply: "No."


But it is not true that this injustice is profitable to you. Give me your attention for a few more moments, and judge for yourselves.


What is being protected in France? Things made by big business—iron, coal, cloth, and textiles—and you are told that this is done, not in the interests of the entrepreneurs, but in yours, in order to guarantee you employment.


Yet every time foreign labor appears on our market in such a form that it could be harmful to you, but useful to the big businessmen, do they not let it enter?


Are there not twenty thousand Germans in Paris making clothes and shoes? Why are they permitted to establish themselves alongside of you, when cloth from abroad is barred from France? Because cloth is made in large mills belonging to manufacturers who are also legislators, whereas clothing is made by workers in their own homes. In the processing of wool into cloth, these gentlemen want no competition, because that is what they do for a living; but in the processing of cloth into clothing, they readily allow it, for that is what you do for a living.


When they built railroads, they prohibited the importation of English rails, but they brought over English workmen. Why? Well, it's quite simple: because English rails compete with those produced by our own big mills, whereas English labor competes only with your labor.


We ourselves do not ask that German tailors and English navvies be kept out of France. What we ask is that cloth and rails be free to enter. We demand justice for all, equality before the law for everyone!


It is ridiculous to tell us that tariff restrictions are imposed for your benefit. Tailors, shoemakers, carpenters, joiners, masons, blacksmiths, shopkeepers, grocers, clockmakers, butchers, bakers, upholsterers, milliners—I defy you all to cite me a single respect in which protectionism benefits you, and, any time you wish, I shall cite you four in which it harms you.


Let us see, after all, just how much truth there is in your journalists' accounts of the "self-sacrifice" practiced by the monopolists.


I think one may call the natural rate of wages that which would be established naturally under a system of free trade. When, therefore, you were told that protectionism is to your advantage, this was as good as being told that it adds a surplus to your natural wages. Now, a surplus over and above the natural rate of wages must come from somewhere; it does not fall from the moon, and it must come from those who pay it.


You are therefore led to the conclusion that, according to your self-styled friends, the policy of protectionism has been introduced and adopted so that the interests of the capitalists may be sacrificed to those of the workers.


Now, tell me, is that likely?


Where, then, is your seat in the Chamber of Peers? When have you had a voice at the Palais-Bourbon?28* Who has ever asked your advice? Where did you get this idea of instituting a policy of protectionism?


I can hear you answer: "It was not we who instituted it. Alas, we are neither peers nor deputies nor councillors of state! It was the capitalists who did it."


Great God in heaven! They must have been in very good humor that day! What! The capitalists made the law; they instituted the policy of protectionism, and they did it so that you workers might profit at their expense!


But here is what is even more extraordinary.


How does it happen that your self-styled friends, who talk to you so much about the goodness, the generosity, and the self-sacrifice of the capitalists, never cease to commiserate with you on the fact that you are deprived of your political rights? From their point of view, what could you do with them even if you enjoyed them? The capitalists have a monopoly on legislation; that is true.29* Thanks to this monopoly, they have conferred upon themselves a monopoly on iron, cloth, textiles, coal, wood, and meat—that is also true. But your self-styled friends tell you that by doing this the capitalists have impoverished themselves, without being under any obligation to do so, in order to enrich you, without your having any right to be rich! Surely, if you were voters and deputies, you could not manage your affairs better; indeed, you could not manage them so well.


If the currently prevailing industrial organization has been designed with your interests in view, then it is perfidious to demand political rights on your behalf; for these new-fangled democrats will never escape the following dilemma: the law, as made by the middle classes, either gives you more, or it gives you less, than your natural wages. If it gives you less, they are deceiving you by inviting you to support it. If it gives you more, they are still deceiving you by urging you to demand political rights, when the middle classes are making sacrifices for you that you, in all honesty, would not dare to vote for yourselves.


Workers, God forbid that this tract should have the effect of sowing in your hearts any seeds of resentment against the wealthy classes! If self-interest, whether badly understood or genuinely alarmed, is still the mainstay of monopoly, let us not forget that it has its roots in errors common to both capitalists and workers. Thus, rather than incite them against one another, let us strive to draw them together. And what do we need to do to achieve this end? If it is true that natural social tendencies are conducive to the elimination of inequalities among men, we need only allow these tendencies to operate, remove the artificial obstacles that interfere with their effectiveness, and let the relations among the various classes be based upon justice, which is indistinguishable, at least in my mind, from the principle of freedom .30*

Notes for this chapter

[This chapter first appeared in the Courier français (September 18, 1846), whose columns were opened to the author so that he could reply to the attacks which had appeared in L'Atelier. It was only two months later that the newspaper Le Libre échange appeared.—EDITOR.]
[Words enclosed in quotation marks are in English in the original.—TRANSLATOR.]
[Richard Cobden (1804-1865), English manufacturer, member of Parliament, and champion of free trade, known personally to Bastiat and much admired by him. Lord George Bentinck (1802-1848), known in Parliament almost exclusively for his leadership of the opposition to free trade.—TRANSLATOR.]
[In France at this time, just as traditionally in the United States, there was an agricultural, free-trade South and an industrial, protectionist North.—TRANSLATOR.]
[In 1836 the monasteries in Spain were closed, and their property was confiscated by the government.—TRANSLATOR.]
[Meeting-place, in Paris, of the Chamber of Deputies.—TRANSLATOR.]
[In France at this time, out of a population of about thirty millions, perhaps as many as 200,000 men from the upper-income group were empowered to vote.—TRANSLATOR.]
[Cf., in Vol. II (of the French edition), the point-blank polemic against various newspapers.—EDITOR.]

Second Series, Chapter 7

End of Notes

36 of 46

Second Series, Chapter 7

A Chinese Tale


People bewail the greed and selfishness of our age!


I, for my part, find the world, especially Paris, peopled with Deciuses.31*


Open the thousand books, the thousand newspapers, the thousand pamphlets, that the Parisian presses spew forth every day over the country. Are they not all the work of little saints?


What animation in the painting of the vices of our day! What moving concern for the masses! With what liberality the rich are invited to share with the poor, if not the poor with the rich! What a host of plans for social reforms, social improvements, social organizations! Is there any hack scribbler who is not devoting himself to the welfare of the toiling masses? For an advance of a few crowns,32* he will find the opportunity to indulge himself in humanitarian lucubrations.


And yet people talk about the selfishness and individualism of our era!


There is nothing that does not pretend to serve the well-being and the edification of the people—nothing, not even the customhouse. You think, perhaps, that it is just another instrument of taxation, like the license bureau or the tollhouse at the end of the bridge? Nothing of the kind. It is essentially an institution for the advancement of civilization, fraternity, and equality. What do you expect? To be in fashion today, one must show, or pretend to show, feeling, sentimental sensibility, everywhere, even at the customhouse window where they ask, "What do you have there, friend?"


But for realizing these humanitarian aspirations, the customhouse has, it must be confessed, some rather strange procedures.


It musters an army of directors, assistant directors, inspectors, deputy inspectors, superintendents, auditors, collectors, department heads, assistant department heads, clerks, supernumeraries, candidates for the jobs of supernumeraries, and candidates for the candidacy, to say nothing of those on active service—all with the object of exercising over the productive activities of the people the negative action that can be summed up in the word bar.


Notice that I do not say tax, but quite genuinely bar.


And to bar, not acts repugnant to morality or dangerous to public order, but transactions that are innocent and, as is admitted, conducive to peace and harmony among nations.


Nevertheless, mankind is so flexible and adaptable that in one way or another it always surmounts these barriers. It is just a matter of applying more labor.


If people are barred from importing their food from abroad, they produce it domestically. This is more laborious, but one must eat. If they are barred from passing through the valley, they climb over the mountains. This way is longer, but one must reach one's destination.


All this is regrettable, but it does have its ridiculous side. When the law has in this way created a certain number of obstacles, and when, in order to overcome them, mankind has diverted a corresponding amount of labor from other employments, you are no longer allowed to demand the reform of the law; for if you point out the obstacle, the jobs that it makes for are pointed out to you, and if you say, "These are not jobs that have been created, but displaced, by the obstacle," you are answered in the words of L'Ésprit public: "Only our impoverishment is certain and immediate; as for our enrichment, that is more than problematical."


This reminds me of a Chinese story.


Once upon a time there were, in China, two great cities: Chin and Chan. They were connected by a magnificent canal. The emperor judged it desirable to have enormous blocks of stone thrown into it, in order to put it out of service.


Seeing this, Kuang, his chief mandarin, said to him:


"Son of Heaven, you are making a mistake."


To which the emperor replied:


"Kuang, you are talking like a fool."


(Of course I am reporting here only the gist of their conversation.)


After three moons had passed, the celestial emperor sent for the mandarin and said to him:


"Kuang, look yonder."


And Kuang opened his eyes and looked.


And he saw, some distance from the canal, a multitude of men at work. Some were excavating, others were raising embankments, still others were leveling the ground, and others laying paving stones; and the mandarin, who was very well read, thought to himself: They are making a highway.


After three more moons had passed, the emperor summoned Kuang and said to him:


"Look yonder."


And Kuang looked.


And he saw that the highway was completed, and he noticed that at different points all along the road, inns were being built. A host of pedestrians, carts, and palanquins were coming and going; and innumerable Chinese, overcome with fatigue, were carrying heavy burdens from Chin to Chan and from Chan to Chin. And Kuang said to himself: "It was the destruction of the canal that provided jobs for these poor people." But it never occurred to him that their labor had been diverted from other employments.


And three more moons passed by, and the emperor said to Kuang:


"Look yonder."


And Kuang looked.


And he saw that the inns were always full of travelers, and, grouped around them, were the shops of butchers, bakers, and dealers in swallows' nests, to feed the hungry travelers. And, inasmuch as these worthy artisans could not go about naked, there had also settled among them tailors, shoemakers, and dealers in parasols and fans; and since people do not sleep out in the open air, even in the Celestial Empire, there were also carpenters, masons, and roofers. Then there were police officials, judges, and fakirs; in brief, a city with its suburbs had grown up around each inn.


And the emperor said to Kuang, "What do you think of it?"


And Kuang replied: "I should never have thought that the destruction of a canal could create jobs for so many people"; for it never occurred to him that these jobs had not been created, but displaced, and that the travelers used to eat just as well when they went along the canal as they did after they were forced to use the highway.


However, to the great astonishment of the Chinese, the emperor died, and this Son of Heaven was laid to rest.


His successor sent for Kuang and said: "Have the canal opened up."


And Kuang said to the new emperor:


"Son of Heaven, you are making a mistake."


And the emperor answered:


"Kuang, you are talking like a fool."


But Kuang persisted and said, "Sire, what do you have in mind?"


"I have in mind," the emperor said, "facilitating the movement of men and things between Chin and Chan by making transportation less expensive, so that the people may have tea and clothing at lower cost."


But Kuang was all prepared. The evening before, he had received several issues of the Moniteur industriel, a Chinese newspaper. Knowing his lesson well, he asked permission to reply; after obtaining it, he prostrated himself nine times and said:


"Sire, by facilitating transporation, you hope to reduce the price of consumers' goods, in order to put them within reach of the people, and to this end, you begin by making them lose all the jobs that the destruction of the canal gave rise to. Sire, in political economy, low prices..."


The emperor: "You seem to be reciting this from memory."


Kuang: "You are right; it will be more convenient for me to read it to you."


And, after unfolding L'Ésprit public, he read:

In political economy, low prices for consumers' goods are of only secondary importance. The real problem consists in establishing an equilibrium between the price of labor and that of the means of subsistence. The wealth of a nation consists in the amount of employment it provides its labor force, and the best economic system is that which provides the greatest possible number of jobs. The question is not whether it is better to pay four cash or eight cash for a cup of tea, five taels or ten taels for a shirt. These are childish considerations unworthy of a mature mind. No one disputes your thesis. The problem is whether it is better to have to pay more for a commodity, but to have, thanks to the abundance of jobs and the higher price of labor, more means of acquiring it; or whether it is better to limit the number of job opportunities, reduce the total quantity of domestic production, and transport consumers' goods by water, doubtless at lower cost, but at the same time denying some of our workers the possibility of buying them even at these reduced prices.


Since the emperor was still not entirely convinced, Kuang said to him: "Sire, deign to wait. I still have the Moniteur industriel to read to you."


But the emperor said:


"I do not need your Chinese newspapers to know that to create obstacles is to divert and displace labor. But that is not my mission. Go out there and clear the obstacles from the canal. After that, we'll reform the tariff."


And Kuang went off, tearing at his beard and lamenting: "O Fô! O Pê! O Lî! and all other monosyllabic, circumflected gods of Cathay, take pity on your people; for there has come to us an emperor of the English school, and I can see that before long we shall be in want of everything, since we shall no longer need to do anything."

Notes for this chapter

[The Deciuses referred to here were Publus Decius Mus, father and son, both military leaders of the Roman Republic between 350 and 275 B.C. Each is said to have performed an act of self-devotion by hurling himself into the enemy's midst when the Roman column he was leading was repulsed by the foe.—TRANSLATOR.]
[Écus, obsolete French coins approximating in size the later silver five-franc piece.—TRANSLATOR.]

Second Series, Chapter 8

End of Notes

37 of 46

Second Series, Chapter 8

Post Hoc, Ergo Propter Hoc33* 34*


This is the most common and the most deceptive of all fallacies.


Real suffering is taking place in England.


It comes in the train of two other events:

    1. The tariff reform.35*
    2. Two bad harvests in succession.


To which of these last two circumstances is the first to be attributed?


The protectionists have not failed to cry out: "It is this accursed free trade that is causing all the trouble. It promised us no end of blessings, we accepted it, and here the factories have closed, and the people are suffering: Cum hoc, ergo propter hoc."


Free trade distributes in the most uniform and equitable manner the fruits that Providence grants to the labor of man. If some of these fruits are destroyed by a natural disaster, free trade nonetheless ensures the fair distribution of what remains. Men are, no doubt, less well supplied; but should the blame be laid on free trade, or on the natural disaster?


Free trade acts on the same principle as insurance. When a disaster occurs, insurance spreads over a great number of men and a great many years losses that, in its absence, would have had to be borne by one individual all at one time. Now, is one ever justified in saying that fire is no longer a calamity since the introduction of insurance?


In 1842, 1843, and 1844, England began reducing her tariffs. At the same time, her harvests were very abundant; and it is reasonable to conclude that these two circumstances contributed to the unprecedented prosperity that the country enjoyed during this period.


In 1845, the harvest was poor; in 1846, poorer still. As the price of food rose, the people had to spend more of their available resources just to feed themselves, and had to limit their consumption of other commodities accordingly. Clothing was less in demand, factories were not so busy, and wages showed a tendency to decline.


Fortunately, in that same year, the tariff barriers were lowered again, and an enormous quantity of food was able to enter the English market. Otherwise it is almost certain that a frightful revolution would have broken out in Great Britain at that time.


And yet free trade is blamed for disasters that it forestalled and at least partly redressed!


A poor leper was living in solitude. No one wanted to touch anything he had touched. Reduced to providing entirely for himself, he dragged out a miserable existence. One day a great doctor cured him. Now our recluse was able to enjoy all the benefits of free trade. What a beautiful future was opening up before him! He entertained himself by imagining the excellent use which, thanks to his relations with other men, he would now be able to make of his physical strength. But then he had the misfortune to break both his arms. Alas! Now his lot was more dreadful. The journalists of this country, witnessing his misery, said, "Look at what free trade has reduced him to! Really, he was less to be pitied when he lived as a recluse."


"Come now," replied the doctor, "do you take no account of his two broken arms? Have they nothing to do with his sorry plight? His misfortune comes from having lost the use of his arms, and not at all from being cured of leprosy. He would be much more pitiable if he had the use of but one arm and were leprous into the bargain."


Post hoc, ergo propter hoc; put no faith in that sophism.

Notes for this chapter

[Latin, "after this; therefore, on account of it."—TRANSLATOR.]
[Taken from Le Libre échange, December 6, 1846.—EDITOR.]
[In 1846 Parliament had taken the longest step toward introducing free trade by ending the duties on imports of grain.—TRANSLATOR.]

Second Series, Chapter 9

End of Notes

38 of 46

Second Series, Chapter 9

Robbery by Subsidy36*


People are finding my little book of Sophisms too theoretical, scientific, and metaphysical. Very well. Let us try the effect of a trivial, banal, and, if need be, a ruder style of writing. Convinced that the public has been duped into accepting the policy of protectionism, I have tried to prove it by an appeal to reason. But the public prefers to be shouted at. Therefore, let us vociferate:

Midas, King Midas, has the ears of an ass!37*


A burst of plain speaking often works better than the most polished of circumlocutions. You remember Oronte and the difficulty that the misanthrope, utterly misanthropic though he is, has in convincing him of his fatuity.

ALCESTE: One takes the chance of making oneself look ridiculous.
ORONTE: And are you trying to tell me by these words
That I am wrong in wanting .... ?
ALCESTE: I don't say that.
But .....
ORONTE: Do I write badly .... ?
ALCESTE: I don't say that.
But after all ....
ORONTE: But can't I find out just what in my sonnet ....?
ALCESTE: Frankly, you ought to hide it somewhere and forget it.38*


Frankly, dear public, you are being robbed. This may be put crudely, but at least it is clear.


The words robbery, rob, and robber, may appear to many people to be in bad taste. I should ask them, as Harpagon asked Élise: "Is it the word or the thing that makes you afraid?"39*


"Whoever by fraud has taken possession of a thing that does not belong to him is guilty of robbery." (Penal Code, art. 379.)


To rob: To appropriate by stealth or by force. (Dictionary of the Académie française.)


Robber: He who exacts more than his due. (Ibid.)


Now, does not the monopolist who, by means of a law of his own making, makes it necessary for me to pay him twenty francs for what I could buy elsewhere for fifteen, take from me, by fraud, five francs that belong to me?


Does he not appropriate them by stealth or by force?


Does he not exact more than his due?


He does, indeed, it may be said, take; he does appropriate; he does exact; but not at all by stealth or by force, which are the characteristics of robbery.


When our tax accounts contain a charge of five francs for the subsidy that the monopolist takes, appropriates, or exacts, what could be more stealthy, since so few of us suspect it? And for those who are not dupes, what could be more forced, since at the first sign of refusal the bailiff's man is at our door?


Still, the monopolists need have no anxiety on that score. Robberies by subsidy or by tariff, though they violate equity quite as much as highway robbery does, do not violate the law; on the contrary, they are perpetrated by means of the law; this fact only makes them worse, but the magistrates have no quarrel with them.


Besides, willy-nilly, we are all both robbers and robbed in this respect. The author of this volume may well cry, "Stop thief!" when he buys, but people could just as well address the same cry to him when he sells;40* if he differs very much from his fellow countrymen, it is only in the fact that he knows that he loses more at the game than he wins, and they do not; if they knew it, they would soon bring the game to an end.


Nor do I boast of being the first to call this practice by its proper name. Here is what Smith said of it more than sixty years ago:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.41*


Should this surprise us, when the public shows no concern about it? Let us suppose that a council of industrialists is formed and holds a meeting for the purpose of setting a general policy. What takes place, and what decisions are reached?


Here, greatly abridged, are the minutes of the meeting.


"A SHIPOWNER: Our merchant marine is in a desperate situation [outburst of indignation]. No wonder! I can't build without iron. I find plenty of it at ten francs on the world market; but, by law, the French ironmaster compels me to pay fifteen francs for it; so there go five francs that he takes from me. I demand the freedom to buy where I think best.


"AN IRONMASTER: On the world market, I can have freight shipped for twenty francs. By law, the shipowner exacts thirty; so there go ten francs that he takes from me. He plunders me, and I plunder him; everything is as it should be.


"A STATESMAN: The shipowner has come to a most unwise conclusion. Let us, rather, encourage the close harmony that gives us our strength; if we yield even a single point in the theory of protectionism, we may as well say farewell to the whole of it.


"THE SHIPOWNER: But protectionism has failed us; I repeat that our merchant marine is in desperate straits.


"A SHIPMASTER: Very well! Let us raise the surtax, and the shipowner, who is taking thirty francs from the public for their freight, can take forty.


"A CABINET MINISTER: The government will make the utmost possible use of the beautiful mechanism of the surtax, but even that, I am afraid, will not suffice.42*


"A GOVERNMENT OFFICIAL: Here you are, all completely stymied by a minor detail. Is there no salvation except in the tariff? Are you not forgetting taxation? The consumer may be generous, but the taxpayer is no less so. Let us heap taxes upon him, and the shipowner will be content. I propose that a five-franc subsidy be paid to the shipwright out of the public treasury for every quintal of iron he uses.


"CONFUSION OF VOICES: Second the motion! Second the motion!


"A FARMER: A three-franc subsidy per hectoliter of wheat for me!


"A TEXTILE MANUFACTURER: A two-franc subsidy per meter of cloth for me! Etc., etc.


"THE CHAIRMAN: Then it's agreed; our meeting has instituted the system of subsidies, and that shall be its eternal glory. What industry can ever again suffer losses, now that we have two such simple means of converting losses into profits—the tariff and the subsidy? The meeting is adjourned."


Some supernatural intuition must have given me a premonition, in a dream, of the imminent appearance of the subsidy (who knows but that I may even have first suggested the idea to M. Dupin?) when, a few months ago, I wrote the following words:

It seems clear to me that neither the essence nor the consequence of protectionism would in any way be altered if it took the form of a direct tax levied by the state and distributed as subsidies to privileged industries by way of indemnification.


And, after comparing a protective tariff to a subsidy:

I frankly confess my preference for the latter system. It seems to me more just, more economical, and more honest: more just, because if society wants to pay bounties to certain of its members, everybody should contribute to them; more economical, because it will save much of the cost of collection and will eliminate many restrictions; finally, more honest, because the public would then see clearly the nature of the operation and realize what it is being made to do.43*


Let us study this system of robbery by subsidy, since the opportunity for doing so has been so kindly offered to us. What can be said about it is equally applicable to robbery by tariff; and since the latter is a little better disguised, the system of direct pocket-picking will help us to understand the system of indirect pocket-picking. The mind will thus be led from the simple to the complex.


But is there not a type of robbery that is simpler still? Yes, indeed; there is highway robbery; it requires only to be legalized and monopolized, or—as they say today—organized.


Now, here is what I find in a book of travels I have been reading:


When we arrived in the kingdom of A.... , all branches of industry were saying that they were in a doleful state. The farmers were bewailing their lot, the manufacturers were complaining, the merchants were protesting, the shipowners were grumbling, and the government did not know whom to listen to. At first, it had the idea of levying a heavy tax on all the malcontents and then dividing the proceeds among them, after deducting a share for itself, very much on the same principle as that of the Spanish lottery that is so dear to us. There are a thousand of you, and the state takes one piaster from each; then it craftily skims off 250 piasters, and divides the remaining 750, in larger or smaller shares, among the players. The worthy hidalgo who receives three-fourths of a piaster, forgetting that he has contributed a whole piaster, cannot contain himself for joy and rushes off to spend his fifteen reals44* at the nearest pothouse. This would have been something like what is happening in France. Be that as it may, uncivilized though the country was, the government did not think that the inhabitants were so stupid that they could be relied on to accept such strange methods of protection, and so it finally adopted the following plan.


The country was covered with a network of roads. The government had the kilometers marked off on them very exactly, and then it told the farmers: "Everything you can steal from those traveling between these two markers is yours; let it serve as your subsidy, your protection, your incentive." Then it assigned each manufacturer and each shipowner a portion of the road to exploit, according to the following formula:
I give and grant you
Power and authority to
And swindle,
With impunity along this whole


Now, it has come to pass that the natives of the kingdom of A.... have today become so used to this system, so accustomed to taking into account only what they have stolen, and not what is stolen from them, so thoroughly addicted to viewing plunder only from the viewpoint of the plunderer, that they regard the sum total of all individual thefts as gross national profit and refuse to give up a system of protection in the absence of which, they say, there is not a single branch of industry that could fend for itself.


Do you find this hard to believe? It is not possible, you protest, that a whole nation should agree in seeing an increase in wealth in what the inhabitants steal from one another.


And why not? We have completely accepted this view in France, and are continually devising and improving methods of reciprocal robbery under the name of subsidies and protective tariffs.


Still, let us not exaggerate. Let us agree that, with regard to the method of collection and all attendant circumstances, the system of the kingdom of A.... may be worse than ours; but we must at the same time acknowledge that, with respect to the essential principle and its necessary consequences, there is not an iota of difference among all these species of robbery instituted by law to provide additional profits for the various branches of industry.


It should also be observed that, if there are certain inconveniences in the perpetration of highway robbery, it also has advantages that are not to be found in robbery by tariff.


For example, it is possible to make an equitable division of its proceeds among all the producers. The same cannot be done in the case of customs duties. These by their very nature are incapable of protecting certain classes of society, such as artisans, tradesmen, men of letters, lawyers, military personnel, laborers, etc.


It is true that robbery by subsidy also lends itself to infinite subdivision of the proceeds, and in this respect is no less effective than highway robbery; but, on the other hand, it often leads to such bizarre and absurd consequences that the natives of the kingdom of A.... might well regard it as ridiculous. What the victim of a highway robbery loses, the robber gains. The stolen object at least remains in the country. But, under the system of robbery by subsidy, what the tax takes away from the French is often conferred upon the Chinese, the Hottentots, the Kaffirs, or the Algonquins. This is how it works:


Suppose a piece of cloth is worth a hundred francs at Bordeaux. It is impossible to sell it for less without a loss, and it is impossible to sell it for more, because competition among the sellers prevents the price from rising any higher. Under these circumstances, if a Frenchman wants to buy this cloth, he will have to pay a hundred francs or do without it. But if it is an Englishman who wants to buy the cloth, then the government intervenes and tells the merchant: "Sell your cloth; I shall make the taxpayers give you twenty francs." The merchant, who neither demands nor can get more than a hundred francs for his cloth, sells it to the Englishman for eighty francs. This sum added to the twenty francs which robbery by subsidy has extorted makes his account exactly even. The result is, therefore, precisely the same as if the taxpayers had given twenty francs to the Englishman on condition that he buy French cloth at a twenty-franc discount, at twenty francs below the cost of production, at twenty francs below what it would cost us ourselves. Thus, robbery by subsidy has this peculiarity, that its victims live in the country that tolerates it, while the robbers are scattered over the face of the earth.


It is really astonishing that people still persist in considering it as an established truth that everything that the individual steals from the common fund represents a general gain. Perpetual motion, the philosopher's stone, the squaring of the circle, have long since ceased to occupy men's minds; but the theory of progress through robbery is still held in esteem. Yet a priori one might have thought that of all puerilities this was the least likely to survive.


There are those who ask us: "Are you, then, advocating a policy of laissez passer?46* Are you one of the economists of the superannuated school of Smith and Say? Is that why you are opposed to the organization of industry?" Well, gentlemen, organize industry as much as you please. But we, for our part, will take care to see that you do not organize robbery.


Others, more numerous, keep repeating: "Subsidies and tariffs have been allowed to go too far. They must be used with discretion, and not abused. What judicious, practical men advocate is a sensible amount of free trade combined with a moderate amount of protectionism. Let us beware of absolute principles."


This, according to the Spanish traveler, is exactly what was being said in the kingdom of A.... "Highway robbery," the wise men said, "is neither good nor bad in itself; that depends on circumstances. All that needs to be done is to keep things evenly balanced and to pay us government officials well for this labor of balancing. Perhaps pillage has been allowed too much latitude; perhaps it has not been allowed enough. Let us see, let us examine, let us balance the account of each worker. To those who do not earn enough, we shall give a little more of the road to exploit. For those who earn too much, we shall reduce the hours, days, or months during which they will be allowed to pillage."


Those who spoke in this way acquired for themselves a great reputation for moderation, prudence, and wisdom. They never failed to rise to the highest offices in the state.


As for those who said: "Let us eliminate every injustice, for there is no such thing as a partial injustice; let us tolerate no robbery, for there is no such thing as a half-robbery or a quarter-robbery," they were regarded as idle visionaries, tiresome dreamers who kept repeating the same thing over and over again. Besides, the people found their arguments too easy to understand. How can one believe that what is so simple can be true?

Notes for this chapter

[Taken from the Journal des économistes, January, 1846.—EDITOR.]
[A reference to the ancient legend of King Midas, who, after preferring Pan's flute to Apollo's lyre in a musical contest, had a pair of ass's ears clapped on his head by Apollo.—TRANSLATOR.]
[Excerpts from a scene in Molière's Le Misanthrope, in which Alceste, the misanthrope, is trying to tell Oronte, a silly nobleman, that a sonnet of Oronte's is literarily worthless. The problem arises from the fact that Alceste, an upright man, is severely limited by strict rules on his conduct and speech. He is, however, a personal advocate of frankness, so that after several circumlocutions he bursts out with the last line.—TRANSLATOR.]
[In Molière's L'Avare, Harpagon, the miser, asks this question of Élise, his daughter, regarding "marriage."—TRANSLATOR.]
Possessing a farm that provides him with his living, he belongs to the protected class. This circumstance should disarm criticism. It shows that, if he does use harsh words, they are directed against the thing itself, and not against anyone's motives.
[Adam Smith, The Wealth of Nations, Bk. I, chap. x, Pt. II.—TRANSLATOR.]
Here is the text: "May I cite again the tariff laws of the 9th and 11th of last June, whose object is in large part to encourage overseas shipping by increasing on several articles the surtaxes on goods entering under foreign flags. Our tariff laws, as you know, are generally directed toward this end, and, little by little, the surtax of ten francs, established by the law of April 28, 1816, being often insufficient, is disappearing, to give place to.... a form of protection that is more efficacious and more consonant with the relatively high cost of our shipping." (M. Cunin-Gridaine, meeting of December 15, 1845, opening statement.) The expression ".... is disappearing" is really precious!
[Cf. supra, First Series, chap. 5.—EDITOR.]
[This the real de vellón, a base-silver coin, of which there were twenty to the piaster (peso). The real de plata was presumably sterling and valued at one-eighth of a piaster, which consequently was a "piece of eight."—TRANSLATOR.]
[Faithful to his promise to alter his literary style, Bastiat here indulges in a parody of Molière's parody on the conferring of the degree of Doctor of Medicine in his comedy, The Imaginary Invalid (Le Malade imaginaire). Molière says in macaronic Latin: "I give and grant you / Power and authority to / Practice medicine, / Purge, / Bleed, / Stab, / Hack, / Slash, / and Kill / With impunity / Throughout the whole world."—TRANSLATOR.]
[Laissez passer: "allow to pass," substantially equivalent to laissez faire.—TRANSLATOR.]

Second Series, Chapter 10

End of Notes

39 of 46

Second Series, Chapter 10

The Tax Collector


JAMES GOODFELLOW, a Vineyardist.
CLODPATE, a Tax Collector.


CLODPATE: You have laid in twenty tuns of wine?


JAMES GOODFELLOW: Yes, by dint of much toil and sweat.


C.: Be so kind as to give me six of the best.


J.G.: Six tuns out of twenty! Good heavens! You're trying to ruin me. And, if you please, what do you intend to do with them?


C.: The first will be given to the creditors of the state. When one has debts, the very least one can do is to pay the interest on them.


J.G.: And what has become of the principal?


C.: That would take too long to tell. A part of it was once invested in cartridges, which produced the most beautiful smoke in the world. Another part went to pay those who became crippled in foreign lands that they had laid waste. Then, when these expenditures of ours led to an invasion of our land by our good friends, the enemy, they were unwilling to leave without taking away some money, which we had to borrow.


J.G.: And what benefit do I derive from it today?


C.: The satisfaction of saying:

How proud I am to be a Frenchman
When I behold the triumphal column!47*


J.G.: And the humiliation of leaving to my heirs an estate burdened with a rent that they will have to pay for all time to come. Still, one really must pay one's debts, however foolishly the money may have been spent. So much for one tun. But what about the other five?


C.: One is required to pay for government services, the civil list, the judges who see to it that you get back the bit of land your neighbor tries to appropriate for himself, the policemen who drive away robbers while you are asleep, the road mender who maintains the highway leading to the city, the parish priest who baptizes your children, the teacher who educates them, and your humble servant, who does not work for nothing either.


J.G.: That's fair enough. Service for service. I have nothing to say against that. I'd just as soon make my own arrangements directly with my parish priest and my schoolmaster; but I do not insist on it. So much for the second tun. That's still a long way from six.


C.: Do you feel that two tuns are too much for your contribution toward the expenses of the army and the navy?


J.G.: Alas, that's very little, considering what they have cost me already; for they have taken from me two sons, whom I loved dearly.


C.: It is absolutely essential to maintain the balance of power in Europe.


J.G.: Good heavens! The balance of power would be quite as well maintained if the armed forces of every country were reduced by one-half or three-fourths. We should then be able to keep our children and the fruits of our labor. It would take no more than mutual understanding.


C.: Yes; but that is precisely what is lacking.


J.G.: That is what astonishes me. After all, everybody suffers from it.


C.: You have only yourself to blame, James Goodfellow.


J.G.: You are joking, Mr. Tax Collector. Do I have any voice in the matter?


C.: Whom did you support for deputy?


J.G.: A gallant army general who will soon be a marshal if God spares him.


C.: And what does this gallant general live on?


J.G.: My tuns, I presume.


C.: And what would happen to him if he voted for a reduction in the army and in your share of the tax?


J.G.: Instead of being made a marshal, he would be obliged to retire.


C.: So you understand now why you have only yourself....


J.G.: Let's go on to the fifth tun, if you please.


C.: That one goes off to Algeria.


J.G.: To Algeria? And yet we are assured that all Moslems are averse to wine-drinking, the savages! I have often wondered whether they know nothing of Médoc because they are infidels, or whether, as is more likely, they are infidels because they know nothing of Médoc. Besides, what services do they perform for me in exchange for this nectar that has cost me so much labor?


C.: None; but, then, it is not intended for Moslems, but for some good Christians who spend all their time in Barbary.


J.G.: And what do they do there that could be useful to me?


C.: They carry out raids, and are attacked in their turn by raiders; they kill and are killed; they catch dysentery, and come home to be cured; they dredge harbors, open up roads, build villages and people them with Maltese, Italians, Spaniards, and Swiss, who will live off your tun and many another that I'll come back to ask you for.


J.G.: Heaven help me! This is too much. I flatly refuse to give you my tun. Any vineyardist who would be guilty of such folly would be sent to Bicêtre.48* Open up roads through the Atlas Mountains—good God! When I cannot leave my own farm for lack of a road! Dredge harbors in Barbary, when the Garonne is silting up all the time! Deprive me of my beloved children and send them to harass the Kabyles!49* Make me pay for houses, seed, and horses to be handed over to the Greeks and the Maltese, when there are so many poor people right here at home!


C.: The poor! That's just it; we are relieving the country of this surplus population!


J.G.: To be sure, by sending after them to Algeria the funds that would support them here!


C.: And then you are laying the foundations of a great empire; you are bringing civilization to Africa; you are crowning your fatherland with immortal glory.


J.G.: You are a poet, Mr. Tax Collector; but I am just a vineyardist, and I refuse.


C.: Just think that in a few thousand years you will get back your investment a hundredfold. That is what those who have charge of the enterprise are saying.


J.G.: Meanwhile, they first asked for only a puncheon of wine to defray the expenses, then two, then three, and here I am being taxed a whole tun!50* I persist in my refusal.


C.: It is too late for that. Your legislative representative has agreed that your share of the tax shall be one tun or four full puncheons.


J.G.: That is but too true. What confounded weakness on my part! It seemed foolish to me, too, to choose him to represent me, for what can there be in common between an army general and a poor vineyardist?


C.: You see very well that you do have something in common, were it only the wine that you are laying in and that he is voting himself in your name.


J.G.: You may well laugh at me, Mr. Tax Collector; I deserve it. But be reasonable. Leave me at least the sixth tun. The interest on the national debt has been paid, the civil list provided for, the government services assured, and the war in Africa extended into perpetuity. What more do you want?


C.: You won't get anywhere haggling with me. You should have told the general your desires. Now he has disposed of your vintage.


J.G.: Damned Bonapartist relic! But what do you expect to do with this poor tun, the best of my stock? Come, just taste this wine. How mellow it is, how rich, how full-bodied, how smooth, how choice!


C.: Excellent! Delicious! It will be just to the taste of M. D.... , the textile manufacturer.


J.G.: Of M. D...., the manufacturer? What do you mean?


C.: That he'll make good use of it.


J.G.: In what way? What are you talking about? Devil take me if I understand you!


C.: Don't you know that M. D.... has started a splendid establishment which, though highly useful to the country, still incurs a considerable financial loss every year?


J.G.: My heart bleeds for him. But what can I do about it?


C.: The Chamber has come to the conclusion that if things go on like this, M. D....will either have to operate more efficiently or close his mill.


J.G.: But what do the ill-advised and unprofitable business ventures of M. D....have to do with my tun of wine?


C.: The Chamber thought that if it turned over to M. D.... a little wine from your cellar, a few hectoliters of wheat from your neighbors, and one or two sous cut from the workers' wages, his losses might be converted into profits.


J.G.: The recipe is as infallible as it is ingenious. But confound it! It is terribly unfair. What! Is M. D.... to recoup his losses by taking my wine from me?


C.: Not exactly the wine, but its price. This is what we call an incentive subsidy, or bounty. But you look so amazed! Do you not see what a great service you are rendering to your fatherland?


J.G.: You mean to M. D....?


C.: To the fatherland. M. D....assures us that, thanks to this arrangement, his business is flourishing; and this, he says, is how the country is enriched. That is what he has been saying recently in the Chamber, of which he is a member.


J.G.: It's an outright fraud! What! Some incompetent goes into a foolish enterprise and dissipates his capital; and if he can extort enough wine or wheat from me to make good his losses and even to leave him a profit besides, this is regarded as a gain for the whole country!


C.: Since your representative has come to that conclusion, you have no choice but to hand over to me the six tuns of wine and sell the fourteen tuns that I leave you for as good a price as you can get.


J.G.: That is my business.


C.: The thing is, you see, that it would be most regrettable if you did not get a high price for them.


J.G.: I shall see to that.


C.: For there are many things that this price must take care of.


J.G.: I know, sir. I am aware of that.


C.: In the first place, if you buy iron to make new spades and plows, a law decrees that you shall pay the ironmaster twice what it is worth.


J.G.: But is not this precisely what happens in the Black Forest?51*


C.: Then, if you need oil, meat, cloth, coal, wool or sugar, each by law will cost you twice what it is worth.


J.G.: But this is horrible, frightful, abominable!


C.: What good are these complaints? You yourself, through your legally authorized representative . . . .


J.G.: Leave my representative out of this. I have made a strange choice, it is true. But I will not be imposed upon again, and I shall be represented by some good, honest peasant.


C.: Bah! You'll re-elect the gallant general.


J.G.: I re-elect the general, to have my wine distributed among Africans and manufacturers?


C.: You will re-elect him, I tell you.


J.G.: That's going a little too far. I will not re-elect him if I do not want to.


C.: But you will want to, and you will re-elect him.


J.G.: Just let him come here and try for election. He will soon see whom he has to deal with.


C.: Well, we shall see. Farewell. I am taking your six tuns and am going to distribute them as the general has decided.52*

Notes for this chapter

[An adaptation from a popular song, author unknown. The "column" refers to the Vendôme Column standing in the heart of Paris, made from the brass of the cannons captured by Napoleon at the Battle of Austerlitz in 1805.—TRANSLATOR.]
[Village near Paris containing the best-known insane asylum in France.—TRANSLATOR.]
[A Berber people of Algeria and Tunisia.—TRANSLATOR.]
[The puncheon was a varying measure, but it might take four to make a tun of 252 gallons.—TRANSLATOR.]
[There tribute was often exacted from the unwary traveler.—TRANSLATOR.]
[Cf., in Vol. I (of the French edition), the "Letter to M. Larnac," and, in Vol. V (of the French edition), "Parliamentary Inconsistencies."—EDITOR.]

Second Series, Chapter 11

End of Notes

39 of 46

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