David M. Hart, Editor's Introduction to "What Price Pride? On the Hidden Costs of Economic Illiteracy"

This month Anthony de Jasay reflects upon the way in which the stubborn pride of farmers and the economic illiteracy of consumers add to the hidden cost of food in Europe. It reminds me of the similar arguments made by the great 19th century free trade advocate, Frédéric Bastiat, in his subtle essay "What is Seen and What is Not Seen" over 150 years ago. What is "seen" is the massive subsidies to European farmers which results in the continued population of the European countryside, the psychological well-being this brings many people who fear the effects of urbanization, and the sense of security of knowing that Europe is "self-sufficient" in food. What is "not seen" is the misallocation of resources and the "missing" economic output which would have resulted had these resources been invested elsewhere than in agriculture. Bastiat was an excellent popularizer of economic ideas and his book Economic Harmonies (1851) and Selected Essays in Political Economy are still worth reading.

In the 19th century, before democracy had taken deep root, countries like Britain could unilaterally "declare" free trade (as with the abolition of the Corn Laws in 1846), or they could enter into bilateral free trade agreements (as with the Cobden-Chevalier Treaty between France and Britain in 1860) without taking too much heed of electoral politics. As Jasay notes, today nations have to undergo torturous negotiations over many years (the "Uruguay Round" of trade talks) to achieve minimal advances towards freer trade. Given the political power of European farmers in their home countries it is not clear how this situation can change in the near future.

David M. Hart

Additional Readings

Websites

The World Trade Organisation, Uruguay Round - http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact5_e.htm

The Australian Department of Foreign Affairs and Trade Doha Round Development Agenda - http://www.dfat.gov.au/trade/negotiations/index.html

Annuaire Eurostat 2002. URL http://www.datashop.org/en/publications/yearbook2.html

Centre d'etudes prospectives et d'informations internationals (CEPII), Paris. URL http://www.cepii.fr/anglaisgraph/news/accueilengl.htm

Bibliography

Frédéric Bastiat, "What is Seen and What is Not Seen" online at Econlib at http://www.econlib.org/library/Bastiat/BasEss1.html

Frédéric Bastiat, Economic Harmonies (1851) - online at Econlib at http://www.econlib.org/library/Bastiat/basHar.html

Frédéric Bastiat, Selected Essays in Political Economy - online at Econlib at http://www.econlib.org/library/Bastiat/basEss.html

Sheldon Richman, "Frederic Bastiat: An Annotated Bibliography" - http://www.econlib.org/library/Bastiat/BastiatBib.html

Douglas A. Irwin, Against the Tide: An Intellectual History of Free Trade (Princeton University Press, 1996).

Douglas A. Irwin, "A Brief History of International Trade Policy" - online at Econlib - http://www.econlib.org/library/Columns/Irwintrade.html

* David M. Hart is Director of the Online Library of Liberty Project.

For more articles by David M. Hart, see the Archive.