Who Loves Bastiat and Who Loves Him Not
By Bryan Caplan
Thanks to everyone who responded to my query about Bastiat’s “What Is Seen and What Is Not Seen.” For me, his essay is the pinnacle of economic profundity. You can call it obvious. But when I first started learning economics at the age of 17, none of Bastiat was obvious. I was an honors student at a well-regarded California high school. Yet as far as I can remember, I had never heard any argument against the minimum wage, Social Security, or the FDA in my entire life.
Every teacher and book I ever encountered treated naive populism like the Law of Gravitation. Evil businesses aren’t paying workers enough? Raise the minimum wage; problem solved. The elderly are poor? Increase Social Security payments; problem solved. Evil businesses are selling people bad drugs? Impose more government regulation; problem solved.
If you favor these programs, you can call these arguments straw men. But I assure you: These “straw men” were never presented by opponents of these policies. On the contrary, these “straw men” were invariably presented by people who favored these policies. How is that possible? Because during my first 17 years of life, I never encountered an opponent of any of these policies! You might assume I was grew up in a weird Berkeley-esque leftist enclave, but bland Northridge, California hardly qualifies.
What was going on? The best explanation is pretty simple: I only heard straw man arguments in favor of populist policies because virtually everyone finds these straw man arguments pleasantly convincing. Regardless of the merits of the minimum wage, Social Security, and the FDA, economic illiteracy is the reason for their popularity. If someone like Bastiat convinced people that the pleasantly convincing arguments are inane, proponents would have to fall back on arguments that are intellectually better yet rhetorically inferior.
Take the minimum wage. Normal people like it because the government waves a magic wand and makes mean employers give helpless workers extra money, with zero blowback. So inane, yet so convincing to a psychologically normal human. An intellectually serious argument, in contrast, begins by conceding the theoretical possibility of a disemployment effect, then defends low estimates of labor demand elasticity. This is a huge improvement in intellectual substance, yet persuades only wonks.
This is the real root of Bastiat’s differential ideological appeal. Friends of the free market love him because Bastiat destroys the inane arguments that make the modern welfare state popular. Once you deprive the median voter of these inane arguments, friends of the modern welfare state have to resort to intellectually serious arguments to make their case. Alas, these arguments are utterly beyond the median voter’s comprehension. Most college students can’t even grasp them.
So what are friends of the modern welfare state to do when confronted with Bastiat? They can’t really argue with him. They know what he says is largely true. Yet if they make a big deal out of Bastiat, they risk destroying popular support for the policies they favor. Sure, they could run a big economic education campaign to explain, “Stop making terrible arguments for great policies. The intellectually serious arguments are as follows… Blah blah blah.” But what’s the point? It’s far easier to trivialize Bastiat – to pretend that everyone (or “everyone who counts”) already knows what Bastiat’s trying to teach. If you only discuss policy with your fellow wonks, this pretense might even convince you.
My thesis, however uncharitable, is entirely consistent with friends of the welfare state being correct. Maybe trivializing Bastiat is the Noble Lie that has to be told to keep the welfare state alive. Maybe. But ponder this: Suppose I’m right that almost everyone initially supports populist policies for inane reasons. If some of these people grow up to be sophisticated intellectuals, what do you think they’re going to do when they realize that the arguments that originally convinced them are just plain stupid? Are they going to dispassionately put aside the worldview that inspired them to become intellectuals in the first place, then calmly weigh the intellectually serious arguments for and against every feel-good policy on the books? Or are they going to act like defense attorneys – to use their powerful intellects to zealously defend the populist policies they’ve always loved?