with Sarah Skwire

For hundreds of years, authors of economic treatises and textbooks have begun their analysis with a discussion of the economics of the isolated individual. Often, they choose the protagonist of Daniel Defoe’s novel Robinson Crusoe as their metaphor or model to undertake this analysis. We are asked to imagine Crusoe stranded on his otherwise deserted island, having to decide how best to provision himself for the present and future. Especially in more modern versions, Crusoe’s situation is framed as an allocation problem, where he must figure out how to maximize the value of all the resources on the island given the various ends he wants to satisfy. The economics of the isolated individual is then contrasted with more realistic models in which exchange takes place. Both Rousseau, in his Treatise on Natural Education, and Rothbard, in his Man, Economy and State, give us this kind of Crusoe, whom they each describe as being without any “equipment” from the outside world. 

The use of Crusoe examples and models was more common in the late 18th and 19th century than it is today. A use of Robinson Crusoe that is more faithful to Defoe’s novel that Rousseau’s and Rothbard’s can be found in Economic Harmonies by the French liberal economist Frederic Bastiat writing in the 1840s. In his chapter “Exchange,” Bastiat uses Crusoe in the way most economists have done, as an illustration of the limits of isolation and the benefits of exchange. Bastiat however points out that even Defoe implicitly admits the importance of exchange and the division of labor through the plot device of stranding Crusoe with various objects from the shipwreck.


Bastiat notes that Defoe originally wanted to leave Crusoe with absolutely nothing, but quickly realized there would be no way for him to survive absent all traces of civilization. As a result, Defoe has Crusoe salvage an impressive array of goods from the shipwreck that strands him. A partial list includes: clothing; a knife; a pipe and tobacco; a raft built from salvaged wood; bread; rice; cheese; dried meat; corn [a general term for grain]; arrack and cordial waters; a carpenter’s chest full of tools; guns, shot, and powder; swords; saws; an ax; a hammer; nails and spikes; screw jacks for lifting heavy objects; hatchets; a grindstone; crowbars; two barrels of bullets; muskets and fowling pieces; sailcloth; a hammock and bedding; pen, paper, and ink; compasses; navigation tools and books; Bibles and a Catholic prayer book; a cat and dog; rigging; canvas; rum; sugar; flour; cables and hawser; ironwork; razors; scissors; and silverware. In contrast to the Crusoe stories we find in economics, there was no need for Crusoe to sacrifice much at all to create capital goods, as he came to the island endowed with them. As Bastiat frames it, the salvaged supplies are “decisive evidence that society is man’s necessary milieu, since even a novelist cannot make him live outside of it.” None of those objects could have possibly been made by Crusoe alone, therefore even in his physical isolation on the island, he still carries with him the benefits of exchange within society. 


By being more true to the novel, Bastiat does not need to rely on the arrival of Friday to illustrate the importance of exchange. Instead, he points out that Crusoe brings the benefits of exchange with him to the island in the form of the salvaged goods. Later writers wished to more clearly separate the isolated Crusoe from the benefits of exchange that they present as made possible only by Friday’s arrival. Bastiat argues that it is nearly impossible to even conceive of an individual surviving without implicitly assuming that exchange (even if only exchange that has taken place in the past, before Crusoe’s shipwreck) with other humans already exists.

Bastiat drives this point home even more firmly by pointing out that Defoe has Crusoe arrive on the island with a “social treasure worth a thousand times more” than the remains of the wreck. Bastiat here refers to Crusoe’s “ideas, his memories, his experience, and especially his language,” all of which take for granted society and exchange. The Robinson Crusoe of Defoe’s novel was not completely isolated from society and exchange in the way economists later assumed him to be in order to illustrate the economics of isolation. So when later writers, including modern textbook writers, use Crusoe to explain how even an isolated human has to allocate his limited resources among various possible uses, they must either implicitly assume the pre-existence of exchange by virtue of their description of Crusoe, or they must do violence to the novel by making Crusoe even less human and more isolated than Defoe thought was plausible. They must deny those precious advantages of culture and experience that Bastiat praises.

Caught, as so many writers and philosophers have been, by the narrative possibilities of a man in isolation, the economists who use Crusoe often use a version of his story that suits their purposes more than it reflects the contents of Defoe’s tale. This is entirely understandable. Crusoe is, and has been for so long, such a popular story and such a powerful cultural trope that we feel we know it even before we have read it. But no matter how understandable, it is unfortunate that the imagined Crusoe has overwhelmed Defoe’s Crusoe–the Crusoe that Bastiat uses so vividly.