Revisiting Frédéric Bastiat

Frédéric Bastiat

Frédéric Bastiat

The Wisdom of Frédéric Bastiat:

“Once the legislator is placed at this incommensurable distance from other men, and believes, in all conscience, that he can dispose of their time, their labor, and their transactions, all of which are their property, what man in the whole country has the least knowledge of the position in which the law will forcibly place him and his line of work tomorrow? And, under such conditions, who can or will undertake anything?”

“What must be the consequence of all this? Capital and labor will be frightened; they will no longer be able to count on the future. Capital, under the impact of such a doctrine, will hide, flee, be destroyed. And what will become, then, of the workers, those workers for whom you profess an affection so deep and sincere, but so unenlightened? Will they be better dressed when no one dares to build a factory? Will they have more employment when capital will have disappeared?”

“Whereas the legislator’s principle involves virtual slavery, the economists’ principle implies liberty. Property, the right to enjoy the fruits of one’s labor, the right to work, to develop, to exercise one’s faculties, according to one’s own understanding, without the state intervening otherwise than by its protective action—this is what is meant by liberty. And I still cannot understand why the numerous partisans of the systems opposed to liberty allow the word liberty to remain on the flag of the Republic.”

“Let us never forget that, in fact, the government has no resources of its own. It has nothing, it possesses nothing that it does not take from the workers. When, then, it meddles in everything, it substitutes the deplorable and costly activity of its own agents for private activity.”

Frederic Bastiat (1801-1850) was a French economist and legislator who devoted himself to the promotion and protection of Liberty. The ideas and ideals expressed in his writings are as relevant today as they were when they were written over 160 years ago. So many of the large problems that we face today as a nation could have been avoided if we had not ignored the ideas of such great thinkers as Adam Smith, or Edmund Burke, or the subject of this post, Frederic Bastiat.

I have added a new page devoted to a slightly excerpted version of Bastiat’s essay on Property and Law, which I encourage everyone to link to here.

The United States: Too Big to Fail?

It was reported yesterday that the Federal Reserve will begin requiring the largest banks to hold additional levels of safe assets to avoid failure during future periods of market stress. If these banks do not currently have enough capital in reserve to withstand the next financial shock then the Fed’s action would seem to be a prudent thing.

But then, if this sort of good economic planning applies to the banking system, then why does it not apply to the public sector? Actually it does, so why don’t Americans demand it? The federal government now owes $17 trillion in debt and borrows about 40 cents of every dollar that it spends. At present, Americans are so confused by media propaganda that they do not seem willing to force the federal government to operate within its means. If this situation continues much longer it will spell sure disaster for our future.

As the federal government gets deeper and deeper into debt and as interest rates begin to rise, it will become increasingly difficult to fund the entitlement programs that Americans have become so dependent on, things  like Medicaid, Medicare, food stamps, Disability, Social Security and the like. These programs will have to be drastically reduced at some point in the not too distant future. This has already happened in many parts of Europe contra the will of the people. No matter how you look at it there will be a lot of pain to come and it will happen right here in the USA. Very few will escape it.

The Future: "They promised that if I voted for them that the government would take care of me..."

The Future:
“They promised that if I voted for them that the government would take care of me…”

At the micro level, mature adults understand that in order to run a sustainable household they have to live within their means and save for future emergencies. The Federal Reserve is applying this same good sense by requiring big banks to shore up their reserves so that they may survive the next financial shock. The bigger question is who is going to hold our bloated federal government to the same economic standard? Every time a patriot speaks out about fiscal irresponsibility in Washington, they are harassed by the IRS  or labeled a right-wing racist by the friends of big government.

Until average folks begin to face reality and muster the courage to stand up to these advocates of big government, America will continue on a path of decline. The media campaign that has been aimed at discrediting fiscal conservatives has done our country a great disservice. It’s not a Republican vs. Democrat issue. We are getting awfully close to the precipice.

If one is able to look beyond the inappropriately dry language of the Government Accountability Office’s 2012 report, it becomes very clear that our federal government’s future is in peril as will be the futures of everyone who depends on it:

“During the last 4 fiscal years, total federal debt has increased by $6,048 billion, or 60 percent….

“Increasing numbers of baby-boom generation members are becoming eligible for Social Security retirement benefits and for Medicare. In addition, although health care spending growth recently slowed, it has been growing faster than the overall economy and is expected to continue to grow at an increased rate as more members of the baby-boom generation retire and become eligible for federal health programs. The aging of the population and rising health care costs will continue to put upward pressure on spending and, absent action to address the growing imbalance between spending and revenue, the federal government faces an unsustainable growth in debt.” (GAO report number GAO-13-114 released November 8, 2012 – a publication of the U. S. Government)

GAO does not offer solutions. Friends of big government will continue to pretend that raising taxes will solve the problem. Government run schools will raise yet another generation that is ignorant of basic economics and continue to glorify a wasteful, corrupt government. The people with the foresight and courage to warn against the coming financial meltdown will continue to be called fools and racists.

While promises of government benevolence and the redistribution of private wealth enriches unscrupulous politicians, it will lead to disaster for everyone else.

Other than that; have a nice day!

Americanus

PS This outcome is not pre-determined. Get involved in politics. Persuade your friends. Do it now.

 

TOCQUEVILLE vs. LIBERALISM

A friend of mine recently complained that the reason the American dream has become so hard to obtain is because too many Americans selfishly “gun for themselves” at the expense of other Americans who are merely struggling to make ends meet.  She says this is why we need to re-elect President Obama and other Liberals who simply want the rich to pay their “fair share” so that common folks can get things like a “living wage,” affordable health insurance, food stamps, extended unemployment benefits, or subsidies for a college education. This liberal friend of mine like so many liberals puts her faith in the promise of an all-powerful, benevolent central government, run by Democrats and liberals, of course. Let’s begin by examining my friend’s premise of the prevalence of selfish individualism. Perhaps her view is not quite accurate.

Let’s put aside the current state of affairs for the time being, we can have a look at that later. First, let’s look at the assumed existence of selfish individualism in America’s past. Surely it must have existed prior to the assent of the federal government during Roosevelt’s New Deal in the 1930’s. If that’s true, how did the people of our nation get along for the first 150 years? I have confidence there is ample evidence in the historical record that shows that a widespread state of selfish individualism never existed at all. In fact, just the opposite is true.

I refer you to the observations of a Frenchman named Alexis de Tocqueville. Tocqueville was a French aristocrat who came officially to the U.S. in 1831 to study the American penal system. What he observed during his travels around the United States inspired him to do much more than just report on the American justice and prison system. Shortly after returning to France Tocqueville published his two-part masterpiece Democracy in America. It is one of the most insightful and descriptive works ever written on the state of and essence of American Democracy.

One thing Tocqueville noticed that set America apart from other nations was the prevalence of voluntary associations among the people.

“Americans of all ages, all conditions, and all dispositions constantly form associations. They have not only commercial and manufacturing companies, in which all take part, but associations of a thousand other kinds, religious, moral, serious, futile, general or restricted, enormous or diminutive. The Americans make associations to give entertainments, to found seminaries, to build inns, to construct churches, to diffuse books, to send missionaries to the antipodes; in this manner they found hospitals, prisons, and schools. If it is proposed to inculcate some truth or to foster some feeling by the encouragement of a great example, they form a society.”

While leading Liberals often intentionally blur the distinction between government action and voluntary private action by using phrases like “it takes a village,” or “you didn’t build that,” Tocqueville distinguished between these two different forms of action.

“Wherever at the head of some new undertaking you see the government in France, or a man of rank in England, in the United States you will be sure to find an association.”

“Thus the most democratic country on the face of the earth is that in which men have, in our time, carried to the highest perfection the art of pursuing in common the object of their common desires and have applied this new science to the greatest number of purposes.”

Tocqueville’s observation of the prevalence of voluntary associations in America shatters the myth of selfish individualism in America prior to the New Deal that so many liberals claim made and continues to make government-run social programs necessary. It was not a widely held view in early America that all worthy outcomes required the determined and organized action of the central government. As we shall see later, just the opposite was true.

One of the basic differences between modern day conservatives and their liberal counterparts is the view of the role of the federal government. Conservatives generally believe like Tocqueville that private associations are preferable to the coercive action of centralized governments. Modern day Liberals turn to the central government whenever they see a problem that exists. While Liberals generally distrust institutions like corporations and religious organizations, they somehow put their full faith in government as though somehow government intentions are always pure and immune to the shortcomings of its stewards. Conservatives, like many of the founding fathers, generally mistrust the central government and believe that often big-government solutions create more unintended consequences that are worse than the original problem. Conservatives generally believe that the people closest to the challenges are better judges of the efforts needed to achieve the desired results. Federal help is less efficient, wasteful, prone to systemic corruption, less nimble, more costly, and almost always comes with strings attached. The federal government is currently $16 trillion in debt with no relief in sight and yet Liberals claim that this government needs to do more. We must not be getting a good bang for the buck if we still have all these problems that need to be solved even though we have already spent trillions of dollars on social programs and remain $16 trillion in debt.

Tocqueville continued:

A government might perform the part of some of the largest American companies, and several states, members of the Union, have already attempted it; but what political power could ever carry on the vast multitude of lesser undertakings which the American citizens perform every day, with the assistance of the principle of association?

In democratic countries the governing power alone is naturally in a condition to act in this manner, but it is easy to see that its action is always inadequate, and often dangerous. A government can no more be competent to keep alive and to renew the circulation of opinions and feelings among a great people than to manage all the speculations of productive industry.

No sooner does a government attempt to go beyond its political sphere and to enter upon this new track than it exercises, even unintentionally, an insupportable tyranny; for a government can only dictate strict rules, the opinions which it favors are rigidly enforced, and it is never easy to discriminate between its advice and its commands.”

Clearly Tocqueville felt that the central government could not effectively do what individuals could do for themselves by acting in concert through private associations. Furthermore, the central authority would become tyrannical through coercive measures; a consequence that he admits may be “unintentional,” yet “insupportable.”

So this idea that the central authority in Washington is solely equipped to solve this nation’s problems is simply not true. Tocqueville’s observations clearly demonstrate that prior the increase and consolidation of the federal power in America in the 20th century it was commonplace for private citizens to take on and solve problems of all kinds through united efforts organized by voluntary associations. The view that Americans are a selfish lot and are only out to “gun for themselves” is bogus and yet it is a view that is unfortunately held by too many Americans like my friend. Hence the popularity of Occupy Wall Street. It is a lie perpetuated by those who seek more power over our lives and this always comes at the expense of our liberties.

Americans are some of the most generous people on the face of the Earth. It’s time to deemphasize the role of the central government in Washington so that we can begin to restore America to the greatness that Tocqueville recognized. Charity, good deeds and problem solving can be collectivized on a national scale, but are generally much more effective and less likely to bankrupt the nation when left to the people.

That’s all for now. In a future post we will examine how centralized entitlement and welfare states corrupt society.

Canutus