HOW WE GET THE GOVERNMENT TO DO OUR DIRTY WORK

"The protectors of our industries". Cartoon showing Cyrus Field, Jay Gould, Cornelius Vanderbilt, and Russell Sage, seated on bags of "millions", on large heavy raft being carried by workers. (from here)
“The protectors of our industries”. Cartoon showing Cyrus Field, Jay Gould, Cornelius Vanderbilt, and Russell Sage, seated on bags of “millions”, on large heavy raft being carried by workers. (from here)

Were the gentlemen pictured above robber barons? I am not in a position to say. I just think that if we changed the names and faces that cartoon would be even more relevant today.

Frédéric Bastiat was a first-rate satirist of Crony Capitalism. Here is an example from Essays on Political Economy.

M. Prohibant (it was not I who gave him this name, but M. Charles Dupin) devoted his time and capital to converting the ore found on his land into iron. As nature had been more lavish towards the Belgians, they furnished the French with iron cheaper than M. Prohibant; which means, that all the French, or France, could obtain a given quantity of iron with less labour by buying it of the honest Flemings. Therefore, guided by their own interest, they did not fail to do so; and every day there might be seen a multitude of nail-smiths, blacksmiths, cartwrights, machinists, farriers, and labourers, going themselves, or sending intermediates, to supply themselves in Belgium. This displeased M. Prohibant exceedingly.

At first, it occurred to him to put an end to this abuse by his own efforts: it was the least he could do, for he was the only sufferer. “I will take my carbine,” said he; “I will put four pistols into my belt; I will fill my cartridge box; I will gird on my sword, and go thus equipped to the frontier. There, the first blacksmith, nail-smith, farrier, machinist, or locksmith, who presents himself to do his own business and not mine, I will kill, to teach him how to live.” At the moment of starting, M. Prohibant made a few reflections which calmed down his warlike ardour a little. He said to himself, “In the first place, it is not absolutely impossible that the purchasers of iron, my countrymen and enemies, should take the thing ill, and, instead of letting me kill them, should kill me instead; and then, even were I to call out all my servants, we should not be able to defend the passages. In short, this proceeding would cost me very dear, much more so than the result would be worth.”

M. Prohibant was on the point of resigning himself to his sad fate, that of being only as free as the rest of the world, when a ray of light darted across his brain. He recollected that at Paris there is a great manufactory of laws. “What is a law?” said he to himself. “It is a measure to which, when once it is decreed, be it good or bad, everybody is bound to conform. For the execution of the same a public force is organised, and to constitute the said public force, men and money are drawn from the whole nation. If, then, I could only get the great Parisian manufactory to pass a little law, ‘Belgian iron is prohibited,’ I should obtain the following results:–The Government would replace the few valets that I was going to send to the frontier by 20,000 of the sons of those refractory blacksmiths, farriers, artizans, machinists, locksmiths, nail-smiths, and labourers. Then to keep these 20,000 custom-house officers in health and good humour, it would distribute among them 25,000,000 of francs taken from these blacksmiths, nail-smiths, artizans, and labourers. They would guard the frontier much better; would cost me nothing; I should not be exposed to the brutality of the brokers; should sell the iron at my own price, and have the sweet satisfaction of seeing our great people shamefully mystified. That would teach them to proclaim themselves perpetually the harbingers and promoters of progress in Europe. Oh! it would be a capital joke, and deserves to be tried.”

So M. Prohibant went to the law manufactory. Another time, perhaps, I shall relate the story of his underhand dealings, but now I shall merely mention his visible proceedings. He brought the following consideration before the view of the legislating gentlemen.

“Belgian iron is sold in France at ten francs, which obliges me to sell mine at the same price. I should like to sell at fifteen, but cannot do so on account of this Belgian iron, which I wish was at the bottom of the Red Sea. I beg you will make a law that no more Belgian iron shall enter France. Immediately I raise my price five francs, and these are the consequences:–

“For every hundred-weight of iron that I shall deliver to the public, I shall receive fifteen francs instead of ten; I shall grow rich more rapidly, extend my traffic, and employ more workmen. My workmen and I shall spend much more freely, to the great advantage of our tradesmen for miles around. These latter, having more custom, will furnish more employment to trade, and activity on both sides will increase in the country. This fortunate piece of money, which you will drop into my strong-box, will, like a stone thrown into a lake, give birth to an infinite number of concentric circles.”

Charmed with his discourse, delighted to learn that it is so easy to promote, by legislating, the prosperity of a people, the law-makers voted the restriction. “Talk of labour and economy,” they said, “what is the use of these painful means of increasing the national wealth, when all that is wanted for this object is a decree?” (from here)

Was the law that M. Prohibant had passed to protect the profitability of his mines a bad law? Bastiat goes on to explain that it was. So if M. Prohibant’s idea strikes you as fine and excellent, please click on the link and read about the consequences of M. Prohibant’s law.

What is the lesson here? We like to blame others, but we have a republic. By themselves robber barons cannot gain the passage of restrictive trade legislation. By themselves they don’t have enough votes.

Consider.  Was M. Prohibant the only gainer from the law he proposed? Like M. Prohibant we each tend to think the laws we benefit from are good. It is the law that other people use to restrict us that we dislike. It is that self-interest that our leaders use to pit us against each other. It is that self interest that allows robber barons to buy our leaders. Instead of electing honorable men and women who refuse to be bought, we elect people who give us what we want.

What we need to do is consider the laws we want from the point of view of others. If what we want is intended only to help “me”, then we are not being neighborly. We are just being selfish.

Jesus gave us a challenging assignment.

John 15:12-14 New King James Version (NKJV)

12 This is My commandment, that you love one another as I have loved you. 13 Greater love has no one than this, than to lay down one’s life for his friends. 14 You are My friends if you do whatever I command you.

How do we love one another as Jesus loved? We can debate that, but is it not safe to say we should not use the law to gain privileges from each other that we do not deserve?

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3 thoughts on “HOW WE GET THE GOVERNMENT TO DO OUR DIRTY WORK

  1. Stephen

    Robber barons were able to rob because there was a lack of laws, not laws protecting them. The abdication of the government’s duty to protect the rights of workers allowed the barons to offer so little for wages and thus retain more profit for themselves. The tariffs on foreign goods were helpful as well, giving them massive monopolies on practically all industries.

    Now you object to businessmen attempting to use any means at their disposal to advance their gains. Is not M. Prohibant’s argument the exact same as the economists who believe that ensuring the top grows will ensure the bottom grows? Would you then restrict the market from applying to the government for certain protections it deems necessary to advance the growth of the few for the eventual benefit of all?

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  2. @Stephen

    It appears you are just trying to find fault. Yet it is not clear what fault you think you have found. The point of the above example is that we should not use government to gain unfair advantages over others, such as by eliminating perfectly legitimate competition. The post is most certainly not an argument against laws that protect our rights.

    The term robber baron derives from the Raubritter (robber knights), the medieval German lords who charged nominally illegal tolls (unauthorized by the Holy Roman Emperor) on the primitive roads crossing their lands or larger tolls along the Rhine river — all without adding anything of value, but instead lining their pockets at the cost of the common good (rent seeking). (from => https://en.wikipedia.org/wiki/Robber_baron_(industrialist))

    Those first robber barons added nothing of value. They just took advantage of people who needed to cross “their land.” That sort of behavior is why we have eminent domain laws.

    In a free society, there are some businesses (like public utilities) that most people agree have to be regulated so that they do not gouge their customers. For the most part, however, unless the government gives a business inappropriate advantages, most business have trouble growing beyond a certain size. The problem is that the bigger a business gets the more difficult it is to manage.

    Government has the same issue, of course. That is why we are in agreement on at least one thing, I think. To the extent possible, the business of government should be done first at the local, then at the state level, and then finally, because it is the only option that will work, at the Federal level.

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