FREDERIC BASTIAT ON THE DIFFERENCE BETWEEN A GOOD AND A BAD ECONOMIST

Mankind's Eternal Dilemma: The Choice Between Virtue and Vice by Frans Francken the Younger depicts three choices: heaven, earth, and hell (from here)
Mankind’s Eternal Dilemma: The Choice Between Virtue and Vice by Frans Francken the Younger depicts three choices: heaven, earth, and hell (from here)

The American news media has a good business model. Suffering, sex, violence, and so forth attracts viewers, but is the news media’s business model good for us? When they show us suffering, what is the first thought of the news media and its too often mindless admirers? It is a crisis! The government has to do something!

Why the government? Well, it makes for a good story. The reporters can point their cameras at somebody and tell us what he is doing or not doing.

Is our government always supposed to do something? Why? When there is a problem, how far ahead does the news media look? Doesn’t the news media always gravitate to the next crisis? Do they actually give much thought to anything?

Consider Frédéric Bastiat‘s observation on the importance of foresight.

In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause–it is seen. The others unfold in succession–they are not seen: it is well for us if they are foreseen. Between a good and a bad economist this constitutes the whole difference–the one takes account of the visible effect; the other takes account both of the effects which are seen and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, at the risk of a small present evil.

In fact, it is the same in the science of health, arts, and in that of morals. If often happens, that the sweeter the first fruit of a habit is, the more bitter are the consequences. Take, for example, debauchery, idleness, prodigality. When, therefore, a man, absorbed in the effect which is seen, has not yet learned to discern those which are not seen, he gives way to fatal habits, not only by inclination, but by calculation.

This explains the fatally grievous condition of mankind. Ignorance surrounds its cradle: then its actions are determined by their first consequences, the only ones which, in its first stage, it can see. It is only in the long run that it learns to take account of the others. It has to learn this lesson from two very different masters–experience and foresight. Experience teaches effectually, but brutally. It makes us acquainted with all the effects of an action, by causing us to feel them; and we cannot fail to finish by knowing that fire burns, if we have burned ourselves. For this rough teacher, I should like, if possible, to substitute a more gentle one. I mean Foresight. (from here)

Over the last couple of centuries, our nation has accumulated many unjust laws. In each instance a large segment of the population conspired together to make “other people do the right thing”. In others words, some busybodies insisted upon making everyone else do things their way.

What has been the result? Here are some examples.

  • We have a public education system that worked at first. Then our leaders slowly stripped it of any religious content. Our knowledge of civics is also abysmal. Man on the street interviews have become a national joke.
  • Some time back too many of us started letting our leaders ignore the Constitution whenever we wanted what they promised. Now our president routinely issues executive orders everyone knows are unconstitutional.
  • We created the Fed to prevent bank runs. Now we have a fiat currency that steadily loses value, and our banking system gives everyone the shivers.
  • We passed the 16th Amendment to the Constitution. The income taxes that that amendment allowed were only supposed to affect the top one percent.
  • To allow the direct election of senators, we passed the 17th Amendment to the Constitution.  Now the Federal Government has more raw power than all the state governments combined. Perhaps a Convention of the States could change that. Perhaps.
  • Social Security once looked like a humane way to save the elderly from poverty. Now that costly system threatens to go bankrupt.
  • More and more our healthcare system, responsible for prolonging so many lives, is government-run. Such a system will almost certainly lead to rationing. Then we will die waiting in line to be treated.
  • We created a great safety-net to prevent the effects of poverty. Who anticipated those generous welfare programs would encourage greater social ills such as unwed motherhood?
  • In the name of civil rights, our great and glorious leaders decided to protect everyone’s “rights”. Now many think their “rights” are something “the man” owes them.

Earlier this year I wrote PART 4 FOR BOTH “HOW A POOR WIDOW ANSWERED HER CALLING” AND “GOVERNMENT-GIVEN RIGHTS VERSUS GOD-GIVEN RIGHTS”. That post included a section on The Seven Christian Virtues. That section describes how and why those who believe in government have worked to pervert the virtues of our people.

To have foresight is to be wise, and it is worth remembering that wisdom is something we each must learn. Our government cannot give us wisdom. It is also worth remembering that virtue is something we each must practice. Our government cannot be virtuous for us.

11 thoughts on “FREDERIC BASTIAT ON THE DIFFERENCE BETWEEN A GOOD AND A BAD ECONOMIST

  1. What a neat post Tom. Your channeling of Bastiat has described nearly to a T the cultural and political character of the west and explains much of why it (we) are in such a pickle today. Very insightful.

    Liked by 3 people

  2. Maybe you might take a moment to consider if the narrative that you are creating here might be so dark that it fails to see the truth of our situation in the big, bright daylight of history.

    I like to read history when I have time. I consider myself a pretty average Caucasian male, backgroundwise. As I have read about different times and different places in history, I have often thought about how I might have faired had I been born to average parents at those other times and places. Unless I want to romanticize away the truth about periods of history when the appendicitis attack I had at age 17 would likely have killed me before I even got started, then I know I am very fortunate to be born to average folks in the middle of the last century, more fortunate with more opportunities for every kind of intellectual, material or spiritual fulfillment than I know that I would have been afforded at any other time in the history of human civilization.

    My parents and their generation laid these historic and yes, progressive, new opportunities on my average plate. Yes, they are the generation that started Social Security, expanded access to public education and higher education, created the Fed (which ultimately stabilized the previous extreme economic highs and lows of capitalism that Marx predicted would spark a revolution of the proletariat), passed the Civil Rights Acts that ended Jim Crow, and many, many more advances that made our nation in my lifetime the greatest economic and military powerhouse of the world by far, and created the largest increase in average middle class wealth in the history of human civilization. So your list of grievances aside, I feel pretty fortunate. Don’t you Tom?

    Have there been unintended consequences? Was there on occasion corruption and overreach? Has things massively changed economically and technologically that require new systemic innovations at every level of government? Is there much to do to make the system more just, more virtuous, more perfect? Yes to all of those. But my parent’s generation looked forward and tried to solve problems, and they recognized that government is one powerful problem solving tool, and in many cases, the only tool that can work. You and I were given a gift to be born in the middle of the Twentieth Century Tom. At any other time and place in the history of civilization, I think I would likely have ended my days young, ignorant and in depressing servitude.

    When you listen to Mr. Trump’s message about “making America great again”, perhaps it might be worthwhile to take stock of just how blessed we have been to become as great as we actually are right now, both individually and as a nation, and how the generations before us that made us this great actually did it.

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    1. @Tony

      Trump has nothing to do with this post. I can only pray Trump has read what Bastiat wrote, but I don’t know that he has. I guess I should google Trump and Bastiat. Thanks for the thought.

      Anyway, what is the point of your comment? Am I supposed to be ashamed that I did not wait to complain until after our country has been destroyed by Socialism?

      Admittedly, I am only an ordinary blogger. So sometime the best I can do is refer a reader to a post by an extraordinary blogger. Here is such a post => https://insanitybytes2.wordpress.com/2016/09/16/rhetorical-charm/

      You tell me. Were you practicing rhetorical charm?

      Liked by 1 person

      1. It seems obvious that my comment was my direct reaction to this from you:

        “Over the last couple of centuries, our nation has accumulated many unjust laws. In each instance a large segment of the population conspired together to make “other people do the right thing”. In others words, some busybodies insisted upon making everyone else do things their way.

        “What has been the result? Here are some examples.

        “We have a public education system that worked at first. Then our leaders slowly stripped it of any religious content. Our knowledge of civics is also abysmal. Man on the street interviews have become a national joke.

        “Some time back too many of us started letting our leaders ignore the Constitution whenever we wanted what they promised. Now our president routinely issues executive orders everyone knows are unconstitutional.

        “We created the Fed to prevent bank runs. Now we have a fiat currency that steadily loses value, and our banking system gives everyone the shivers.

        “We passed the 16th Amendment to the Constitution. The income taxes that that amendment allowed were only supposed to affect the top one percent.
        To allow the direct election of senators, we passed the 17th Amendment to the Constitution. Now the Federal Government has more raw power than all the state governments combined. Perhaps a Convention of the States could change that. Perhaps.

        “Social Security once looked like a humane way to save the elderly from poverty. Now that costly system threatens to go bankrupt.
        More and more our healthcare system, responsible for prolonging so many lives, is government-run. Such a system will almost certainly lead to rationing. Then we will die waiting in line to be treated.

        “We created a great safety-net to prevent the effects of poverty. Who anticipated those generous welfare programs would encourage greater social ills such as unwed motherhood?

        “In the name of civil rights, our great and glorious leaders decided to protect everyone’s “rights”. Now many think their “rights” are something “the man” owes them.”

        I guess I’m feeling more blessed than victimized by the legacies of opportunity that my parent’s generation bequeathed to us. I wonder sometimes if the white Baby Boomer generation in particular will be viewed by history as having been handed unprecedented advantages, and like the prodigal son, we did not appreciate what we had been given and did little work to build on that heritage for the next generations, but instead we have just complained that everything we inherited is not perfect and then we have done our best to squander it all away.

        You can’t see how Mr. Trump is your poster boy for this spoiled, unappreciative generation? Perhaps that blind spot is why you don’t find my comments topical to your post.

        I’m not familiar with Bastiat, except from what you have posted here, but I think perhaps it is difficult to channel the arcane moralizing of16th and 17th Century economists without regard to the fact that they could not even imagine the technologies and globalized economies of the 20th Century, much less of the 21st Century.

        We need to learn from actual history, but we can’t go back. History is moving rapidly forward whether we want keep up or not. If we don’t get out ahead of history as my parent’s generation did to tame the feral animal that is globalized capitalism in more morally just ways, then, just as the 20th Century was the American Century, with all the good and bad that entailed (mostly good, I think), the 21st Century will be the Chinese Century (and I think that would be mostly bad).

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        1. @Tony

          Still trying to drag Trump into this? I googled Donald Trump and Frederic Bastiat together. I suppose when I more time I will dig a bit more, but Conservative bloggers and commenters are the ones talking about Bastiat, not Trump or the pundits.

          I wonder sometimes if the white Baby Boomer generation in particular will be viewed by history as having been handed unprecedented advantages, and like the prodigal son, we did not appreciate what we had been given and did little work to build on that heritage for the next generations, but instead we have just complained that everything we inherited is not perfect and then we have done our best to squander it all away.

          I think here you get very close to the nub of the problem.

          When Bastiat wrote, various Socialist parties in France feuded with each other over the government. Each party promised basically the same thing. Big benefits. Low taxes. And each party claimed only “they” had the plan that could deliver these things. With considerable sarcasm, Bastiat observed that government produces nothing. So it could not give big benefits without levying high taxes.

          As an economist Bastiat explained that when the government plundered the assets of one group to give some of those assets to another group, the hidden costs usually far outweighed the benefits. He could have written the same thing today. Nothing has substantially changed.

          The Baby Boomers have become a prodigal generation. For the sake of Social Security and Medicare, things we never should have asked the government to provide us, we are letting our leaders waste 100’s of billions so they can steal 10’s of millions. Because of the thieves we have put in charge, we have made our foreign policy an absolute wreck, we are using our military for stupid social experiments and allowing its strength to wither, we have delivered our children to secular humanists instead of teachers of the 3 Rs and Christian virtues, we are dissipating our economic strength, and so forth.

          Yet even when the evidence of our foolhardiness stands plainly before us, most of us remain convinced that Socialism is good thing. We cannot defend the morality of it, but we still think it must be a good thing. We are just not doing it right.

          Well, at least you have your doubts now. I suppose that’s progress.

          Liked by 1 person

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