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.

TWO DIFFERENT ROADS

bibles_books_01Over a decade passed now, but it was then I made a surprising discovery. Much of what I had been taught in public schools is not true.

How did learn of the deception? I began reading what people call the classics and historic works. When we study history, many of these great works serve as primary source documents for historians. Therefore, I have listed a small number of historic documents in Citizen Library.

What led me to read so many seeming long and sometimes difficult works? My long commute to work was driving me batty; I needed a distraction. So I decided to listen to classic works I would otherwise never read. Because my wife and daughters are Christians, the Bible was at the top of my list.

I have since read the Bible several times by listening to it, and I have read many other far less significant historic works.  I have learned there is a crucial difference between reading about history and reading historic documents.

Consider the Bible. Will what someone else says about the Bible be true to that work? Is reading what someone else has said about the Bible the same as reading it for ourselves? No and no.

Pick your favorite dessert. How could you ever describe the taste? You cannot. That’s why we are always willing to share a small sample of our pleasure with someone we love. We have no other way to share our pleasure except to help them taste it for themselves.

The same that is true of the Bible is true of any other historic work. Unless we study the great historic work of history for ourselves, instead of being informed we risk being propagandized. Instead of learning what historic men and women had to say, politicians will tell us what they want us to believe.

Why is it important to learn the truth? What is wrong with being propagandized? In The Theory of Moral Sentiments, Adam Smith spoke of our desire both to be respectable and to be respected. He spoke of a choosing between two roads.

We desire both to be respectable and to be respected. We dread both to be contemptible and to be contemned. But, upon coming into the world, we soon find that wisdom and virtue are by no means the sole objects of respect; nor vice and folly, of contempt. We frequently see the respectful attentions of the world more strongly directed towards the rich and the great, than towards the wise and the virtuous. We see frequently the vices and follies of the powerful much less despised than the poverty and weakness of the innocent. To deserve, to acquire, and to enjoy the respect and admiration of mankind, are the great objects of ambition and emulation. Two different roads are presented to us, equally leading to the attainment of this so much desired object; the one, by the study of wisdom and the practice of virtue; the other, by the acquisition of wealth and greatness. Two different characters are presented to our emulation; the one, of proud ambition and ostentatious avidity. the other, of humble modesty and equitable justice. Two different models, two different pictures, are held out to us, according to which we may fashion our own character and behaviour; the one more gaudy and glittering in its colouring; the other more correct and more exquisitely beautiful in its outline: the one forcing itself upon the notice of every wandering eye; the other, attracting the attention of scarce any body but the most studious and careful observer. They are the wise and the virtuous chiefly, a select, though, I am afraid, but a small party, who are the real and steady admirers of wisdom and virtue. The great mob of mankind are the admirers and worshippers, and, what may seem more extraordinary, most frequently the disinterested admirers and worshippers, of wealth and greatness. (from here)

If we want our children to be both truly respectable and to truly respected, they must study wisdom and the practice of virtue. Yet the public school system is a secular institution. When proper wisdom is Godly wisdom, we have little reason to hope our children will be taught Godly wisdom in the public school system.

Because the study of wisdom and the practice of virtue must be based upon the Truth, the study of wisdom and the practice of virtue is therefore highly controversial. As Pontius Pilate  said: “What is Truth?” (John 18:38). Then he had the Truth crucified. Thus, to avoid controversy, the public school system focuses our children’s minds on the acquisition of wealth and greatness.

 

BLESSED ARE THOSE WHO MOURN WHAT?

cross2Those Who Mourn is about one of the beatitudes in the Sermon on the Mount.

Matthew 5:4 New King James Version (NKJV)

Blessed are those who mourn,
    For they shall be comforted.

When Jesus speaks of mourning, what are we blessed for mourning?

Most of the time, we don’t associate blessing with mourning; maybe we should rethink this… Matthew didn’t actually say what those blessed ones are mourning; it could be the loss of a loved one, it could be the loss of their home or possessions, or it could be the sinful and rebellious state of this world. Maybe it doesn’t matter… (continued here)

Here Don Merritt demonstrates a willingness to let the Bible speak for itself. Most commentators seem to think that given the context the word “mourn” here refers to mourning our sins. Perhaps, but the passage does not say. So a broader interpretation may more appropriate. Here is how The Jeremiah Study Bible explains the verse.

The hurting. The one who weeps over the pains of life can be confident of God’s healing and comfort. The Greek word translated as comforted is also used to describe the ministry of the Holy Spirit. In our sadness, the Holy Spirit will move us to joy.

So what then is the meaning of that verse? The Message is not my favorite translation, but sometimes it gets at the meaning of a passage better than a straightforward translation. So perhaps its translation is better.

Matthew 5:4 The Message (MSG)

4 “You’re blessed when you feel you’ve lost what is most dear to you. Only then can you be embraced by the One most dear to you.

I watched my children as they grew, and I learned much. When one of them lost a possession, I saw the grief. I recognized it because I had known such grief myself. But such grief is a small thing. If we live long enough, like Job we will lose everything.

  • We will lose our family. Our Lord may favor us with grandchildren, but even they will not replace our spouses and the people we grew up with.
  • We will lose our health. Suddenly, perhaps, but more likely we will lose it slowly. Dribbled away. Leaving us to wonder what happened. Why?
  • We will lose our fortune. How? If nothing else because we have become incapable, we will let our children or grandchildren take control.
  • Most important, perhaps, we will lose our innocence. Can you imagine King David’s grief after the prophet Nathan spoke these words from the Lord.

    2 Samuel 12:7-12 New King James Version (NKJV)

    Then Nathan said to David, “You are the man! Thus says the Lord God of Israel: ‘I anointed you king over Israel, and I delivered you from the hand of Saul. I gave you your master’s house and your master’s wives into your keeping, and gave you the house of Israel and Judah. And if that had been too little, I also would have given you much more! Why have you despised the commandment of the Lord, to do evil in His sight? You have killed Uriah the Hittite with the sword; you have taken his wife to be your wife, and have killed him with the sword of the people of Ammon. 10 Now therefore, the sword shall never depart from your house, because you have despised Me, and have taken the wife of Uriah the Hittite to be your wife.’ 11 Thus says the Lord: ‘Behold, I will raise up adversity against you from your own house; and I will take your wives before your eyes and give them to your neighbor, and he shall lie with your wives in the sight of this sun. 12 For you did it secretly, but I will do this thing before all Israel, before the sun.’”

Each of us sins, even best of kings, and those who mourn most see their sins, understand the consequences, and grieve.

So how does the Holy Spirit comfort us? I once heard Chuck Swindoll describe a conversation with Corrie Ten Boom. Her words to him were something to this effect.

Hold everything in your hands lightly, otherwise it hurts when God pries your fingers open. (from here)

Since that struck me as incomplete, I searched further. So I found this quote. I think it helps, perhaps, to explain the first.

You can never learn that Christ is all you need, until Christ is all you have. (from here)

Why are those who mourn blessed? We understand we need a savior.

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?