Faith in Mankind not the Legislator

More words of wisdom from uncle Freddie:

Against such conclusions as these I protest with all my strength. Far from entertaining the absurd idea of doing away with religion, education, property, labor, and the arts, when we say that the State ought to protect the free development of all these kinds of human activity, without helping some of them at the expense of others—we think, on the contrary, that all these living powers of society would develop themselves more harmoniously under the influence of liberty; and that, under such an influence no one of them would, as is now the case, be a source of trouble, of abuses, of tyranny, and disorder. Our adversaries consider that an activity which is neither aided by supplies, nor regulated by government, is an activity destroyed. We think just the contrary. Their faith is in the legislator, not in mankind; ours is in mankind, not in the legislator.

Bastiat's Negative Railroad

From Economic Sophisms, by Frederic Bastiat

I have said that as long as one has regard, as unfortunately happens, only to the interest of the producer, it is impossible to avoid running counter to the general interest, since the producer, as such, demands nothing but the multiplication of obstacles, wants, and efforts.

I find a remarkable illustration of this in a Bordeaux newspaper.

M. Simiot raises the following question:

Should there be a break in the tracks at Bordeaux on the railroad from Paris to Spain?

He answers the question in the affirmative and offers a number of reasons, of which I propose to examine only this:

There should be a break in the railroad from Paris to Bayonne at Bordeaux; for, if goods and passengers are forced to stop at that city, this will be profitable for boatmen, porters, owners of hotels, etc.

Here again we see clearly how the interests of those who perform services are given priority over the interests of the consumers.

But if Bordeaux has a right to profit from a break in the tracks, and if this profit is consistent with the public interest, then Angoulême, Poitiers, Tours, Orléans, and, in fact, all the intermediate points, including Ruffec, Châtellerault, etc., etc., ought also to demand breaks in the tracks, on the ground of the general interest—in the interest, that is, of domestic industry—for the more there are of these breaks in the line, the greater will be the amount paid for storage, porters, and cartage at every point along the way. By this means, we shall end by having a railroad composed of a whole series of breaks in the tracks, i.e., a negative railroad.

Whatever the protectionists may say, it is no less certain that the basic principle of restriction is the same as the basic principle of breaks in the tracks: the sacrifice of the consumer to the producer, of the end to the means.

Bastiat Predicts the Civil War

I collected this note while reading the Bastiat Collection on my Kindle a couple of years back.  Unfortunately, I am going to have to do some digging in order to point you to the specific essay.  However, I found it to be an incredible tid bit of history that a Frenchman who died in 1850 would predict with such accuracy the roots of the War Between the States:

Look at the United States. There is no country in the world where the law is kept more within its proper domain—which is, to secure to everyone his liberty and his property. Therefore, there is no country in the world where social order appears to rest upon a more solid basis. Nevertheless, even in the United States, there are two questions, and only two, that from the beginning have endangered political order. And what are these two questions? That of slavery and that of tariffs; that is, precisely the only two questions in which, contrary to the general spirit of this republic, law has taken the character of a plunderer. Slavery is a violation, sanctioned by law, of the rights of the person. Protection is a violation perpetrated by the law upon the rights of property; and certainly it is very remarkable that, in the midst of so many other debates, this double legal scourge, the sorrowful inheritance of the Old World, should be the only one which can, and perhaps will, cause the rupture of the Union.

Atlas Slacked Off - or - The Tragedy of the Margins

Atlas Shrugged, being one of the most popular and controversial books of all time, is probably familiar to you.  While I still credit the book as a major turning point in my young life and for fundamentally shifting the way I think about ethics and politics, I no longer wave the Ayn-Rand-was-right-about-everything banner.  Putting the major disagreements aside, I want to focus on yet another epiphany I had in the shower this morning (is there a better place for such a thing?).  The following will be a minor plot spoiler to those entirely unfamiliar with the novel.

The theme of the book is the most productive members of society - the men (and a woman) "of the mind", in Rand's parlance - getting fed up with the parasitic elements of society and going on strike.  This strike usually involves the self-destruction of their huge industrial businesses and their disappearance.  This, it struck me this morning, is where the story departs starkly from reality.  I am not disagreeing with the premise that those who produce wealth should bristle at the thought of it being pilfered from them.  Nor am I suggesting that they should not resist such acts of aggression - by force if necessary.  My qualm is with the literal interpretation of the book.  I see the plot as an abstraction intended to illustrate the morality and the consequences of the producers going on strike.  Unfortunately, the practical effects of government intervention into otherwise peaceful interactions are considerably more subtle.

The most insidious aspect of the strike going on with the producers here in the real world is on the margins.  People should not be expected to shrink away from society all-together when being fed up with taxation and regulation.  Rather, they will for the most part simply let those projects which require too much effort for too little gain (whether because of taxes or regulations) slip away, never to be seen or heard from again.

We should consider here Bastiat's warning against focusing solely on that which can be seen and ignoring that which is hidden.  The medical doctors who retire early, citing increased regulation and the affordable care act as their reason, are quite visible.  Those who decide not to go into medicine or those who simply elect to spend more time on the golf course are the unseen.  The chemist who discovers a potential cure for a rare disease but doesn't pursue it because the potential market just doesn't justify a billion dollars worth of regulatory hurdles is part of the unseen.  So is the dentist who doesn't expand his practice because the additional income moves him to the next tax bracket, netting him a pittance for the trouble.  So is the young couple who let their small business dreams die when they couldn't afford the new minimum wage.

I would argue that the "Brain Drain" is not the physical movement of ability from the borders of an overreaching state, though that certainly happens.  It is rather the creeping apathy of a mind grappling with the inability to be independent and effectual in a static, constrained and centrally planned world.

The little things that we have lost are a crime against humanity.

The Broken Window Fallacy - That Which is Seen and That Which is Not Seen

The following video is a very nicely done description of Bastiat's Broken Window Fallacy from the folks over at Learn Liberty.  I was going to write an article explaining Bastiat's parable of the broken window, but it has been done so well so many time, I decided just to phone this one in, for lack of a modern phrase.

Bastiat on the Fiscal Cliff

 The following excerpt from Bastiat illustrates the predicament of the current regime more eloquently than I can, and he died over 150 years ago.  After 60 years of promising everything under the sun in order to gain power, they are embarrassed, or at least they should be, to admit that they have no money.  This is the so called Fiscal Cliff:

The hundred thousand mouths of the press and of the speaker’s platform cry out all at once:

“Organize labor and workmen.”

 “Do away with greed.”

 “Repress insolence and the tyranny of capital.”

“Experiment with manure and eggs.”

“Cover the country with railways.”

“Irrigate the plains.”

“Plant the hills.”

“Make model farms.”

“Found social laboratories.”

“Colonize Algeria.”

“Nourish children.”

“Educate the youth.”

“Assist the aged.”

“Send the inhabitants of towns into the country.”

“Equalize the profits of all trades.”

“Lend money without interest to all who wish to borrow.”

“Emancipate Italy, Poland, and Hungary.”

“Rear and perfect the saddle-horse.”

“Encourage the arts, and provide us with musicians and dancers.”

“Restrict commerce, and at the same time create a merchant navy.”

“Discover truth, and put a grain of reason into our heads. The mission of Government is to enlighten, to develop, to extend, to fortify, to spiritualize, and to sanctify the soul of the people.”

... And the people believe, and the people hope, and the people make a revolution! No sooner are their friends at the head of affairs, than they are called upon to redeem their pledge. “Give us work, bread, assistance, credit, education, colonies,” say the people; “and at the same time protect us, as you promised, from the taxes.”