Following the Great Depression and the Second World War, Henry Hazlitt, the principal editorial writer on economics and finance for the New York Times from 1934 to 1946, wrote a book entitled Economics in One Lesson. The lesson is simply this: "The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.” Beginning with “The Broken Window,” Hazlitt took aim at many of the economic fallacies – what Frederic Bastiat called Economic Sophisms – that had been used to justify “capricious government intervention in business.”
Bastiat was a mid-nineteenth century economist and member of the French National Assembly who brought clarity to “the dismal science.” For example, he satirized the self-absorbed pettiness of so much interest group activity in “The Candlemakers’ Petition,” which proposed to block the sun’s rays in view of the harm it inflicted upon their trade. Just as powerful is Bastiat’s argument in The Law in favor of a state of social and economic self-governance.
The Law begins with an expression of alarm: “The law perverted! And the police powers of the state perverted along with it!”
At the time Bastiat’s essay was published in June 1850, the Revolution of 1848 was still in the air. Idealistic abstractions and political slogans – what Jacob Burckhardt called “clear but false ideas” – were on everybody’s lips. The French monarchy fell that year and Louis Napoleon was elected president. Napoleon seized power outright three years later and briefly jailed Alexis de Tocqueville, a former cabinet official who had earlier written the classic of liberal political philosophy, Democracy in America. By then, Bastiat himself had died of tuberculosis. Tocqueville, who suffered from the same disease, was forcibly retired.
The Law expresses Bastiat’s dismay that the world of political liberty had been turned upside down: “The law, I say, [is] not only turned from its proper purpose but made to follow an entirely contrary purpose! The law [has] become the weapon of every kind of greed!” The law, so to speak, had been conscripted into the service of those greedy for power. “Instead of checking crime, the law itself [is] guilty of the evils it is supposed to punish!” It is the age-old problem: Who will guard the guardians?
A legal positivist or utilitarian defines law in terms of a human sovereign’s power to control people. Bastiat instead makes a natural law argument rather than a utilitarian or consequentialist one: “[I]t was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.” Here the intellectual battle lines have been drawn.
We hold from God the gift which includes all others—physical, intellectual, and moral life. [...] The Creator of life has entrusted us with the responsibility of preserving, developing, and perfecting it. In order that we may accomplish this, He has provided us with a collection of marvelous faculties. And he has put us in the midst of a variety of natural resources. By the application of our faculties to these natural resources we convert them into products, and use them. This process is necessary in order that life may run its appointed course. Life, faculties, production—in other words, individuality, liberty, property—this is man. And in spite of the cunning of artful political leaders, these three gifts from God precede all human legislation, and are superior to it.
Bastiat defines law very practically as “the collective organization of the individual right of lawful defense.” More succinctly, it is organized justice. Its purpose is to substitute a common force for individual forces to protect God’s gifts, maintain rights, and enable justice to reign. Bastiat then adds the proposition upon which his subsequent argument rests: If no individual can lawfully use force to destroy the rights of others, then the same principle applies to the common force. He thus argues from the lesser to the greater.
When the law exceeds its proper functions, it acts in direct opposition to its own objective, thus destroying itself and annihilating justice. It places “the collective force at the disposal of the unscrupulous who wish, without risk, to exploit the person, liberty, and property of others,” converting plunder into a right and lawful defense into a crime. Greed and false philanthropy are what motivate people to do so.
Humanity has a common aspiration toward self-preservation and self-development: ”If everyone enjoyed the unrestricted use of his faculties and the free disposition of the fruits of his labor, social progress would be ceaseless, uninterrupted, and unfailing.” But history also bears witness to a fatal tendency of mankind: “When they can, they wish to live and prosper at the expense of others.” This covetous and rivalrous sort of desire is the first root cause: greed.
Bastiat contrasts the origin of property with the origin of plunder. Property originates in the fact that “[m]an can live and satisfy his wants only [...] by the ceaseless application of his faculties to natural resources. [...] But it is also true,” he continues, “that a man may live and satisfy his wants by seizing and consuming the products of the labor of others. This process is the origin of plunder.” This is what one might expect the law and the sovereign state to prevent.
When, then, does plunder stop? It stops when it becomes more painful and more dangerous than labor. It is evident, then, that the proper purpose of law is to use the power of its collective force to stop this fatal tendency to plunder instead of to work. But since the law is made by men and since law cannot operate without the sanction and support of a dominating force, this force must be entrusted to those who make the laws.
This necessity, combined with the fatal tendency in the heart of man, “explains the almost universal perversion of the law. Thus it is easy to understand how law, instead of checking injustice, becomes the invincible weapon of injustice.” Bastiat calls the result legal plunder. What weaponizes legal plunder is “the seductive lure of socialism” to make the law “philanthropic,” demanding that “the law should directly extend welfare, education, and morality throughout the nation.”
Let us now see where the logic of Bastiat’s argument impels us: “When plunder is organized by law for the profit of those who make the law, all the plundered classes seek to enter into the making of laws.” Why? Either to stop the plunder, or to share in it. As coercive “philanthropy” becomes more widespread, “men seek to balance their conflicting interests by universal plunder.” It is an understandable but pernicious reaction against perceived partiality, oppression, and injustice.