Introduction
by F. A. Hayek
Even
those who may question the eminence of Frédéric Bastiat as an economic
theorist will grant that he was a publicist of genius. Joseph
Schumpeter calls him "the most brilliant economic journalist who ever
lived." For the purpose of introducing the present volume, which
contains some of the most successful of his writings for the general
public, we might well leave it at that. One might even grant
Schumpeter’s harsh assessment of Bastiat that "he was not a theorist"
without seriously diminishing his stature. It is true that when, at the
end of his extremely short career as a writer, he attempted to provide
a theoretical justification for his general conceptions, he did not
satisfy the professionals. It would indeed have been a miracle if a man
who, after only five years as a regular writer on public affairs,
attempted in a few months, and with a mortal illness rapidly closing in
on him, to defend the points on which he differed from established
doctrine, had fully succeeded in this too. Yet one may ask whether it
was not only his early death at the age of forty-nine that prevented
him. His polemical writings, which in consequence are the most
important ones he has left, certainly prove that he had an insight into
what was significant and a gift for going to the heart of the matter
that would have provided him with ample material for real contributions
to science.
Nothing
illustrates this better than the celebrated title of the first essay in
the present volume. "What is seen and what is not seen in political
economy!" No one has ever stated more clearly in a single phrase the
central difficulty of a rational economic policy and, I would like to
add, the decisive argument for economic freedom. It is the idea
compressed into these few words that made me use the word "genius" in
the opening sentence. It is indeed a text around which one might
expound a whole system of libertarian economic policy. And though it
constitutes the title for only the first essay in this volume, it
provides the leading idea for all. Bastiat illustrates its meaning over
and over again in refuting the current fallacies of his time. I shall
later indicate that, though the views he combats are today usually
advanced only in a more sophisticated guise, they have basically not
changed very much since Bastiat’s time. But first I want to say a few
words about the more general significance of his central idea.
This
is simply that if we judge measures of economic policy solely by their
immediate and concretely foreseeable effects, we shall not only not
achieve a viable order but shall be certain progressively to extinguish
freedom and thereby prevent more good than our measures will produce.
Freedom is important in order that all the different individuals can
make full use of the particular circumstances of which only they know.
We therefore never know what beneficial actions we prevent if we
restrict their freedom to serve their fellows in whatever manner they
wish. All acts of interference, however, amount to such restrictions.
They are, of course, always undertaken to achieve some definite
objective. Against the foreseen direct results of such actions of
government we shall in each individual case be able to balance only the
mere probability that some unknown but beneficial actions by some
individuals will be prevented. In consequence, if such decisions are
made from case to case and not governed by an attachment to freedom as
a general principle, freedom is bound to lose in almost every case.
Bastiat was indeed right in treating freedom of choice as a moral
principle that must never be sacrificed to considerations of
expediency; because there is perhaps no aspect of freedom that would
not be abolished if it were to be respected only where the concrete
damage caused by its abolition can be pointed out.
Bastiat
directed his arguments against certain ever recurring fallacies as they
were employed in his time. Few people would employ them today quite as
naively as it was still possible to do then. But let the reader not
deceive himself that these same fallacies no longer play an important
role in contemporary economic discussion: they are today expressed
merely in a more sophisticated form and are therefore more difficult to
detect. The reader who has learnt to recognize these stock fallacies in
their simpler manifestations will at least be on his guard when he
finds the same conclusions derived from what appears to be a more
scientific argument. It is characteristic of much of recent economics
that by ever new arguments it has tried to vindicate those very
prejudices which are so attractive because the maxims that follow from
them are so pleasant or convenient: spending is a good thing, and
saving is bad; waste benefits and economy harms the mass of the people;
money will do more good in the hands of the government than in those of
the people; it is the duty of government to see that everybody gets
what he deserves; etc., etc.
None
of these ideas has lost any of its power in our time. The only
difference is that Bastiat, in combatting them, was on the whole
fighting on the side of the professional economists against popular
beliefs exploited by interested parties, while similar proposals are
today propagated by an influential school of economists in a most
impressive and, to the layman, largely unintelligible garb. It is
doubtful whether there is one among the fallacies which one might have
hoped Bastiat had killed once and for all that has not experienced its
resurrection. I shall give only one example. To an account of Bastiat’s
best-known economic fable, The Petition of the Candlemakers against the
Competition of the Sun (contained in a companion volume to this), in
which it is demanded that windows should be prohibited because of the
benefit which the prosperity of the candlemakers would confer on
everyone else, a well-known French textbook of the history of economics
adds in its latest edition the following footnote: "It should be noted
that according to Keynes—on the assumption of underemployment and in
accordance with the theory of the multiplier—this argument of the
candlemakers is literally and fully valid."
The
attentive reader will notice that, while Bastiat grapples with so many
economic panaceas which are familiar to us, one of the main dangers of
our time does not appear in his pages. Though he has to deal with
various queer proposals for using credit which were current in his
time, straight inflation through a government deficit seemed in his age
not a major danger. An increase of expenditure means for him
necessarily and immediately an increase in taxation. The reason is
that, as among all people who have gone through a major inflation
within living memory, a continuous depreciation of money was not a
thing with which people would have put up with in his day. So if the
reader should be inclined to feel superior to the rather simple
fallacies that Bastiat often finds it necessary to refute, he should
remember that in some other respects his compatriots of more than a
hundred years ago were considerably wiser than our generation.