What a 220-year-old French political scientist can teach us about today’s economy

Frédéric Bastiat is probably the most famous political scientist you’ve never heard of. June 30 marks the 220th anniversary of his birth and, given America’s recent embrace of cronyism through tariffs, subsidies and earmarks, we need his wisdom more than ever.

Bastiat lived through France’s tumultuous cycle of revolutions during the first half of the 19th century. He witnessed firsthand how these upheavals provided ample opportunity for special interest groups to clamor for privileged treatment in return for supporting their benefactors’ claims to political power. 

Bastiat is best known for how his parables perfectly encapsulate a critical concept and present it in a relatable fashion. His style combines the insight of Milton Friedman with the humor of Dave Barry and P.J. O’Rourke.

His best-known essay is “The Petition of the Candlemakers.” In this satire, the lighting industry requests protection from the unfair practices of a powerful competitor, the sun. They argue that the sun has a natural advantage at producing light that reduces their sales, and, for the sake of economic growth, regulations should require every window to be bricked over. This would expand the demand for candles, lanterns and the upstream products needed to produce light, benefiting those industries and the workers in them.

The idea is absurd, but the logic is the same as that used by proponents of the steel and aluminum tariffs created by the Trump administration and maintained by the Biden administration. A tariff, by its very nature, benefits domestic producers by raising the price that domestic consumers must pay. You can’t say “We must protect American industry!” without simultaneously harming American consumers.

Tariffs do indeed have ripple effects through the rest of the economy, but the bad outweighs the good. Trump’s – and now Biden’s – tariffs have increased the revenue of a handful of the largest and most influential steel- and aluminum-producing corporations, but they haven’t increased employment. Higher-cost metals have reduced manufacturing output and caused a loss of 75,000 jobs.

The same incorrect analysis is displayed in Bastiat’s parable “The Broken Window.” After a child breaks a window, onlookers reassure the unhappy property owner with the insensitive platitude that “Accidents like this keep production moving. Everyone has to live. What would happen to glaziers if no window panes were ever broken?”

Bastiat uses the story to illustrate that a bad economist focuses on the obvious effect (“what is seen”), while a good economist investigates the indirect effect (“that which must be foreseen”). But it doesn’t take an economics degree to understand that it would be much better if the resources that must now be spent on a new window could instead be spent on other goods and services. Simply spending money doesn’t create economic growth.

Unfortunately, most economic policy implicitly adopts this cost-blind perspective. One example is the growing support for expanding federal industrial policy. In particular, the revival of the military-industrial complex to compete with China in a new Cold War will be a gold rush for those able to twist government support to their own economic advantage. Their cost-blind justification will always be “This will create jobs.”

No discussion of Bastiat’s writings could be complete without mentioning “The Law,” perhaps the most straightforward argument ever written against government intervention in people’s lives. The best indicator of perversions of government power is whether “the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.”

This kind of government-enabled theft – legal plunder, as he calls it – leads to a decay of society as government devolves into an entity “by which everyone seeks to live at the expense of everyone else.” You need look no further than the recent reincarnation of earmarks (in which members of Congress provide billions for their pet projects, paid for by far-off taxpayers who will never benefit) to understand that legal plunder is alive and well in the U.S.A.

The late George Mason University economist Walter Williams, in an introduction to the book, said: “Bastiat’s greatest contribution is that he took the discourse out of the ivory tower and made ideas on liberty so clear that even the unlettered can understand them.”

As we approach America’s 245th birthday, let’s reengage with the spirit that motivated our Founders, and which inspired Bastiat to write: “Look at the United States. There is no country in the world where the law is kept more within its proper domain: the protection of every person’s liberty and property.”

We don’t always live up to this lofty standard. Nor did we in 1848, as Bastiat acknowledged when he wrote those words. But things are better today than they were 170 years ago, and if we further limit government’s ability to plunder one person for another’s benefit, the future will be even brighter.

Michael Farren is a research fellow with the Mercatus Center at George Mason University.