France and other European countries experienced a period of economic expansion in the 1830s and 1840s, triggered by the *Industrial Revolution and *Benthamite economic reforms. Because this was a prosperity based not on *biblical liberty, but rather on a *pragmatic utilitarianism the lower classes were often left choking in the economic dust. As a consequence, a spirit of *socialism enveloped the continent, flowing from the pen of numerous writers, including the novelist George *Sand. Frederic Bastiat wrote in opposition to this spirit during the years surrounding the French Revolution of *1848. The staid economic theories of Adam Smith sprang to life under the animating power of Bastiat’s vivid *illustrations and irrefutable logic. Bastiat differed from Smith only in his theory of the *harmony of economic interests. The masses then and now rejected Bastiat’s logic, choosing rather to abuse the law as a weapon of legalized *plunder. Unfortunately, Bastiat followed Smith in basing his theory on natural law rather than the Bible.
Who was Frederic Bastiat? (1801-1850) Frederic Bastiat was a French economist and statesman, who was active during the era of the French Revolution of 1848.
Historical context. Napoleon I was defeated by Wellington in 1815 at Waterloo. The French monarchy, shorn of the doctrine of Divine Right of Kings, was reinstated and continued until the Revolution of 1848. It was a Constitutional monarchy under the restored Louis XVIII, balanced by a Parliament and governed under the Napoleonic Code. About 100,000 landed individuals were granted the right to vote. About 75% of the French were farm workers. The economy flourished in an atmosphere of freedom until 1826 when an economic slowdown during the reign of Charles X led to unrest. A series of confrontations with Parliament and restrictions on freedom of the press provoked the 3-day Revolution of 1830, after which King Louis-Phillipe ascended the throne.
The Industrial Revolution came to France under Louis-Phillipe, transforming her gradually from an agrarian to an industrial society. Railroads crisscrossed the country and “free” government education was introduced. In spite of the general prosperity, writers such as George Sand agitated for more socialism. “Valentine is the first of many Sand novels in which the hero is a peasant or a workman…she found her true form in her rustic novels, which drew their chief inspiration from her lifelong love of the countryside and sympathy for the poor” (1).
Once again in 1846-47 an economic slowdown and reluctance of the king to extend the franchise led to political unrest and the Revolution of 1848. The result was the short-lived Second Republic, replaced by the coup-de-etat and Second Empire of Napoleon III.
Frederic Bastiat wrote his classic tract The Law, (1850) in opposition to the spirit of socialism that enveloped France during this period. The foreword to that work explains that “Bastiat (1801-1850) … did most of his writing during the years just before – and immediately following – the Revolution of February 1848. This was the period when France was rapidly turning to complete socialism”(2), and other European countries following suit.
Summary of Bastiat’s teaching. Bastiat studied Adam Smith and might be considered his popularizer, except for their differences regarding the harmony of economic interests. He was a strong advocate of free trade and a market place unencumbered by government regulation and socialism. He was able to reduce complex economic theory to its elementary form and communicate difficult concepts via simple illustration.
In his classic, The Law, Bastiat developed the theme that the purpose of law is to protect life and property. Serious problems arise when men use the law to do that which they could not do as individuals without committing a crime, namely to vote money out of their neighbor’s pockets. The law itself is thereby perverted and used to accomplish the very evil it is meant to prevent. In the words of Bastiat, “The law perverted! And the police powers of the state perverted along with it! The law, I say, not only turned from its proper purpose but made to follow an entirely contrary purpose! The law become the weapon of every kind of greed! Instead of checking crime, the law itself guilty of the evils it is supposed to punish!”(3)
At his death, Bastiat was at work on what was to be his magnum opus. Observing the several competing economic factions within French society, he drew certain conclusions. The protectionists of industry and the socialists of the lower classes were at war because each was trying to control the law for their own benefit. If this abuse of the law could only be abandoned, Bastiat believed that the interests of the various factions would harmonize in the process of economic intercourse.
Implications for subsequent history. The lynchpin of Bastiat’s system – harmony of interests – has been generally rejected by economists. Contrary to Bastiat’s emphasis on harmony of interest, Adam Smith and other classical economists taught that the disharmony of interests in a free market restrains economic actors and constrains them to serve one another’s needs. Nonetheless, Bastiat’s arguments for free trade and against socialism remain classics. Like no other economist before him, Bastiat was able to trace the abstract theories of Adam Smith to their practical applications in the specifics of French agriculture and industry. Thus, he performed the valuable service of developing, illustrating, and popularizing much of Smith’s economic thought. Unfortunately, Bastiat’s countrymen rejected his brilliant logic, as do most in the West today.
Biblical analysis. God condemns “the throne of iniquity…which frameth mischief by a law”, which twists the law for selfish purposes (Ps. 94:20). The law is not to show partiality to any group within society: “Ye shall do no unrighteousness in judgment: thou shalt not respect the person of the poor, nor honour the person of the mighty…” (Lev. 19:15). It provokes God greatly when the innocent are condemned by the twisting of the law: “And judgment is turned away backward, and justice standeth afar off…Yea, truth faileth; and he that departeth from evil maketh himself a prey: and the Lord saw it, and it displeased him that there was no judgment” (Is. 60:14,15).
In spite of Bastiat’s concurrence with these great verities, his trenchant economic analysis is resting on a shaky theological foundation. He speaks much of law and justice, but defines law in terms of natural law, rather than biblical law. “Each of us has a natural right – from God – to defend his person, his liberty, and his property,” he says and defines law as , “the collective organization of the individual right to lawful defense.” Perhaps this is why his analysis has been rejected, since it rests not on the authority of God, but of man.
Corrective or Prescriptive Actions: As Bastiat pointed out in 1850, no country in Europe had been more concerned with securing its political rights than France and no country had been more wracked by Revolution. The nation that looks to government to supply those needs that can come from God alone – health, education and welfare — will be greatly agitated when its idol fails to supply those needs, as it inevitably must. If we trust in God to supply our needs, we will expect little from government and be little disappointed by government.