Economic Sophisms and “What Is Seen and What Is Not Seen”. Bastiat Frédéric
it is claimed that, because an abuse cannot be destroyed without upsetting those who benefit from it, its existence for just a moment ensures that it will last forever.
PUBLISHING HISTORY:
Original title: “Matières premières.”
Place and date of first publication: No date given. First published in book form.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 105–15.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
It is said: “The most profitable of all trades is the one in which manufactured goods are exchanged for raw materials. For the raw materials supply domestic labor.”
And from this the following conclusion is drawn:
That the best customs law would be the one that did the most to facilitate the importation of raw materials and which would put the greatest number of obstacles in the path of goods which had undergone some level of manufacture.1
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In political economy, there is no sophism so widespread as this one. It is the talk of not only the protectionist school but also and above all the allegedly liberal school, and this is a trying circumstance, for the worst thing for a good cause is not to be competently attacked but to be badly defended.
Commercial freedom will probably suffer the fate of all freedoms; it will be introduced into our laws only once it has gained possession of our minds. But if it is true that a reform has to be generally understood in order to be solidly established, it follows that nothing can delay it more than anything which misleads public opinion; and what is more likely to mislead it than articles that demand freedom by using the doctrines of monopoly to support them?
A few years ago, three large cities in France, Lyons, Bordeaux, and Le Havre, rose up against the protectionist regime.2 The country and the whole of Europe were moved at seeing what they took to be the flag of freedom being raised. Alas! It was still the flag of monopoly! A monopoly that was a little more sly and a lot more absurd than the one they seemed to want to overthrow. Thanks to the sophism which I will attempt to unveil, the petitioners did nothing more than reproduce the doctrine on the protection of domestic labor, while adding one more inconsistency to it.
What in fact is protectionism? Let us listen to M. de Saint-Cricq:
“Labor constitutes the wealth of a people, since it alone creates the physical things that our needs call for, and universal prosperity consists in the abundance of such things.” Such is the crux of the argument.
“But it is necessary for this abundance to be the product of the nation’s activity. If it were the product of foreign activity, national output would come to a sudden stop.” Here is the error. (See the preceding sophism.)3
“What therefore should an agricultural and manufacturing country do? Keep its market for the products of its own territory and industry.” Here is the aim.
“And to do this, restrict through duties and prohibit if necessary the products of the territory and industry of other peoples.” Here are the means.
Let us compare these arrangements with those of the petition from Bordeaux.
It divided goods into three classes.
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“The first covers foodstuffs and raw materials that are devoid of any human labor. In principle, a wise economy would require this class to be exempt from taxes.” Here, no labor, no protection.
“The second is made up of goods which have undergone some processing. This processing allows us to impose some duty on it.” Here protection starts because, according to the petitioners, here begins domestic labor.
“The third covers finished goods which cannot be used in any way in domestic production; we consider these to be the most liable to taxes.” Here labor, and protection with it, reach their peak.
As we can see, the petitioners claimed that foreign labor damages domestic labor. This is the error of the protectionist regime.
They demanded that the French market be reserved for French labor; that is the aim of the protectionist regime.
They demanded that foreign labor be subject to restrictions and taxes. That is the means of the protectionist regime.
So what difference can we therefore discern between the petitioners from Bordeaux and the leader of the protectionist chorus?
Just one: the wider or narrower range of interpretation of the meaning of the word labor.
M. de Saint-Cricq extends it to everything. He therefore wants to protect everything.
“Labor constitutes the entire wealth of a nation,” he says, “protecting agriculture, the entire agricultural sector, manufacturing, the entire manufacturing sector, this is the cry that will always echo around this Chamber.”
The petitioners consider manufacturing alone as constituting labor; for this reason they accord only this sector the favor of protection.
“Raw materials are devoid of any human labor. In principle they should not be taxed. Manufactured goods can no longer be used for further productive activity in the domestic market; we consider them to be the most proper to be subject to taxes.”
It is not a question here of examining whether protection for domestic labor is reasonable. M. de Saint-Cricq and the petitioners from Bordeaux agree on this point and we, as has been seen in previous chapters, differ from both in this respect.
The question is to know who is giving the proper meaning to the word labor, M. de Saint-Cricq or the petitioners from Bordeaux.
Well, on this terrain, it has to be said that M. de Saint-Cricq is right a thousand times, for the following is the dialogue that they might have with each other:
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M. de Saint-Cricq: “You agree that domestic labor has to be protected. You agree that no foreign products can be introduced into our market without destroying an equal amount of our domestic production. The only thing is that you claim that there are a host of products that contain value, since they sell, and which are nevertheless devoid of any human labor. And you list, among other things, wheat, flour, meat, cattle, bacon, salt, iron, copper, lead, coal, wool, skins, seed, etc.
“If you prove to me that the value of these things is not due to labor, I will agree that they do not need to be protected.
“However, if I also demonstrate to you that there is as much labor involved in one hundred francs’ worth of wool as in 100 francs’ worth of cloth, you will have to admit that protection is due as much to the one as to the other.
“Now, why is this bag of wool worth 100 francs? Is it not because that is its cost price? And is its cost price anything other than what has to be paid in wages, earnings, and the costs of manpower, labor, and interest to all the laborers and capital providers who contributed to producing the object?”
The Petitioners: “It is true that you might be right with regard to wool. But is a sack of wheat, an ingot of iron, or a quintal4 of coal the product of labor? Is it not nature that has created them?”
M. de Saint-Cricq: “There is no doubt that nature has created the elements of all these things, but it is labor that has created their value. I myself was mistaken when I said that labor creates physical objects, and this flawed expression has led me into many other errors. It is not in man’s power to