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Opinion from a Libertarian ViewPoint

Posts Tagged ‘Bastiat’

Seeing The Invisible Hand

Posted by M. C. on April 11, 2023

Thomas Sowell said it best when he averred: “It is hard to imagine a more stupid or dangerous way of making decisions that by putting those decisions in the hands of people who pay no penalty for being wrong.” He, too, is herein channeling the invisible hand.

Hint: don’t bet against the invisible hand. It is a losing proposition.

https://open.substack.com/pub/walterblock/p/seeing-the-invisible-hand?utm_source=share&utm_medium=android

Luis Rivera

By Walter E. Block

Adam Smith’s “invisible hand” is certainly the most wondrous, astounding and marvelous concept in all of economics, and there are quite a few doozies in the dismal science. I go further than that. The invisible hand ranks as high or higher, in terms of pure beauty, than even the smile of a baby, the music of Mozart or the most beautiful sunset that ever took place. In terms of what it means for our potential prosperity, it has no upper bounds whatsoever.

Bastiat perched himself on the top of the Eifel Tower, looked down at the people scurrying around far down below him, and marveled at the fact that Paris got fed, without any central direction at all. This was in invisible hand (that is, free enterprise) at work; you can’t see this “hand,” but you can discern its effects.

We all marvel at the teamwork of the championship basketball team, the winner of the eight-person shell in the regatta, a 100-member orchestra playing 64th notes without a hair’s breath of discord. But this pales into total insignificance compared to the teamwork made at least potentially possible by the invisible hand; all eight billion of us cooperating producing goods and services and thus fighting poverty. These other accomplishments have a coach, a coxswain or a conductor; in contrast, when the human race bans protectionism and regulation, the invisible hand will take over without any central direction at all. If that is not a miracle, then nothing is (Adam Smith thought that the invisible hand was God’s hand). If that does not at least slightly shake up the atheists of the world, then nothing will.

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Bastiat Predicted the Baby Formula Crisis 170 Years before It Happened

Posted by M. C. on June 7, 2022

The formula shortage is due in large part to past and present government promises of “costless” benefits. 

Like any purveyors of fiction, those who promise benefits without costs must maintain that fiction even in the face of failure. Rather than be revealed as incompetent or liars, they simply devise new promises. Today’s new promises come in the form of a government airlift of miniscule volumes of baby formula set to artificial fanfare.

https://mises.org/wire/bastiat-predicted-baby-formula-crisis-170-years-it-happened

Robert Zumwalt

The current baby formula shortage in the United States is a pressing crisis, and many in the media have been rushing to explain how such a thing could have happened. But on close analysis, it appears to share the same root as virtually every other crisis experienced in the modern world: a government promised benefits without costs.

Our political leaders either fail to understand or outright ignore the basic, unavoidable limitation on government action, that no government benefit comes without a cost. As French writer and politician Frédéric Bastiat wrote in his 1848 essay, Government:

Thus, the public has two hopes, and Government makes two promises—many benefits and no taxes. Hopes and promises that, being contradictory, can never be realized.

Now, is not this the cause of all our revolutions? For between the Government, which lavishes promises which it is impossible to perform, and the public, which has conceived hopes which can never be realized, two classes of men interpose—the ambitious and the Utopians. It is circumstances which give these their cue. It is enough if these vassals of popularity cry out to the people—”The authorities are deceiving you; if we were in their place, we would load you with benefits and exempt you from taxes.”

The current baby formula shortage is one more example of government promises running into the contradictory reality of their own hidden costs.

Government Promises and Hidden Costs

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Bastiat Leads the Way on the Morality of Forced Lockdowns | Mises Wire

Posted by M. C. on June 13, 2020

To deny workers the right to make their own decisions is to “annihilate the equal rights of our brethren.” That is immoral, and morality should always trump the law. The idea that we should make exceptions to this rule is deeply troubling, as Bastiat warned us:

When law and morality are in contradiction to each other, the citizen finds himself in the cruel alternative of either losing his moral sense, or of losing his respect for the law—two evils of equal magnitude, between which it would be difficult to choose.

https://mises.org/wire/bastiat-leads-way-morality-forced-lockdowns?utm_source=Mises+Institute+Subscriptions&utm_campaign=567a73146b-EMAIL_CAMPAIGN_9_21_2018_9_59_COPY_01&utm_medium=email&utm_term=0_8b52b2e1c0-567a73146b-228343965

On May 11, in defiance of a government lockdown order, Elon Musk reopened Tesla’s car plant in Fremont, California, which elicited a negative reaction from Noah Feldman, professor of law at Harvard Law School:

Arguably it’s possible to conceive some circumstances where a law is morally unjust and a corporation would be justified in acting like an individual, flouting the law as an act of civil disobedience in order to get it changed. But reopening a for-profit plant—and potentially endangering workers—for the sole purpose of making money isn’t a situation where morality should trump the law.

Feldman’s statement requires clarification, but I can think of only two ways to interpret it:

  1. Reopening the plant is a moral act, but morality should not trump the law in this particular situation.
  2. Reopening the plant is an immoral act because it defies the government’s moral law (or edict).

In either case, Feldman appears confused about the concept of morality and/or he is not committed to the idea that morality should always trump the law.

The principles of morality are intuitive, as Frederic Bastiat explained in his essay “The Law“:

Nature, or rather God, has bestowed upon every one of us the right to defend his person, his liberty, and his property, since these are the three constituent or preserving elements of life…

Collective right [government], then, has its principle, its reason for existing, its lawfulness, in individual right; and the common force cannot rationally have any other end, or any other mission, than that of the isolated forces for which it is substituted. Thus, as the force of an individual cannot lawfully touch the person, the liberty, or the property of another individual—for the same reason, the common force cannot lawfully be used to destroy the person, the liberty, or the property of individuals or of classes.

For this perversion of force would be, in one case as in the other, in contradiction to our premises. For who will dare to say that force has been given to us, not to defend our rights, but to annihilate the equal rights of our brethren? And if this be not true of every individual force, acting independently, how can it be true of the collective force, which is only the organized union of isolated forces?

Nothing, therefore, can be more evident than this: The law is the organization of the natural right of lawful defense.

In other words, since you and I do not have lawful authority to forcibly lock down Tesla’s car plant, neither does the government. But the government did it anyway, thereby annihilating the equal rights of our brethren. Therefore, the owners, managers, and employees of the plant were simply reclaiming their lawful rights when they illegally reopened the plant. Unfortunately, laws often lack a moral basis, as Bastiat observed:

It is so much in the nature of law to support justice that in the minds of the masses they are one and the same. There is in all of us a strong disposition to regard what is lawful as legitimate, so much so that many falsely derive all justice from law….

Unhappily, law is by no means confined to its own sphere….It has acted in direct opposition to its proper end…it has been employed in annihilating that justice which it ought to have established…it has placed the collective force in the service of those who wish to traffic, without risk and without scruple, in the persons, the liberty, and the property of others; it has converted plunder into a right, that it may protect it, and lawful defense into a crime, that it may punish it.

Let’s pick up on one of Bastiat’s points. What if the reopening of Tesla’s plant had been followed by a government attempt to forcibly shut it down, thereby annihilating the equal rights of our brethren once again? And what if Tesla’s owners, managers, and employees, or their security agents, had forcibly resisted the government? In this case, both sides are using force, but only the Tesla group would have a legitimate claim to the moral high ground, because they would have been doing nothing more than defending themselves, their liberty, and their property against government aggression—in other words, they would have been engaged in lawful defense.

However, according to Bastiat’s observation that “the law converts lawful defense into a crime, that it may punish it,” the government would then have claimed legal authority to use overwhelming force to punish those evil Tesla criminals. And Feldman would likely have supported the government’s aggression,1 because, according to him, Tesla is “potentially endangering workers” by reopening the plant.

However, Feldman is assigning responsibility to the wrong party. None of Tesla’s owners or managers are forcing anyone to return to work. Each worker has the right to consider the safeguards that Tesla has or has not implemented and to make a decision about returning to work based on their subjective assessment of potential risk.

Feldman’s sophistry notwithstanding, those who decide to return to work are acknowledging and accepting the risk of potentially exposing themselves to the virus, or any number of other potential mishaps that we all face every day. For example, when we walk, cycle, or drive to work, or anywhere else, for that matter, we acknowledge and accept the potential risk of encountering careless, inexperienced drivers, as well as poor road conditions and bad weather, which we know results in millions of deaths and serious injuries every year.

To deny workers the right to make their own decisions is to “annihilate the equal rights of our brethren.” That is immoral, and morality should always trump the law. The idea that we should make exceptions to this rule is deeply troubling, as Bastiat warned us:

When law and morality are in contradiction to each other, the citizen finds himself in the cruel alternative of either losing his moral sense, or of losing his respect for the law—two evils of equal magnitude, between which it would be difficult to choose.

Professor Feldman may be a legal expert, but he seems unable to consistently identify injustice through an application of moral principles—and principles, by definition, are not open to compromise. A moral injustice is a legal injustice, period.

 

 

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How War Created Taxation – Antiwar.com Original

Posted by M. C. on June 12, 2019

…the question of politics being the continuation of war by other means.

https://original.antiwar.com/luke_henderson/2019/06/11/how-war-created-taxation/

“Liberty tends inevitably to lead to the just equivalence of services, to bring greater and greater equality, to raise all men up to the same, constantly rising standard of living, […] it is not property that we should blame for the sad spectacle of grievous inequality that the world once again offers us, but the opposite principle, plunder, which has unleashed on our planet wars, slavery, serfdom, feudalism, […] and the absurd demand of everyone to live and develop at the expense of everyone else.”

19th-century French politician Frederic Bastiat declared this statement in his fifth letter of what is now called Property and Plunder to demonstrate that taxation and attempts to force economic equality would ultimately do more harm than good. This last letter also calls forth an important question: is taxation the creation of a warring state?

In antiquity, according to Bastiat, war developed from a nation that would instead of creating their own wealth, would wait for other nations to acquire their own property and then proceed to conquer them. After many victories where the citizens would be slaughtered and their property confiscated, these warring nations came to a realization that “putting the vanquished to the sword amounted to destroying a treasure” because they lost any potential wealth the conquered would create. They resorted to slavery to “put plunder on a permanent footing,” and truly acquire all property and services one would acquire.

Though there were actual slaves, the main method of continuing plunder was to enact tolls and taxes for protection from the ruling nation. This set a precedent that can still be seen today of taxation being the primary means of funding and maintaining war. These ruling nations and monarchies, however, ran into the problem of civil unrest because of the clear division between conqueror and conquered and birthed what has become modern politics.

In the collection of lectures titled Society Must Be Defended, postmodernist philosopher Michel Foucault ponders the question of politics being the continuation of war by other means. Among the many ideas discussed, Foucault shows how history and knowledge were narratives created in order to support war, and were the precondition of politics.

He notes how history was used as a tool by nobility to convince the royalty of the magnificence of his victories and where all discourse “explains contemporary events in the terms of contemporary events, power in terms of power, and the letter of the law of the will of the king and vice versa.” At the same time, the idea of equality was being used as a tool to cause unrest between a nation’s citizens and its aristocracy.

“In other words, a device typical of all despotism […] was used to convince inferiors that a little more equality would do them more good than much greater freedom for all,” states Foucault. It was these factors that contributed to politics becoming the in-between of war. Whereas before the dominated had no say in the conquests of their domineers, now they had a slight say in the activities of the State.

To justify war, the elected bodies had to resort to new means to encourage war and, simultaneously, taxation which Foucault describes as a “race war.” The race war is the “us vs. them” narrative between the noble warring group and the savage enemy and is used to justify the murders and other atrocities the State will commit in the name of war. Everything that Bastiat and Foucault describe is evident if one looks at the history of wars in the United States.

Desperate to defeat the Confederacy, President Abraham Lincoln enacted a 3% income tax to fund more troops. However, enforcement failed and the government had to pay off its massive debt through printing $150 million. Its legacy was not forgotten though and many congressmen of the time felt that an income tax was an inevitable future for the country.

Congress passed the nation’s first permanent income tax in 1913 and since then has continually used war as a way to steadily increase the rate. During World War One, the United States raised the highest tax bracket from 15% to 67% and did not drop to pre-war levels after it ended. World War Two was even worse with any income over $2.5 million (in today’s dollars) being taxed a 92%, and only going to 70% at it’s lowest for nearly 30 years.

During those 30 years, the US went to war in Vietnam, Korea, and intervened in many other nations to fight the enemy of communism. This was the greatest demonstration of Foucault’s race wars, as it allowed the continuation of high taxes and shows the use of politics to continue wartime status from decades prior.

It cannot be denied that war and taxation are inextricably linked. Unfortunately, history, Bastiat, and Foucault seem to show that the only true way to eliminate excessive taxation and government overreach is to halt its hunger for conquest. The task is immense, but if taxation’s origins and the State’s methods of justification can be recognized, the task can commence.

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