The Utopian Free-Trader

The following is excerpted from Bastiat’s collection of essays, “Economic Sophisms.” Used with permission via the Gutenberg Project. 

If I were but one of His Majesty’s ministers!…

“Well, what would you do?”

“I should begin by—by—faith, by being very much at a loss. For it is clear I could only be a minister in consequence of having the majority in my favour; I could only have the majority in my favour by securing the popular suffrage; and I could attain that end, honestly at least, only by governing in accordance with public opinion. If I should attempt to carry out my own opinions, I should no longer have the majority; and if I lost the favour of the majority, I should be no longer one of His Majesty’s ministers.”

“But suppose yourself already a minister, and that you experience no opposition from the majority, what would you do?”

“I should inquire on what side justice lay.”

“And then?”

“I should inquire on what side utility lay.”

“And then?”

“I should inquire whether justice and utility were in harmony, or ran counter to one another.”

“And if you found they were not in harmony?”

“Je dirais au roi Philippe: Reprenez votre portefeuille. La rime n’est pas riche et le style en est vieux; Mais ne voyez-vous pas que cela vaut bien mieux, Que ces transactions dont le bon sens murmure, Et que l’honnêtete parle là toute pure.”

“But if you found that the just and the useful were one and the same thing?”

“Then I should go straight forward.”

“True; but to realize utility by means of justice, a third thing is needed.”

“What?”

“Possibility.”

“You granted me that.”

“When?”

“Just now.”

“How?”

“In assuming that I had the majority on my side.”

“A most dangerous concession, I fear; for it implies that the majority see clearly what is just, see clearly what is useful, and see clearly that both are in perfect harmony.”

“And if they see clearly all this, good results will work themselves out, so to speak, of their own accord.”

“You always bring me back to this, that no reform is possible apart from the progress of general intelligence.”

“Assuming this progress, every needed reform will infallibly follow.”

“True; but this presupposed progress is a work of time. Suppose it accomplished, what would you do? I am anxious to see you actually and practically at work.”

“I should begin by reducing the rate of postage to a penny.”

“I have heard you speak of a halfpenny.”

“Yes, but as I have other reforms in view, I should proceed prudently, in the first instance, to avoid any risk of a deficit.”

“Fine prudence, to be sure! You have already landed yourself in a deficit of 30 millions of francs.”

“Then I should reduce the salt-tax to 10 francs.”

“Good. Then you land yourself in a deficit of other thirty millions. You have doubtless invented a new tax?”

“Heaven forbid! And besides, I do not flatter myself with possessing an inventive genius.”

“It will be very necessary, however…. Ah! I see. What was I thinking of? You intend simply to reduce the expenditure. I did not think of that.”

“You are not singular. I shall come to that; but for the present, that is not the resource on which I depend.”

“What! you are to diminish the revenue without reducing the expenditure, and withal avoid a deficit!”

“Yes; by diminishing other taxes at the same time.”

(Here the interlocutor, raising the forefinger of the right hand to his forehead, tossed his head, as if beating about for ideas.)

“By my faith! a most ingenious process. I pay over 100 francs to the Treasury; you relieve me to the extent of 5 francs upon salt, and 5 francs upon postages; and in order that the Treasury may still receive 100 francs, you relieve me to the extent of 10 francs on some other tax.”

“Exactly; I see you understand what I mean.”

“The thing seems so strange that I am not quite sure that I even heard you distinctly.”

“I repeat, I balance one degrèvement by another.”

“Well, I happen to have a few minutes to spare, and I should like much to hear you explain this paradox.”

“Here is the whole mystery. I know a tax which costs the taxpayer 20 francs, and of which not one farthing ever reaches the Treasury. I relieve you of one-half, and I see that the other half finds its way to the Hôtel des Finances.”

“Truly you are an unrivalled financier. And what tax, pray, do I pay which does not reach the Treasury?”

“How much does this coat cost you?”

“100 francs.”

“And if you procured the cloth from Verviers, how much would it cost you?”

“80 francs.”

“Why, then, did you not order it from Verviers?”

“Because that is forbidden.”

“And why is it forbidden?”

“In order that the coat may cost 100 instead of 80 francs.”

“This prohibition, then, costs you 20 francs.”

“Undoubtedly.”

“And where do these 20 francs go to?”

“Where should they go to, but into the pocket of the cloth-manufacturer?”

“Well, then, give me 10 francs for the Treasury, I will abrogate the prohibition, and you will still be a gainer of 10 francs.”

“Oh! I begin to follow you. The account with the Treasury will then stand thus: The revenue loses 5 francs upon salt, and 5 upon postages, and gains 10 francs upon cloth. The one balances the other.”

“And your own account stands thus: You gain 5 francs upon salt, 5 francs upon postages, and 10 francs upon cloth.”

“Total, 20 francs. I like your plan; but what comes of the poor cloth-manufacturer?”

“Oh! I have not lost sight of him. I manage to give him compensation likewise by means of degrèvements which are profitable to the revenue; and what I have done for you as regards cloth, I do for him as regards wool, coals, machinery, etc., so that he is enabled to reduce his price without being a loser.”

“But are you sure that the one will balance the other?”

“The balance will be in his favour. The 20 francs which I enable you to gain upon cloth, will be augmented by the amount I enable you to save upon corn, meat, fuel, etc. This will amount to a large sum; and a similar saving will be realized by each of your 35 millions of fellow-countrymen. In this way, you will find the means of consuming all the cloth produced at Verviers and Elbeuf. The nation will be better clothed; that is all.”

“I shall think over it; for all this, I confess, confuses my head somewhat.”

“After all, as regards clothing, the main consideration is to be clothed. Your limbs are your own, and not the property of the manufacturer. To protect them from the cold is your business and not his! If the law takes his part against you, the law is unjust; and we have been reasoning hitherto on the hypothesis that what is unjust is injurious.”

“Perhaps I make too free with you; but I beg you to complete the explanation of your financial plan.”

“I shall have a new law of Customs.”

“In two volumes folio?”

“No, in two articles.”

“For once, then, we may dispense with repeating the famous axiom, ‘No one is supposed to be ignorant of the law’—Nul n’est cerne ignorer la loi; which is a fiction. Let us see, then, your proposed tariff.”

“Here it is:

“‘Art. 1st.—All imported merchandise shall pay a duty of 5 per cent. ad valorem.'”

“Even raw materials?”

“Except those which are destitute of value.”

“But they are all possessed of value, less or more.”

“In that case they must pay duty, less or more.”

“How do you suppose that our manufacturers can compete with foreign manufacturers who have their raw materials free?”

“The expenditure of the State being given, if we shut up this source of revenue, we must open another. That will not do away with the relative inferiority of our manufactures, and we shall have an additional staff of officials to create and to pay for.”

“True. I reason as if the problem were to do away with taxation, and not to substitute one tax for another. I shall think over it. What is your second article?”

“‘Art. 2d.—All merchandise exported shall pay a duty of 5 per cent, ad valorem.'”

“Good gracious! Monsieur l’Utopiste. You are going to get yourself pelted, and, if necessary, I myself will cast the first stone.”

“We have taken for granted that the majority are enlightened.”

“Enlightened! Can you maintain that export duties will not be onerous?”

“All taxes are onerous; but this will be less so than others.”

“The carnival justifies many eccentricities. Please to render plausible, if that be possible, this new paradox.”

“How much do you pay for this wine?”

“One franc the litre.”

“How much would you have paid for it outside the barrier?”

“Half a franc.”

“What is the reason of this difference?”

“Ask the octroi, which has imposed a tax of half a franc upon it.”

“And who established the octroi?”

“The Commune of Paris, to enable them to pave and light the streets.”

“It resolves itself, then, into an import duty. But if the neighbouring communes had erected the octroi for their profit, what would have been the consequence?”

“I should not the less have paid one franc for wine worth half a franc, and the other half franc would have gone to pave and light Montmartre and the Batignoles.”

“So that, in effect, it is the consumer who pays the tax.”

“That is beyond all doubt.”

“Then, in imposing an export duty, you make the foreigner contribute to your expenditure.”

“Pardon me, that is unjust.”

“Why? Before any commodity can be produced in a country, we must presuppose as existing in that country education, security, roads, which are all things that cost money. Why then should not the foreigner bear the charges necessary to the production of the commodity of which ultimately he is the consumer?”

“That is contrary to received ideas.”

“Not in the least. The last buyer must bear the whole cost of production, direct and indirect.”

“It is in vain that you argue on this subject. It is self-evident that such a measure would paralyze trade, and shut all markets against us.”

“This is a mistake. If you paid this tax over and above all others, you might be right. But if the 100 millions levied by this means relieved the taxpayer to a corresponding extent of other burdens, you would reappear in the foreign market with all your advantages, and even with greater advantages, if this tax shall have given rise to less complication and expense.”

“I shall think over it. And now that we have put salt, postages, and customs duties on a new footing, does this end your projected reform?”

“On the contrary, we are only beginning.”

“Pray give me some account of your other utopian schemes.”

“We have already given up 60 millions of francs on salt and postages. The Customhouse affords compensation, but it gives also something far more precious.”

“And what is that, if you please?”

“International relations founded on justice, and a probability of peace nearly equal to a certainty. I disband the army.”

“The whole army?”

“Excepting the special arms, which will be recruited voluntarily like all other professions. You thus see the conscription abolished.”

“Be pleased, Sir, to use the word recruitment.”

“Ah! I had forgotten; how easy it is in some countries to perpetuate and hand down the most unpopular things by changing their names!”

“Thus, droits reunis have become contributions indirectes.”

“And gendarmes have taken the name of gardes municipaux.”

“In short, you would disarm the country on the faith of a utopian theory.”

“I said that I should disband the army—not that I would disarm the country. On the contrary, I intend to give it invincible force.”

“And how can you give consistency to this mass of contradictions?”

“I should call upon all citizens to take part in the service.”

“It would be well worth while to dispense with the services of some of them, in order to enrol all.”

“You surely have not made me a minister in order to leave things as they are. On my accession to power, I should say, like Richelieu, ‘State maxims are changed.’ And my first maxim, the one I should employ as the basis of my administration, would be this: Every citizen must prepare for two things—to provide for his own subsistence, and to defend his country.”

“It appears to me, at first sight, that there is some show of common sense in what you say.”

“Consequently, I should base the law of national defence on these two enactments:

“‘Art. 1st.—Every able-bodied citizen shall remain sous les drapeaux for four years—namely, from 21 to 25—for the purpose of receiving military instruction.'”

“A fine economy, truly! You disband four hundred thousand soldiers to create ten millions.”

“Listen to my second article:

“‘Art. 2d.—Unless it is proved that at 21 years of age he knows perfectly the platoon drill.'”

“Nor do I stop here. It is certain that in order to get quit of four years’ service, there would be a terrible emulation among our youth to learn the par le flanc droit and the charge en douze temps. The idea is whimsical.”

“It is better than that. For without bringing families to grief, without encroaching on equality, would it not secure to the country, in a simple and inexpensive manner, 10 millions of defenders capable of setting at defiance all the standing armies of the world?”

“Really, if I were not on my guard, I should end with taking a serious interest in your conceits.”

Utopian free-trader getting excited. “Thank Heaven! here is my Budget relieved of 200 millions. I suppress the octroi. I remodel indirect contributions. I…”

“Oh! Monsieur l’Utopiste!”

Utopian free-trader getting more and more excited. “I should proclaim freedom of worship, freedom of teaching, and new resources. I would buy up the railways, pay off the public debtr and starve out stockjobbers.”

“Monsieur l’Utopiste!”

“Set free from a multiplicity of cares, I should concentrate all the powers of government in the repression of fraud, and in the administration of prompt and cheap justice; I….

“Monsieur l’Utopiste, you undertake too many things; the nation will not support you!”

“You have granted me a majority.”

“I withdraw it.”

“Be it so. Then I am no longer a minister, and my projects will continue to be what they were—Utopias.”

Claude-Frédéric Bastiat was a French economist and author who was a prominent member of the French Liberal School.

Photo by Samuel Zeller via Unsplash.

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