Tuesday, September 3, 2019

Bastiat on Foreign Trade


There Are No Absolute Principles

From ECONOMIC SOPHISMS By Frederic Bastiat

We cannot wonder enough at the facility with which men resign themselves to continue ignorant of what it is most important that they should know; and we may be certain that such ignorance is incorrigible in those who venture to proclaim this axiom: There are no absolute principles.

You enter the legislative precincts. The subject of debate is whether the law should prohibit international exchanges, or proclaim freedom.

A deputy rises, and says:

If you tolerate these exchanges, the foreigner will inundate you with his products: England with her textile fabrics, Belgium with coals, Spain with wools, Italy with silks, Switzerland with cattle, Sweden with iron, Prussia with corn; so that home industry will no longer be possible.

Another replies:

If you prohibit international exchanges, the various bounties which nature has lavished on different climates will be for you as if they did not exist. You cannot participate in the mechanical skill of the English, in the wealth of the Belgian mines, in the fertility of the Polish soil, in the luxuriance of the Swiss pastures, in the cheapness of Spanish labour, in the warmth of the Italian climate; and you must obtain from a refractory and misdirected production those commodities which, through exchange, would have been furnished to you by an easy production.

Assuredly, one of these deputies must be wrong. But which? We must take care to make no mistake on the subject; for this is not a matter of abstract opinion merely. You have to choose between two roads, and one of them leads necessarily to poverty.

To get rid of the dilemma, we are told that there are no absolute principles.

This axiom, which is so much in fashion nowadays, not only countenances indolence, but ministers to ambition.

If the theory of prohibition comes to prevail, or if the doctrine of free trade comes to triumph, one brief enactment will constitute our whole economic code. In the first case, the law will proclaim that all exchanges with foreign countries are prohibited; in the second, that all exchanges with foreign countries are free; and many grand and distinguished personages will thereby lose their importance.

But if exchange does not possess a character which is peculiar to it,—if it is not governed by any natural law,—if, capriciously, it be sometimes useful and sometimes detrimental,—if it does not find its motive force in the good which it accomplishes, its limit in the good which it ceases to accomplish,—if its consequences cannot be estimated by those who effect exchanges;—in a word, if there be no absolute principles, then we must proceed to weigh, balance, and regulate transactions, we must equalize the conditions of labour, and try to find out the average rate of profits—a colossal task, well deserving the large emoluments and powerful influence awarded to those who undertake it.

On entering Paris, which I had come to visit, I said to myself, Here are a million of human beings, who would all die in a short time if provisions of every kind ceased to flow towards this great metropolis. Imagination is baffled when it tries to appreciate the vast multiplicity of commodities which must enter to-morrow through the barriers in order to preserve the inhabitants from falling a prey to the convulsions of famine, rebellion, and pillage. And yet all sleep at this moment, and their peaceful slumbers are not disturbed for a single instant by the prospect of such a frightful catastrophe. On the other hand, eighty departments have been labouring to-day, without concert, without any mutual understanding, for the provisioning of Paris. How does each succeeding day bring what is wanted, nothing more, nothing less, to so gigantic a market? What, then, is the ingenious and secret power which governs the astonishing regularity of movements so complicated, a regularity in which everybody has implicit faith, although happiness and life itself are at stake? That power is an absolute principle, the principle of freedom in transactions. We have faith in that inward light which Providence has placed in the heart of all men, and to which He has confided the preservation and indefinite amelioration of our species, namely, a regard to personal interest—since we must give it its right name—a principle so active, so vigilant, so foreseeing, when it is free in its action. In what situation, I would ask, would the inhabitants of Paris be, if a minister should take it into his head to substitute for this power the combinations of his own genius, however superior we might suppose them to be—if he thought to subject to his supreme direction this prodigious mechanism, to hold the springs of it in his hands, to decide by whom, or in what manner, or on what conditions, everything needed should be produced, transported, exchanged, and consumed? Truly, there may be much suffering within the walls of Paris—poverty, despair, perhaps starvation, causing more tears to flow than ardent charity is able to dry up; but I affirm that it is probable, nay, that it is certain, that the arbitrary intervention of government would multiply infinitely those sufferings, and spread over all our fellow-citizens those evils which at present affect only a small number of them.

This faith, then, which we repose in a principle, when the question relates only to our home transactions, why should we not retain, when the same principle is applied to our international transactions, which are undoubtedly less numerous, less delicate, and less complicated? And if it is not necessary that the prefecture should regulate our Parisian industries, weigh our chances, balance our profits and losses, see that our circulating medium is not exhausted, and equalize the conditions of our home labour, why should it be necessary that the Customhouse, departing from its fiscal duties, should pretend to exercise a protective action over our external commerce?


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