principle” to the formation of declarations of rights and constitutions and to the development of government policies regarding price controls, make-work schemes, and other economic interventions by the state. Such an extreme form of despotism frightened many French citizens in the 1790s. These citizens, seeking security and stability, turned toward a Roman-inspired form of despotism,19 such as that offered by Napoléon Bonaparte.
After lurching from the radicalism of the Jacobins to the militaristic dictatorship of Napoléon and to the conservatism of the restored Bourbon monarchy, the French people seemed to have settled upon a form of political
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armistice after the July revolution, with the forces of revolution and counterrevolution achieving a kind of temporary balance. Bastiat, however, unhappily believed that the French continued to educate their youth with the ideas of Rousseau and Caesar, thus trapping them in a maze that began with dreams of utopia, followed by experimentation in an attempt to create this utopia on earth, and then finally political reaction after these dreams inevitably fell apart. In its incarnation in the revolutionary period this maze began with the ideas of Rousseau, was followed by the revolutionary communism of Robespierre and his followers, and ended in the military despotism of Napoléon. In 1848 it looked to Bastiat as if France were going to repeat this pattern all over again, this time under the influence of the new socialist movement that had sprung up in the 1840s.
PEACE, LIBERTY, AND TAXES
In the pamphlet “Peace and Freedom or the Republican Budget” (1849), Bastiat’s skill as a writer and thinker enables him to rapidly turn the mundane topic of the national budget into one of principle and high theory. He quickly goes beyond strict budgetary considerations to reach a high level of theoretical analysis and, in so doing, provides an original and audacious contribution to the field of tax theory. In fact, he may be the first author to support the idea that “taxes kill taxes”—in other words, the concept known in our own time as the Laffer Curve.
In this text Bastiat blames both the “financiers,” who try to obtain fiscal equilibrium by taxing people, and the so-called advanced republicans, who make so many promises to their constituents that an increase in taxes is unavoidable. Bastiat believed that it was important to secure the stability of the young republic by alleviating the tax burden on the people, thus inducing them to “love the republic.” For Bastiat, in order for public finance to blossom, the rational thing to do would be to decrease tax rates, not increase them, because, for the state, “taxing more is to receive less.”20 Bastiat does not hesitate to write that even if there is a budget deficit, taxes must be reduced, as much out of principle as out of the recognition that economic hardship has been so severe that the people have to receive some relief. As he put it, such a solution “is not boldness, it is prudence”!21
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THE LEFT, TAXES, AND TRADE UNIONS
In Bastiat’s lifelong quest to instill into the French people the ideals of liberty, peace, and prosperity—that is, those principles today associated with the conservative right—Bastiat sat on the parliamentary benches with the left. His political position is more easily understood if one remembers that, in his time, those who sat on the right in the Assembly were mainly conservatives, not classical liberals. They were nostalgic for the ancien régime of the pre-1789 period, namely the era of the monarchy and aristocratic class privileges. In fact, Bastiat was very critical of the efforts made by the wealthiest and most politically connected individuals to protect their own interests by manipulating the power of the legislature and the state. Like his friend and colleague in England Richard Cobden, Bastiat passionately believed that in advocating for free markets, low taxes, and free trade he was defending the interests of the poor.
The difficulty of Bastiat’s balancing act in the Assembly between left and right can clearly be seen in the reaction to two of his speeches: “Discourse on the Tax on Wines and Spirits” (1849) and “The Repression of Industrial Unions” (1849).
In the first speech Bastiat, who represented an agricultural district in which the production of wine was particularly important, attempts to convince his colleagues that the farmers in his locality have to bear an unfair tax burden. He defends the interests of his constituents without compromising what he rightly considers to be the lessons of sound economic theory. What is particularly striking in this speech is the fact that he receives applause from those sitting on the left’s benches. Bastiat points out that poor people suffer the most from state interventionism and that politically influential businessmen are able to induce the state to pass laws giving them protection from foreign competition, with the result that higher prices are created for ordinary consumers.
Bastiat concludes therefore that liberalizing trade and freeing up markets benefit the poor. Note that in Bastiat’s time, as in ours, it was a commonly held view that liberals (in the classical sense of the word) supported business interests over the interests of ordinary consumers. It is fascinating to discover that when Bastiat gave this speech, both the champions of the poor and the supporters of the republic (the left) seemed to understand what he was saying and to approve it. Unfortunately, the applause he received in the Assembly was not followed up by any concrete legislation to bring about the reforms he advocated.
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In the second speech, “The Repression of Industrial Unions,” Bastiat opposes legislation that restricts the right of workers to form the unions proposed by the right. Bastiat explains why both businessmen and workers must be granted the freedom to form trade unions; he argues that “the word union is synonymous with association”22 and that human freedom implies the right to associate with whomever and for whatever purpose one chooses. In addition, Bastiat strongly supports the right to strike, since an individual can legitimately decline to sell his or her work and “when it [an action] is innocent in itself, it cannot become guilty because it is carried out by a large number of individuals.”23 He further proclaims, “For what is a slave if not a man obliged by law to work under conditions that he rejects?” This sentence was greeted in the Assembly with repeated shouts of “Hear! Hear!” from the benches of the left.
Contrary to frequently held modern views, Bastiat’s belief is that a consistent (classical) liberal is necessarily against all forms of slavery and is in favor of the right to associate and also to strike, with the important condition that violence is not used. Thus, the state should not forbid trade unions and strikes, but it should punish those who use violence in any strike-related activity. On the basis of these clear principles of individual liberty, Bastiat supported the proposal to allow the creation of trade unions, concluding that “only principles have the power to satisfy people’s minds, to win over their hearts, and to unite all serious minds.”24
THE ECONOMISTS, THE SOCIALISTS, AND LEGAL PLUNDER
According to Bastiat and the liberal, free-trade political economists of his time, there was only one school of economics, that of Les Économistes.25 On the other hand, there were many schools of socialism, all of which opposed the ideas of Les Économistes. The reason for this difference is straightforward in Bastiat’s view: true economists are concerned with principles, and if people agree on principles they cannot express conflicting or incoherent statements. On the contrary, socialists want to rebuild human nature and each school has its own recipe for changing society. Bastiat expresses this view clearly in “Justice and Fraternity” (1848): “I believe that what radically
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divides us is this: political economy reaches the conclusion that only universal justice should be demanded of the law. Socialism, in its various branches and through applications whose number is of course unlimited, demands in addition that the law should put into
