Frederic Bastiat’s 1848 essay “What is Seen and What is not Seen”, presciently exploded the foundation of Keynesian economic theory 35 years before Keynes’ birth and nearly a century before our greatest experiment in that idea – the New Deal.  In particular, he called out the importance of looking beyond the immediate expected results of economic policies and decisions when he wrote “the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.”  Consider the following excerpt from the section entitled “The Broken Window.”

…if… you conclude, as happens only too often, that it is good to break windows, that it helps to circulate money, that it results in encouraging industry in general, I am obliged to cry out: That will never do! Your theory stops at what is seen. It does not take account of what is not seen.

The central point – which is habitually overlooked in Keynesian ideology – is that simply moving money from one party to another does not make it grow.  The value of our labor and investments grows when productivity increases.  Bailout and stimulus spending in 2008 and 2009 largely went to projects or supposed crises that did nothing whatsoever to increase productivity.  In many cases, the funds were either wasted or hoarded.  If you pour the money into fixing potholes, some of it does ripple through the economy, but the effect is a one-time event as opposed to the lasting effect and new opportunities associated with new investments – or better yet – the investments and innovations possible when those funds remain in the productive sector.

Stimulus and bailout spending is inflationary by definition because it increased the supply of currency.  This is true whether the spending came in the form of existing treasury funds that were released, additional debt instruments sold, or funds that were simply conjured out of thin air (the balance of the total after accounting for existing funds and debt financing).  For now, let’s consider the case of bailouts to financial institutions.  The U.S. Treasury released existing funds to these entities with the stated intention to stimulate new lending.  Perceiving uncertainty and the risk that goes with it, these banks predictably parked the money.  A happy side effect of this non-action is that those funds then had little immediate inflationary potential.  Even if they had been distributed as loans, though, they were existing dollars and would not have had as much currency dilution/inflationary effect of those funds newly borrowed or invented by the Treasury.

To frame this in more concrete terms, let’s look at a billion dollars, invested by the productive sector.  Economic multipliers depend on the phenomenon that any person or company that is paid an amount of money will spend (consume) a portion of it and save a portion of it.  These portions are called marginal propensity to consume (MPC) and marginal propensity to save (MPS) (MPS = 1 – MPC).  The equation for the economic multiplier, then, is:

M = 1/MPS or M = 1/(1 – MPC)

If the marginal propensity to save were 20%, the economic multiplier for the billion dollars we are considering would be 1/0.20 = 5, or $5 billion of total money movement through the economy.  The multiplier concept is not controversial, but is of special importance to Keynesian theory because it assumes that an initial stimulus of government spending will jump start economic activity in a widespread fashion.

The fatal flaw in the jump-start assumption is the fact that the money the government spends, supposedly to stimulate the productive sector, must be taken from the very same group.  With this, the historically active, innovative entities no longer have as much money to invest.  In fact, with each spending iteration this sector has smaller and smaller fractions of the money that was taken from it.  Further aggravating the problem, government processes tend to be significantly less efficient than private sector processes.  This implies an efficiency loss (EL) factor that needs a home in the equation: M = 1/(MPS x EL).  This is a large part of “what is not seen” in the stimulus/bailout picture.  The outcome is a smaller potential multiplier than if the funds had remained in the productive sector and a weaker currency.

In a recent column Doug French, President of the Mises Institute, summarized the inflationary implications of the issue writing “The government’s legal-tender money — the dollar — is now under questioning. While the commercial-banking fractional-reserve monetary engine is stalled with loan write-downs and bank failures, the Federal Reserve has expanded its balance sheet like never before. Man of the Year Ben Bernanke is deathly afraid of deflation, and John Maynard Keynes is a hero again. The inflation cake is in the oven, albeit not quite fully baked.”

A regular guy’s guide to historical economics

(Or economics from the hood)

“All the measures of law should protect property and punish plunder”

Frederic Bastiat, 1849

The Law perverted!  And the police powers of the state perverted along with it!  The law, I say, not only turned from its proper purpose but made to follow an entirely contrary purpose! The law becomes the weapon of every kind of greed!  Instead of checking crime, the law itself guilty of the evils it is supposed to punish!  If this is true, it is a serious fact, and moral duty requires me to call the attention of my fellow-citizens to it.

Frederick Bastiat, 1849

Drat.  The plan being to move on to my next post, away from Frederic Bastiat and on to the next historical beacon of free market wisdom has been foiled.  Just as I didn’t feel one post (see the Liberty Through Knowledge blog’s first two posts bottom of the site) on Friedrich Hayek was sufficient, I now realize that one on Frederic Bastiat will not do sufficient justice to the Liberty Through Knowledge Blog. 

My last post touched on Bastiat’s book The Law.  In continuing to read this book, one finds that the parallels between Bastiat’s concerns about France’s rapid descent into socialism in 1848, and our current political and economic quandary become frighteningly prescient.  (And I use the word frighteningly as a metaphor for something probably more appropriate, such as calamitous?)

The Law is solely a compilation of short statements.  It being impossible to do justice to the book as a whole, I’ll review a few specific ones and then briefly illustrate the parallels to the current political majority’s mindset and goals.  (Goals acknowledged, professed, conceded, declared, … or not.)

What follows is a brief explanation of a few selected statements/paragraphs from The Law and their applicability to our modern times.

The Law- Property and Plunder

The main gist of the title of this paragraph is best illuminated by Bastiat’s quote:  “…it is easy to understand how law, instead of checking injustice, becomes the invincible weapon of injustice.”  OK, this one’s easy.  How about income redistribution?  (Yes, a rhetorical question.)  Income redistribution can be viewed as a textbook definition of plundering someone’s property.  How about the new never ending surtax proposals on the rich ([i]or some bureaucrat’s definition of rich anyway), or cash for clunkers: [ii]$24K thereabouts- yes that’s three zero’s, yes that’s per vehicle, and yes that’s per tax payer – per clunker purchased.  So that’s 24K of taxpayer’s dollars redistributed (to newly government and union owned GM and Chrysler and new car buyers) for some czar’s personal concept (see the last paragraph of this post) of the [iii] “greater good”.

The Law- What is Law?

An excerpt from What is Law? states:  “…Since an individual cannot lawfully use force against the person, liberty or property of another individual, then the [“common good”] – for the same reason – cannot lawfully be used to destroy the person, liberty, or property of individuals or groups.”  The first modern parallel that comes to mind is the infamous Kelo decision.  Upheld by five of the non-originalist members of the Supreme Court, this decision removed the property of the plaintiff. (Susan Kelo’s home.)  Amendment V of the constitution states “…nor shall private property be taken for public use…”  (Emphasis added.)  Happily for detractors of Bastiat, including those who don’t believe in the uniform rule of law, the property was usurped to allow a private company to use the land, exercising the tortured viewpoint that tax revenues would benefit the “public use”.  Although admittedly Amendment V essentially explains eminent domain rather than authorizes it, a history of solid case law explains the founder’s intent.  For example much modern case law on eminent domain delineates its application to matters of public safety, public health, valid transportation requirements, and law and order.  Not to tax revenues from a private concern.

Oh ya -and by the way the private company granted land rights through this decision has pulled up stakes and skedaddled.  (How ironic…  :|   Bet you haven’t read that in the New York Times.)

The Law- The Results of Legal Plunder

The title leads us in perfectly, as does Bastiat’s own first sentence: “…the conversion of the law into an instrument of plunder”.  His description of the purpose of law is to maintain justice.  Therefore any law specifically designed to favor one special interest group or another, forces an unwanted contradiction upon the law abiding citizen.  When citizens recognize an immoral public statute, they now find themselves in a quandary: give up your moral sense of justice or lose respect for the law.  The clear recognition of legal plunder forces law abiding citizens into this conundrum.

Fast forwarding into the 21^st century, let’s illuminate where we’re going with this.  The recent Senate passage of health care legislation contained several peculiar sops to a few particular states.  (Specifically Nebraska, Florida and Louisiana.)  Health care legislation also could force individuals against their will off of employer health care and onto a public option, while exempting the very legislators voting for the bill (60% of the Senate right down party lines by the way) from its egregious mandates.  How (yes- – again meant rhetorically) would Bastiat with his concern for a moral sense of the law and respect for uniformly applied justice view these modern shenanigans?

The Law- The Socialists Despise Mankind, and The Socialists Wish to Play God

These two paragraphs are the last I’ll review in this post.  (And I thank the readers for accommodating one final time traveling parallel.)  These two paragraphs in The Law offer truly stunning similarities between our hero Bastiat’s 19^th century concerns, and this current disconcerting challenge to our liberty.  Bastiat here ponders the tendency of socialists (read the House Financial Services Committee) to “…. Look upon people as raw material to be formed into social combinations”, as in “… between the inventor and his elements [or] the Gardner and his trees.

So here’s the “stunning similarities angle”:  The current President, when questioned about the wisdom of government intervention in the economy while he was campaigning said this (paraphrased): “Just as in the space program, I intend to experiment to find out what works until a solution is found”.  Bastiat calls this mentality high handed at the least.  The attitude here being that with enough experimenting government can rectify all of society’s ills.  Bastiat then – with tongue firmly implanted in cheek – states that: “the socialists believe that they have a creative power whose sublime mission is to mold these scattered [materials (read people)] into a society.”

Our friend Frederic then continues this description of 1949 France’s legislators (and by inference our current political majority party’s) mindset:    [iv]Mankind = evil, legislators = good;    mankind = darkness, legislators = enlightened;     mankind = drawn towards vice, legislators = virtuous.    So by inference, our law makers’ arrogance now becomes instituted by force.  Either by actual force as in communism – or by as Friedrich Hayek puts it: arbitrary coercion.

Arbitrary coerciveness by the government knows no bounds: LBJ’s Great Society programs, the Community Reinvestment Act, high corporate taxes (et al.), affirmative action, [v]politically correct textbook alteration  (yes censoring), and one more essential example of unjust coerciveness that can’t be left out:  the Supreme Court decision granting enemy combatants constitutional protections.  One of the consequences of course being the endangerment of U.S. citizens by the necessary release of classified information outside of military tribunals.  This arbitrary and unjust application of the law by necessity hamstrings our soldiers on the battlefield by potentially putting them into the position of having to grant Miranda Rights.  (Not to mention having to pick up shell casings with a pencil, ala Miami CSI?  Or is that Kandahar CSI?)

The rule of law and a moral sense of justice are evaporating into the ether.  Destructive altruism, invasive social engineering and moral superiority by our lawmakers seep past our constitutional protections just as water leaks through a dam.  Heed Frederic Bastiat’s warnings.

Comments con and pro most welcome.  Really.

[ii] edmunds.com Senior Analyst David Tompkins, PhD

[iii] For those not convinced that “Cash for Clunkers” isn’t a greater good: consider estimates by the Dept. of Energy of a total of 4.5 hours driving worth of gas saved per year U.S. wide.  So you’re still not convinced this isn’t worth five figures of tax payers $ per vehicle?  How about the unintended consequences – as the vast majority of govt. intervention results in – of the loss of business/jobs for used car parts manufacturers, the reduction of the number of used cars on the market driving up prices for those who can’t afford a new car, the new cars that would have been purchased anyway, the energy required to build a false excess (non free market mandated) of new vehicles, or the extra miles some people might drive due to getting higher mpg?  How do those of our legislators with the current trendy entitlement saturated altruistic frame of mind explain these results?  With an “oops” – I didn’t mean for that to happen.  Oh well, on to the next social experiment.

[iv] I don’t think Bastiat would have an issue with mankind’s ongoing internal struggle with ‘evil darkness and vice’, it’s the assumption of ‘good enlightened and virtuous’ regarding our elected representatives he would take issue with. 

[v] Here’s a few of the directives California educators have mandated for their textbooks:  The nation’s Founding Fathers must be referred to as “The Framers”.  (Too paternalistic mind you.)  Images of unsafe foods – hot dogs, sodas, cake, etc. – have been banned.  Mount Rushmore can no longer be pictured because “it appears to offend” some Native Americans.  Yachts cannot be depicted in textbooks because they are seen as elitist.  Trust me, it doesn’t end here.

Frédéric Bastiat wrote a lifetime of work during the last few years of his too short life.  He’s probably most well known for “The Broken Window” chapter of  What is Seen and What Is Not Seen, an essay in which he explains and demonstrates the overlooked moral hazards that occur when economic policy is based on economic fallacy.

His other essays are worthy of attention too.  In particular today, “Property and Law“, in which Bastiat addresses the fundamental questions regarding the origin of property and law and the role of legislators (he was one) in making laws concerning property.  Regarding the origin of property and law, he reasons that “Property does not exist because there are laws, but laws exist because there is property…The function of the law, then, is to safeguard the right to property.”  He further reasons regarding the role of legislators that their “…jurisdiction is limited to guaranteeing and safeguarding property rights.”

On both of these points, Michigan legislators failed miserably this week with their vote on HB 4377, a bill that will now (with a few special interest exceptions) prohibit private businesses from allowing patrons to smoke on their property.  Especially disappointing, but not surprising, were the  Republican votes.  In the House, 20 of 43 Republicans voted for more, not less, government.  Even worse, in the Republican controlled Senate, nine Republicans enabled passage of the bill, casting their lot with the socialists of Bastiat’s day, apparently seeing their role as one to “…organize, modify, and even eliminate property if [they deem] it good to do so.”

Among the Republicans voting for Property, State Representative Justin Amash has been clear and consistent in his principled stand.  In online discussions on his Facebook page he stated that “To dismiss the [property] rights issue is to cede all power to the government, and I will never do that.”

In 1848, Bastiat could say to his countrymen that:

In a country like the United States, where the right to property is placed above the law, where the sole function of the public police force is to safeguard this natural right, each person can in full confidence dedicate his capital and his labor to production. He does not have to fear that his plans and calculations will be upset from one instant to another by the legislature.

While no longer true in Michigan or the United States, maybe that day will come again with more legislators like Amash and those who joined him in the vote for Property and Liberty.

I am not sure if this letter ever appeared in the U. of Tennessee student newspaper.  If it did, I missed it.

I am writing in response to Amien Essif’s November 9 column, “Media miss drama of demonstration”.  In it, he distinguishes the political environments of Europe from ours in the United States, and his distinction deserves further exploration.

Essif laments the quiet politics of U.S. citizens, and wishes there were frequent raucous protests.  In Europe, crowds of people partake in what he calls “real action.”  Going to work, minding your own business, and expecting the same of others is the American political tradition, but apparently these activities do not qualify as “real action.”

Then again, Americans have never walked en masse to the enlightened despot’s palace to request food, or travelled to the democratic tyrant’s outpost to request medical attention.  Even before the United States ratified a constitution to prevent those European follies, their citizens had begun a very different tradition.  That tradition began every time a group of colonists stepped off of a boat and into a vast wilderness, finding no postal roads, no gendarmerie, and certainly no royal granary.

In his journal, William Bradford, leader of the religious separatists that founded Plymouth colony, wrote that within a few months of landfall, half his company was dead.  Back in the Old World, the key to survival was “real action,” but rowdy demonstrations proved futile in the colony.  The harsh winter of Massachusetts Bay heeds neither protest nor prayer.

How did colonists survive?  They took the unreal action of providing for themselves, and in so doing began the American tradition of personal responsibility.  This tradition has endured through countless authoritarian regimes in Europe, all of which began with moral intentions for the greater good and “real action.”

Essif complains about “the uniquely American relationship to government, a strange concoction of cowardice and contempt,” and believes that “in Europe, the government is afraid of the people, while in the United States, the people are afraid of the government.”  This begs the question: what have the European governments done that makes them so fearful of their people?

The answer is that European governments have promised their citizens an end to fear, and an end to want, and their citizens believed them.  A digressive lesson for citizens and single women: if a man ever promises to bring an end to your fears and wants, you believe him at the risk that he will thereafter control you.  No government can deliver on those promises, and those that try not only exceed their true purpose (to defend natural rights) but act against it, by becoming instruments of plunder.

When government pursues its true purpose, the political environment is very calm.  Essif sees the absence of massive demonstrations as a negative; on the contrary, it is a sign that society is working well.  As Frederic Bastiat points out, “No one would have any argument with government, provided that his person was respected, his labor was free, and the fruits of his labor were protected against all unjust attack.”

Our government has stepped outside of the boundaries of its purpose, but it has not been doing this as long or as extensively as its European counterparts, and the effects are not yet as visible.  While Americans were running their own lives and expecting the same of others, their leaders in Washington–perhaps envying European governmental power–were patterning their legislation on the unwisely set examples of Europe, and then destroying the constitution accordingly.  After more than a century of this insidious legal process, the American political stage is finally set for some “real action.”

Europeans demonstrate to their governments because their governments run their lives, and in all likelihood this will soon be true for us, and then Thomas Paine’s words will apply to America for the first time since before he penned them: “The enormous expense of government has provoked men to think, by making them feel.”

Sincerely,

I’m convinced more than ever that we live in a lawless land.  The only law being that of the whims and power of those in positions of authority.

In 1850 Frédéric Bastiat wrote The Law to warn of the detrimental effects of perverting the law and using it to plunder your neighbor, that is use the law to do to your neighbor what you yourself could not legitimately do.  Although written in the context of 19th century French socialism it still applies today.  Here’s a bit of what Bastiat had to say:

It is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder.

What are the consequences of such a perversion? It would require volumes to describe them all. Thus we must content ourselves with pointing out the most striking.

In the first place, it erases from everyone’s conscience the distinction between justice and injustice.

No society can exist unless the laws are respected to a certain degree. The safest way to make laws respected is to make them respectable. When law and morality contradict each other, the citizen has the cruel alternative of either losing his moral sense or losing his respect for the law. These two evils are of equal consequence, and it would be difficult for a person to choose between them.

The nature of law is to maintain justice. This is so much the case that, in the minds of the people, law and justice are one and the same thing. There is in all of us a strong disposition to believe that anything lawful is also legitimate. This belief is so widespread that many persons have erroneously held that things are “just” because law makes them so. Thus, in order to make plunder appear just and sacred to many consciences, it is only necessary for the law to decree and sanction it.

I’m convinced of another thing too.  Our acceptance of  this idea of plunder has opened the way for the law to be used, not only against our neighbor to redistribute his wealth, but also against our neighbor and ourselves to fund the state in ever more unjust and evil ways.

This past week the Detroit News ran a three part series on the increase use of asset forfeiture laws by local jurisdictions (Part 1, Part 2, Part 3).  Apparently, these laws are becoming an effective way to replace lost tax revenue in a down economy.  Despicable on many levels, one of the worst is that officials are preying on the very people they claim to serve and protect.

The way Krista Vaughn sees it, Wayne County fined her $1,400 even though police and prosecutors admit she broke no laws.

Vaughn, who has no criminal record, was required to pay for the return of her car, which was seized by police after they mistook Vaughn’s co-worker for a prostitute. Even though prosecutors later dropped the case, Vaughn still had to pay.

Vaughn, who works in an American Red Cross supply warehouse, dropped off her co-worker, Amanda Odom, at a Detroit bank the afternoon of Feb. 11, 2004. Both women were still wearing their Red Cross badges.

Officers from the Wayne County Sheriff’s Morality Unit accused Odom of solicitation after they saw her make eye contact with passing motorists while waiting for Vaughn to pick her up from the bank. On the strength of that observation, officers ticketed Odom and seized Vaughn’s 2002 Chrysler Sebring.

“We obviously weren’t doing anything wrong, but the cops wouldn’t listen,” Vaughn said.

The charges against Odom were eventually dropped, but Vaughn still was out $900, the usual fee prosecutors require to return seized vehicles. She also had to pay another $500 in towing and storage fees, because it was several days before she could raise the money to get her car back — plus another $400 to repair an oil pan she said was damaged when her car was towed.

In the report some officials spoke against the practice.  Now a defense attorney, former Macomb County Prosecutor Carl Marlinga said, “Forfeiture laws are being abused by police and prosecutors who see only dollar signs.  It’s a money grab, pure and simple; a sneaky way of getting a penalty on something prosecutors can’t prove. It’s like shooting fish in a barrel.”   Fraser Public Safety Director George Rouhib likened it to “legalized extortion.”

Other officials were unrepentant:

“We’re trying to fight crime,” said Police Chief Mike Pachla of Roseville, where the money raised from forfeitures jumped more than tenfold, from $33,890 to $393,014.  “We would be just as aggressive even if there wasn’t any money involved.”

And another:

When Romulus saw a 118 percent jump in forfeiture revenues from 2003-07, the increase was not the result of more criminal activity, Chief Michael St. Andre said.  “It’s because our forfeiture efforts have ramped up in the past few years,” he said.

This is what happens when you criminalize immoral behavior and legalize criminal behavior.  Lord, have mercy!

Part of me laughs, and part of me cringes whenever I see these signs….because they are absolute rubbish. This sign is based on the assumption that we the public are either too lazy, or just too ignorant to think beyond what we immediatly see.

Whenever we are presented with this concept: that the government can “put people to work,” the question must be asked, “How?” 

When a non-state entity creates a job, it does so either by taking out a loan on the investment bet that the job created will produce enough value to repay or exceed the loan taken, or by reinvesting its own existing capital with a similar goal.

The State “creates jobs” or “puts people back to work” either with existing tax revenues, or by taking on debt to be funded through future tax revenues. I used quotes above because anyone with a grasp of elementary mathematics would realize that this is neither “creating jobs” nor “putting people back to work.” It is nothing more than shifting work around.

Ask yourself, what would the tax revenues taken by the state to ‘put Oregon back to work’ have been used for otherwise? What of the things the tax-payers would have invested their money in, had it not been taxed away?

The answer is: jobs.

Perhaps the tax-payer was planning on buying some new shoes (a shoe salesman’s paycheck), going out for an extra nice dinner (a restaurant worker’s wages and tip), a kitchen remodel project (construction material producers, contractors, cabinet makers, plumbers, etc) planning to add to their payroll at work to hire a new employee, or even donating money to their favorite charity. But these things will never be seen because some politician had the nice, though deceptive and false idea that they had the ability to “put Oregonians back to work.”

It is important at this point to understand that money is nothing more than a representation of labor, or work. We choose to work and earn money because money allows us to trade the value of something we are good at (in my case, web developement), for something we value that we aren’t good at, or couldn’t possibly create on our own (e.g. a ticket to football game. I neither play football, nor do I have the knowlege or ability to coach a team, let alone build a football stadium. Heck, I even suck at Madden…).

The point is that the sign above is clearly hogwash. It is based on the flawed notion that governments create things. To accept this idea, is to throw out the economic concept of opportunity cost. Government is force. The government is the only entity that we allow the power to involuntarily take our money and re-appropriate it. In this case – it is the opportunity for the tax dollars to have been spent elsewhere – that the government is forgoing so they can be assigned to this road project. If the sign was actually honest it would read: Taking a portion of your work, and directing it to someone or something else. Or perhaps simply, Making Oregonians pay for this road project.  

But telling the truth doesn’t matter to politicians because when there is a problem (such as a down economy) they must be seen as doing something to fix the problem. The perception that they are doing something to ‘put Oregon back to work’ is far more important politically than the actual truth, that they just moved work to a project that the voters will see. What the voters won’t see is all of the jobs that were sacrificed to make that particular road project possible.

It is important for me to mention that here, I am not necessarily arguing against road or other government projects. I am however calling out the hack politicians who think that tax-payers are dumb enough to fall for the ludicrous idea that government can create jobs by simply spending them into existence. From here, you can draw your own conclusion on whether the ’stimulus’ bill will actually stimulate anything, other than some politician’s delusion of grandure.

Oh, and here’s the real irony of ironies: This sign is on a road leading up to the city Amtrak station. Amtrak is in business today, and its employees have jobs, only because they are subsidized with money taken from tax-payers. I suppose a sign for that could have read: Putting Amtrak back to work – which of course actually means, Forcing you to pay for Amtrak, rather than whatever else you valued more. 

“In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause – it is seen. The others unfold in succession – they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference – the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, – at the risk of a small present evil.”

-That Which is Seen, and That Which is Not Seen -Frédéric Bastiat, 1850

Posted via email from Andrew Colclough

It’s raining dollars!  What would Frederic Bastiat have to say about this if he could speak to us from 1848?

As government regulations grow slowly, we become used to the harness – Judge Robert Bork

Frederic Bastiat

We interrupt our regular programming.  The President has just banned windows in order to benefit candle makers; candle production, he says, will stimulate the economy as long as candles aren’t melted by sunlight.  The administration also announces it will nationalize candle manufacturing, allow greedy wax suppliers only 10% of the money they are owed by the candle makers, plus grant a 30% share of Acme Candles, Inc.  to the UCMDWU (United Candle Mold Delivery Workers’ Union).   New York Times White House correspondent asks Press Secretary Robert Gibbs what most enchanted the President before he was blessed with this economic epiphany.

OK, I’ve got the facetiousness out of my system.  I wish I could take credit for this prescient concept.  I’ll admit to only my personal sarcasm in tying the philosophy of that remarkably witty proponent of freedom and liberty: Frederic Bastiat, (see link to Wikipedia entries from the pictures on the sidebar) to our current state of affairs.  Frederic Bastiat was a member of what was known as the French Liberal School in the 1840s (liberal as in the classical/original free market definition), warning of the folly of government intervention in the marketplace.  His parable of a fictitious petition by candle makers to the French government to eliminate windows in order to prevent candles from melting – thereby increasing economic prosperity by insuring the success of the candle industry (at the expense of the window industry…oops) – is a hilarious anecdote.  It also unfortunately illustrates the genesis of the president’s belief system.

Obviously above, I make reference to the bailout of GM, the perversion of the rule of law in throwing Chrysler bond holders to the wolves, and the artificial propping up of the UAW rather than normal bankruptcy pecking order.  Bastiat’s fable of altruistic but ultimately damaging marketplace intervention, is echoed consistently by the current administration’s adherence to this paradigm of unlimited spending by fiat justified by its immediate/short term effects on various and sundry interest groups.  In fact, Friedrich Hayek (see my previous two posts) said in a review of Bastiat that, according to 1930s economist John Maynard Keynes, the assumption of a multiplier effect (simply meaning a belief that the government can stimulate the economy by spending, producing a return greater than the cost of the stimulus; thereby increasing employment) on general economic prosperity would precisely mimic the argument of the candle makers!

Cash for clunkers (and maybe the upcoming Stimulus II cash for “cluckers” chicken farm bailout?) would most certainly fit neatly into these fallacies: money will do more good in the hands of the government, and it is the duty of government  to see that all get what they “deserve”.

Lastly, Frederic Bastiat’s landmark book: The Law has remarkable parallels to the economically damaging entitlement philosophies of the current congressional majority.  For example Bastiat says in the section The Results of Legal Plunder, “No society can exist unless the laws are respectable to a certain degree.  The safest ways to make laws respected is to make them respectable.”  This quote illustrates the current congress’s path towards a society in which greater than 50% of workers pay no taxes, and receive payments in the form of the Earned Income Tax Credit.  Therefore, this non-tax paying majority – the receivers of public services and governmental largess – are able to award themselves through the ballot ever increasing free goods and services from the minority: the tax payers/suppliers of public services and governmental largess.  I see no end to this increase in receivers, to include the resulting unconstructive inertia towards manufactured dependence.

So to bring my polemic to a close, I quote Bastiat one more time: “Legal plunder is identified as “… the law takes from some persons [what] belongs to them, and gives it to other persons to whom it does not belong…The person who profits from this law… will claim that the state is obligated to protect and encourage his particular industry…”

— Or nationality, ethnicity, income demographic, religion, color, blue collar, white collar, government employee, Woodstock museum, first time home buyer, union member, sexual preference, illegal immigrant, home in foreclosure, Wall St., Main St., small business, large business, self esteem damaging tatoo removers (I didn’t make this one up: see   http://www.mcclatchydc.com/226/story/63697.html), “green” energy producer, municipality, farmer, auto parts supplier, environmentalist, “too big to fail” bank and insurance companies, student, teacher, cop, mechanic, ethanol producer, the bicycle spoke hooker-uppers’ guild, donut shop owners’ amalgamated, and last but not least……….Acme Candles, Inc.

Comments on the blog con or pro most welcome.

The Ludwig von Mises Institute has re-posted a classic bit of satire by nineteenth century French economist Frederic Bastiat entitled “The Candlemakers’ Petition”. In it, domestic candlemakers call for government protection of their industry against the unfair competition of sunlight. I strongly encourage everyone to take ten minutes out of their day to read this excellent piece, if only for the closing thought:

Make your choice, but be logical; for as long as you exclude, as you do, coal, iron, corn, foreign fabrics, in proportion as their price approximates to zero, what inconsistency it would be to admit the light of the sun, the price of which is already at zero during the entire day!

Note: as I was writing this, I noticed that a modern update has been posted by D. W. MacKenzie entitled “A Petition from Producers of Everything Connected with Healthcare”. Check it out and have fun.

Since the name of this blog is taken from an essay by nineteenth-century French economist Frederic Bastiat, it seemed appropriate that I comment on this posting by the Ludwig von Mises Institute.

One of the most famous examples of the difference between good economics and bad economics is the parable of the broken window I won’t spoil it for you by explaining the broken window fallacy (I’ll let you read it for yourself), but to give an analogy, politicians are always the first to claim that military activity is good for the economy because it encourages spending and gets money flowing. After all, we’ve all heard about how World War II got us out of the Great Depression (it couldn’t have been the drastic reductions in government spending by two-thirds at the end of World War II).

In reality (and as pointed-out by Tom Woods here), military spending does not do any favors for the economy. It diverts resources away from useful production to the production of goods that will be intentionally destroyed. That spending that is stimulated by war is spending that could otherwise have been used to invest in goods actually desired by the consumer; goods that could help to improve the quality of life.

Sophism is not a word often read or heard by the eyes and ears of the twenty-first century. It is a word, however, we would do well to become more familiar with. At its root lies wisdom, but the Sophists of the fifth century BC damaged that root for all time; so that rather than relating to wisdom, it is now used to indicate a “plausible but fallacious argument”. It is this fallacious meaning that Frédéric Bastiat had in mind when he titled his collection of essays Economic Sophisms (pdf version here). And while the term in modern use can also indicate an intention to deceive, Bastiat mostly thought the best of his intellectual opponents and assumed that they were not the authors, but rather, the victims and unwitting propagators of the deceit inherent in economic fallacies.

Sophisms, praised as the “…best literary defense of free trade available…” is a collection of two different series of essays defending free trade against the economic fallacies of mid nineteenth century France. In the First Series, a collection of twenty-three essays first published together in 1845, Bastiat examines free trade from many different perspectives employing a variety of writing styles. Most of the essays are written in a conversational prose with an occasional one being satire or story. The Second Series of seventeen essays was originally published in 1848. In terms of style this series differs from the first in that over half of the essays are stories, dialogues or satire with only a few being written in prose.

On the first read, the essays in Sophisms may appear to be repetitious. Even Bastiat admits as much when he says that repetition, “…the inherent defect of this little work…” is also “…its principal utility.” There is, in fact, much repetition, but it is intentional.  Bastiat is following the advice of Jean-Baptiste Say, who was a major influence on his economic formation. In his Introduction to A Treatise on Political Economy, Say states:

To obtain a knowledge of the truth, it is not then so necessary to be acquainted with a great number of facts, as with such as are essential, and have a direct and immediate influence; and, above all, to examine them under all their aspects, to be enabled to deduce from them just conclusions, and be assured that the consequences ascribed to them do not in reality proceed from other causes. [Emphasis added]

And indeed, Bastiat does examine the facts under all aspects. In every case, whether the satirical petition to the king to have the right hand of all his subjects cut off or the passionate warning of the perversion of the meaning of words, Bastiat examines the facts of protectionist economic policies and exposes the fallacies upon which the policies are built. In each case he follows more of Say’s advice to “…discover the chain which binds them [facts] together, and always, from observation, establish the existence of the two links at their point of connexion (sic).” In his own Introduction Bastiat echoes Say with an explanation of the complexities of mounting a defense against the simple half-truths of his opponents:

… we cannot limit ourselves to the consideration of a single cause and its immediate effect. We know that this effect itself becomes in its turn a cause. In order to pass judgment on a measure, we must, then, trace it through the whole chain of its effects to its final result. In other words, we are reduced, quite frankly, to an appeal to reason.

Thus his reasons for repetition.

Free trade is the obvious theme of the Sophisms, but it’s addressed through many different fallacies. Some of the fallacies include, imports destroy the country’s wealth; high prices increase the country’s wealth; a favorable balance of trade increases wealth; general welfare is incompatible with justice and peace; economics is based on theory, not real life, and more. His most famous essay in Sophisms, “A Petition”, is a fictitious request for a law to forbid sunlight indoors. To do so would increase jobs and industry including whaling, shipping, agriculture, manufacturing and more. Not a Frenchman would miss out on the prosperity. Of course, the request is absurd, but, as in many of the essays, he uses the absurdity to point out the harm brought to consumers in order to create or protect jobs and industry.

And it is the role of the consumer that is Bastiat’s main point through and through. His mission is to show the reader the many and varied ways that the sophisms bring him harm:

In regard to the question that I have been dealing with, each sophism doubtless has its own phraseology and its particular meaning, but all have a common root: the disregard of men’s interests in their capacity as consumers. To show that this sophism is the starting point for a thousand roads to error is to teach the public to recognize it, to understand it, and to mistrust it under all circumstances.

Say what? A classical economist quoted in a Bloomberg article when explaining why Christina Romers “jobs saved or created” is completely bunk.Has the world started veering of the neo-keynesian path to once again realize that its all bullcrap?Ah, reality, you return yet again to whack the likes of Krugman and Samuelsen over the head with some…..reality-ness!

by Rick Ackerman
Posted originally September 23, 2009

OUR MEMORY STUMBLES WHENEVER we try to recall any recent sightings of “green shoots” that would support the officially promoted illusion of a U.S. economy in recovery. Actually, this vision is more of a hallucination than an illusion, since one’s mind needs to venture beyond the pale of rationality, light years beyond the fringe of statistical evidence, to conjure up supposed signs of sustainable growth.

Does “recovery” square with the reality that you, personally, see all around you? Indeed, whatever picture the government and the news media want us to see will be unconvincing at best, since a hundred million Americans are each day living the anecdotal evidence that flatly contradicts what we are being told.

How many of the 50 million homeowners who are underwater on their mortgages, for instance, jumped for joy when it was reported yesterday that home prices in the U.S. rose 0.3% in August? Optimists would say it’s the trend that matters, but realists would point out that at that rate, it will take a decade for prices merely to return to where they were before the housing market collapsed.

Someone in the Rick’s Picks forum said the news media were in cahoots with the government to sell us on the idea that America’s worst downturn since the 1930s has ended. Speaking as a former newspaper reporter and editor myself, I have a more boring theory — that journalists are simply too lazy intellectually to pursue a story line that doesn’t perfectly fit the Administration’s script. With some cursory background reading in Econ 101, they could nail Greenspan and Bernanke to the wall for their lies and sometimes startling economic ignorance. But that would be a far more difficult story to write than the ones that flow so easily from the government’s press releases and speeches. Journalists’ other big problem is that 95% of them are hard-core liberals for whom Big Government, warts and all, will always be the answer.

Bastiat’s Parable
Many of the reporters I’ve known have been very intelligent, but where economics is concerned, they seem incapable of understanding Frederic Bastiat’s so-called broken window fallacy. Bastiat’s parable, written in 1850, describes (from Wikipedia) “a shopkeeper whose window is broken by a little boy. Everyone sympathizes with the man whose window was broken, but pretty soon they start to suggest that the broken window makes work for the glazier, who will then buy bread, benefiting the baker, who will then buy shoes, benefiting the cobbler, etc. Finally, the onlookers conclude that the little boy was not guilty of vandalism; instead he was a public benefactor, creating economic benefits for everyone in town.”

And so it is for all those who continue to see Government as America’s economic benefactor, nay savior. Would someone please explain to such as the New York Times, the Wall Street Journal, and other zealous purveyors of green shoots where, exactly, the fallacy lies.

Basta verificar se a lei tira de algumas pessoas aquilo que lhes pertence e dá a outras o que nao lhes pertence. É preciso ver se a lei beneficia um cidadão em detrimento dos demais, fazendo o que aquele cidadão nao faria sem cometer crime. Deve-se, então, revogar esta lei o mais depressa possível; visto não ser ela somente uma iniqüidade, mas fonte fecunda de iniqüidade, pois provoca represálias. Se essa lei—que deve ser um caso isolado — não for revogada imediatamente, ela se difundirá, multiplicará e se tornará sistemática. Sem dúvida, aquele que se beneficia com essa lei gritará alto e forte. Invocará os direitos adquiridos. Dirá que o Estado deve proteger e encorajar sua indústria particular e alegará que é importante que o Estado o enriqueça, porque, sendo rico, gastará mais e poderá pagar maiores salários ao trabalhador pobre. Não ouça este sofista. A aceitação desses argumentos trará a espoliação legal para dentro de todo o sistema.

Frédéric Bastiat

I was having a polite conversation with someone today when they mentioned that protectionism, unlike free trade, creates jobs and prosperity by shutting off competition to domestic firms and workers. If Japan didn’t make cars, my peer argued, then jobs would spring up in Great Britain (or America) to make those cars. Quite low hanging fruit, I have to say.

I’d like to exclusively address the gains from free trade from comparative advantage. And rather than go over an economics lesson, I’ll make reference to Frederic Bastiat’s tongue-in-cheek “candlestick maker’s petition”. In it, Bastiat argues from the point of view of a candlestick maker that a competitor is “flooding the domestic market with an incredibly low price” and that eliminating this competitor will encourage growth in other industries.

The competitor he is talking about is the sun. If the government managed to block out the sun, protectionists could argue, industries will have to fill in for the resources the sun provided:

If France consumes more tallow, there will have to be more cattle and sheep, and, consequently, we shall see an increase in cleared fields, meat, wool, leather, and especially manure, the basis of all agricultural wealth.

If France consumes more oil, we shall see an expansion in the cultivation of the poppy, the olive, and rapeseed. These rich yet soil-exhausting plants will come at just the right time to enable us to put to profitable use the increased fertility that the breeding of cattle will impart to the land.

The “petition” points out, pretty well I might add, the absurdities of thinking that eliminating competition is good for the general welfare of society.

Read all of Bastiat’s Petition here.

The Holy Cause has just released the September edition of the Christian libertarian Blog Carnival.  Be sure to stroll the midway and consider the thoughts and reasoning of each contributor as issues of the day are examined from a Christian libertarian perspective.  As always, they’re excellent.

Letters to a Law Student

I have just finished reading a book entitled Letters to a Law Student, A guide to studying law at university by Nicholas J. McBride. Once I read it, I curse my luck of not been given the opportunity to encounter a book such as this during my reading years. If only I am able to do so, my personal understanding and enthusiasm to study law would be better.

The book communicates with its readers via a series of letters from an academician, who obviously comes from a legal background, to a hypothetical prospective law student, Sam. The letters discuss matters beginning from advising Sam or the readers on which course to choose, the advantages of a law degree, the prospects of a law graduates, university placements (though the placement matters are relevant to UK students only) to the more complex yet interesting issues such as the rule of law and legal reasoning and deduction.

The way the author describe the rule of law is outstanding. In just a few pages, the principles of the doctrine of rule of law, its effect and its application are succinctly discussed. This outstanding discussion of the law does not stop at rule of law but it also discusses other general overviews of the law. It poses questions against the law which some are unthinkable, novel and it has the effect to encourage readers to delve interestingly further into the subject of law.

The book also touch on the definition of law by Frederic Bastiat, which I am sure will ring our thinking bells on our understanding and acceptation of the meaning of law. That discussion is of course philosophical but aren’t law and philosophy are closely related?

Another thing that is interesting in this book is the discussion on law graduates job prospect. During my reading years the professors always say that there are three main job prospects for law graduates in Malaysia, which are private practice, the judicial and legal services (which include in house counsels), and academia. However in Letters to a Law Student, there is no mentioning of academia. I wonder why?

All in all, a must read for law students and graduates.

From Bastiat

Everybody wishes to live at the expense of the state, but they forget that the state lives at the expense of everybody.

Fitting huh?

Reminder via Cafe Hayek

“Public spending is always a substitute for private spending, and that consequently it may well support one worker in place of another, but adds nothing to the lot of the working class as a whole.”

-Frederic Bastiat, Selected Essays on Political Economy, p. 16 (emphasis in original)

Besides being a prolific writer on economics, Frédéric Bastiat was also a nineteenth century legislator in France and had experience dealing with situations similar to our own current state of affairs.  From The Law (L.216 – 220)…

The claims of these organizers of humanity raise another question which I have often asked them and which, so far as I know, they have never answered: If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind? The organizers maintain that society, when left undirected, rushes headlong to its inevitable destruction because the instincts of the people are so perverse. The legislators claim to stop this suicidal course and to give it a saner direction. Apparently, then, the legislators and the organizers have received from Heaven an intelligence and virtue that place them beyond and above mankind; if so, let them show their titles to this superiority.

They would be the shepherds over us, their sheep. Certainly such an arrangement presupposes that they are naturally superior to the rest of us. And certainly we are fully justified in demanding from the legislators and organizers proof of this natural superiority.

Please understand that I do not dispute their right to invent social combinations, to advertise them, to advocate them, and to try them upon themselves, at their own expense and risk. But I do dispute their right to impose these plans upon us by law—by force—and to compel us to pay for them with our taxes.

I do not insist that the supporters of these various social schools of thought—the Proudhonists, the Cabetists, the Fourierists, the Universitarists, and the Protectionists—renounce their various ideas. I insist only that they renounce this one idea that they have in common: They need only to give up the idea of forcing us to acquiesce to their groups and series, their socialized projects, their free-credit banks, their Graeco-Roman concept of morality, and their commercial regulations. I ask only that we be permitted to decide upon these plans for ourselves; that we not be forced to accept them, directly or indirectly, if we find them to be contrary to our best interests or repugnant to our consciences.

But these organizers desire access to the tax funds and to the power of the law in order to carry out their plans. In addition to being oppressive and unjust, this desire also implies the fatal supposition that the organizer is infallible and mankind is incompetent. But, again, if persons are incompetent to judge for themselves, then why all this talk about universal suffrage?

From a recent Wall Street Journal article, “Is ‘Friending in Your Future?’ Better Pay Your Taxes First”, we learn that tax authorities are starting to use MySpace, Facebook and other social networks to track down those who have managed to hide some of their income from authorities.  No surprise really.  What caught my attention was in the comments.  Michael Yu seems to think like Vice President Joe “we want to take money” Biden, that paying taxes is some sort of patriotic duty.  Echoing the principles found in Frédéric Bastiat’s The Law, Brian Drake counters, seeing today’s tax system for what it is – theft:

How is that [paying taxes is] any different than me and a friend mugging you on the street, and then when you protest, we take a vote among the 3 of us to determine by democratic principles whether we can rob you or not?

If it’s wrong for one person to steal from another, then it’s wrong for 2 men to steal. It’s also wrong for 10 men to steal from one. It’s also wrong for 299,999,999 men to steal from one man. Democracy doesn’t change truth. Taxation is theft and theft is wrong.

Here’s a straightforward passage from The Law (L64 – L67):

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. If such a law—which may be an isolated case—is not abolished immediately, it will spread, multiply, and develop into a system.

The person who profits from this law will complain bitterly, defending his acquired rights. He will claim that the state is obligated to protect and encourage his particular industry; that this procedure enriches the state because the protected industry is thus able to spend more and to pay higher wages to the poor workingmen.

Do not listen to this sophistry by vested interests. The acceptance of these arguments will build legal plunder into a whole system. In fact, this has already occurred. The present-day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it.

Arrrggghhh!  Where do we get these people?!

I read tonight in a local weekly paper this economic nugget about Cash for Clunkers from Candice Miller, a local Republican representative in Congress, “I think that, by anybody’s standards, this has been the best economic stimulus program that the government has enacted.”  Later on she continues, “This is going to be a critical component of how we get out of this recession, especially in Michigan.  Throughout our nation’s history, it has been auto sales that have pulled our country out of the recessions.  Talk to any economist.” [emphasis added]

The article further states without quoting that she sees another upside – a goose to the state revenues through new license and registration fees and increased sales taxes.  Now I feel better.

Perusing her Issues and Endorsements pages one sees that her policies and associations smack of modern day mercantilism and are similar to those of the socialists Bastiat warned against in The Law.

I repeat.  Arrrggghhh!  Where do we get these people?!

The Financial Times reports that Cash-for-clunkers [has] boost[ed] Japanese car sales. Is it any surprise?  With a decades long quality and image problem compared to imports, the government buyouts can do nothing but make matters worse in this regard for GM and Chrysler. The rational consumer knows exactly where to put new money.  Just one of many “unseen” consequences.

Vía una nota de Xavier Sala i Martin en su página de facebook llego a este interesante artículo. Copio y pego para mejor disfrute del mismo.

Bayona, 1839. Un gamberro lanza una piedra contra una panadería y rompe una ventana. El panadero sale enfurecido y se echa a llorar porque va a tener que pagar un nuevo cristal. Los viandantes se reúnen a su alrededor y, al principio, se solidarizan con su desgracia. De repente, uno de ellos explica que el infortunio no es tal ya que el dinero que el panadero va a gastar representará un ingreso para los cristaleros (quienes, al fin y al cabo, viven de los cristales rotos). Éstos, van a gastar ese dinero en la carnicería en beneficio de los carniceros, que a su vez van a gastarlo en el teatro en beneficio de los actores, y así sucesivamente hasta generar un enorme efecto positivo sobre la economía agregada, a través de lo que los economistas keynesianos llaman “el efecto multiplicador”. Tras concluir que la gamberrada era buena para la sociedad, los viandantes abandonaron al panadero a su suerte.

Esta historia, conocida como “la paradoja de los cristales rotos”, fue contada por primera vez por el economista francés Frédéric Bastiat en 1839 en un fantástico libro llamado Ce qu’on voit et ce qu’on ne voit pas (“Lo que se ve y lo que no se ve”). La tesis principal del libro es que muchos analistas cometen errores garrafales porque se fijan sólo en “lo que se ve” e ignoran “lo que no se ve”. En el ejemplo del cristal roto, “lo que se ve” es que el panadero va tener que gastar dinero para reparar la ventana y eso va a tener efectos positivos en las empresas que reciban el pago (los cristaleros). “Lo que no se ve” es que, el dinero que el panadero gastará en cristales, iba a ser destinado a comprar otras cosas, como por ejemplo, un traje. Al no poder comprarlo, el sastre no ingresa nada, el carnicero al que compra éste tampoco y los teatros a los iba a acudir el carnicero del sastre tampoco. Es decir, que el efecto multiplicador resultante de reparar el cristal solamente sustituye a un efecto idéntico que hubiera generado el gasto en cosas alternativas. Al no haber efectos netos positivos, lo único que queda es un cristal roto. Y eso es malo.

Les explico todo esto porque los gobiernos del mundo entero intentan reactivar la economía a través de programas “Renove” que subsidian la compra de coches nuevos a cambio de la destrucción de coches viejos. Según esos planes, el gobierno se constituye en un gran gamberro (lo digo por analogía con el chaval que lanzó la piedra contra la panadería) y destruye toda una flota de coches que todavía funcionan con el argumento de que, al tener que repararlos, se va a generar actividad económica: como en la paradoja de los cristales rotos, los fabricantes y distribuidores de automóviles tendrán ingresos adicionales, los gastarán y eso tendrá efectos positivos sobre la sociedad. También saldrán beneficiados los propietarios de coches viejos que reciban un subsidio superior al valor que su cacharro tenía en el mercado. Todo eso es “lo que se ve”. Ahora bien, “lo que no se ve” (y no se contabiliza) son las pérdidas de mecánicos y reparadores de coches, las de los vendedores de segunda mano a los que el Estado ha robado el negocio y las de los contribuyentes.

Además, está el malgasto en burócratas administradores del programa y sobre todo, lo que no se ve es el dinero que no ingresan las industrias que no van a recibir el subsidio y las que no van a obtener el dinero que los consumidores hubieran gastado si no hubieran tenido que pagar tantos impuestos. Es decir, si el estado realmente cree que destruir automóviles viejos para fabricar los nuevos es bueno para la economía, ¿no debería también destruir neveras, televisiones de plasma y videojuegos? ¿Y por qué parar ahí? ¿Por qué no derribar edificios, carreteras y puentes? ¿Por qué no demoler ciudades enteras por el bien de la sociedad? ¿Verdad que no tendría sentido? Pues tampoco lo tienen los planes “Renove”. Porque destruir maquinaria y dedicar dinero a remplazarla no genera suficientes beneficios para compensar la destrucción. La pregunta es: ¿Por qué el Estado tiene tanto interés en ayudar a la industria del automóvil con cargo a los trabajadores-contribuyentes de todos los otros sectores?

La respuesta que se nos da últimamente es (¿cómo no?): ¡hay que combatir el cambio climático! De hecho, el nuevo plan se llama “VIVE” de “Vehículo Innovador, Vehículo Ecológico”. A pesar de que el cambio climático se ha convertido en el comodín justificador de las políticas más ridículas e injustificables de planeta, citarlo no es suficiente: esas políticas también deben ser sometidas a la lógica económica. Nos dicen que los coches nuevos van a contaminar menos que los antiguos porque tienen una tecnología mucho más verde y sostenible. Eso es “lo que se ve”. Ahora bien, “lo que no se ve” (y lo que los ecologistas nunca contabilizan) es que para construir cada coche nuevo se necesita contaminar. ¿O no se emite CO2 y no se contamina cuando se produce el acero de la carrocería y el motor, la goma de los neumáticos, los plásticos de los interiores o la pintura exterior? La pregunta es: ¿la reducción de emisiones que van a tener los nuevos y eficientes coches, será superior al incremento de polución que supondrá su fabricación? Según un artículo publicado en el New York Times por Michael Gerrard, director del Centro para del Cambio Climático de Columbia, la respuesta es no. También en la sostenibilidad, pues, las autoridades parecen ignorar la paradoja de los cristales rotos, esa vieja lección que ya se explicaba en 1839, sobre lo que se ve y lo que no se ve.

==
El libro de Bastiat se puede encontrar en Espanol en Internet: http://www.hacer.org/pdf/seve.pdf

¿No lleva razón? Lo que ahora se esta viviendo no es más que hambre para mañana.