While satirical discourses can make for fun reading, they often obscure the complexity of the issue at hand and need to be taken with a heaping pile of salt. Here is a counter-analogy to the one advanced in this letter:
Imagine a world where each nation is essentially a person (this isn't strictly necessary, but the intuition to follow comes more easily when we think of our own lives, where we have a great deal more experience). Now let's say that Carla is a more efficient farmer, miner, and homebuilder than I, and that she has agreed to help me with those matters in exchange for some of my money. In a world where all people are benevolent and will provide stable help in perpetuity, this is a fine bargain; but in any other case it requires much more scrutiny. My money reserves are finite, but my need for food and resources stretches into the temporal horizon. Then I need to very carefully evaluate whether my sources of revenue are sufficient and sufficiently stable to sustain this agreement; I need to have a good backup plan if Carla can't come through for me in a time of need; and further, I need to be very assured that Carla and I won't come into later conflict in which she would be advantaged by suddenly withholding her goods and services.
This isn't to argue entirely in favor of domestic self-sufficiency; there's plenty of evidence that an interdependent web of trade correlates with greater international stability and peace, which (all else being equal) seems good. The point, however, is that the issue is really very nuanced. How sure are you that your dependence on another nation is a safe and stable dependency? What's the damage, and how quickly can you adapt, if the status quo changes? Those questions are entirely irrelevant when discussing the sun's impact on producers of light--the sun is (on our timescale) stable and has no motives. So while this bit of writing may be a good counterpoint to some minor point in the debate in which it's situated, it really seems overly reductive in the broader context of international trade.
> Imagine a world where each nation is essentially a person...
I gonna stop you right there, pardner.
The first objection to protectionist legislation is that it benefits certain people in our country (the producers of X) by hurting the interests of other people in our same country.
Because you've analogized an entire country as a single person, your analogy is by definition incapable of addressing this problem.
I can see 2 interpretations of that objection, and I'm not sure which one you mean.
I agree that protectionist legislation harms some individuals within the country enacting it.
If you're arguing that the analogy does not take the harms into account then I disagree with you - the analogy collects all benefits and harms into the same person - if Carla is a more efficient homebuilder, then not trading with her results in having a worse home (or more time being spent on it).
If you're arguing that people have a right to free trade and depriving them of that right cannot be offset by gains to others, then I think you should state this more clearly, as I'm not sure it's less controversial than the somewhat utilitarian philosophy implicit in the analogy.
No, no... The problem is more basic than that. Consider this: How should we decide on whether to implement a protectionist policy, if the producer and consumer don't agree on the relative costs vs. benefits?
Naively, just ask the producer(s) to put a price number on how much financial benefit they'll receive... And then ask the consumer(s) to assign a price number to their costs. The government compares the two numbers, and if the benefit of protection to producers is higher, our government implements the policy.
Ok, but in practice, the financial impacts of trade policy changes are really hard to quantify, especially in advance. We don't have any obvious, objective signals like public market prices, so you'd have to dig into the business models and accounts of both domestic AND foreign firms. Public filings won't provide the right data, you'll likely need access to the confidential details that underlie their public reports.
Also, you needs to assess the behavior of consumers in response to the new policy, potentially on a mass scale. You need detailed data on historical consumer behavior, plus a prediction model.
Oh, and you need to predict the future of the world economy, how major events will transpire going forward, how foreign governments/firms/consumers will counter your policy... And then model the impacts of all that on consumer/producer behavior.
... Anyway, point is: Humans don't actually have sufficient tools to evaluate the specific financial effects of trade policy changes. Our best, brightest, most well-informed analysts can make some aggregate guesses, but in the real world the analysts are right almost as often as they're wrong.
Hypothetically, IF we had a relatively reliable, accurate ability to evaluate the impacts, we could make policy that way. But we don't, so we don't. Moral arguments that rely on such a capability are just wishes for horses.
The point about cost ("My money reserves are finite...") seems to be addressed by Carla's superior productivity. To pay someone in your own country would definitionally cost more than paying someone in a more productive country (assuming identical output, ignoring shipping cost, etc). I think your analogy of 1 nation == 1 person is obscuring complexity as well. A country with a market economy couldn't simply _do_ something, they'd have to pay for it (with incentives, taxation, debt, etc.), even if they aren't trading with another country. In terms of your analogy, if you want to do your own "farming, mining, and homebuilding", then you'd have to pay "yourself" more than you'd pay Carla, or accept inferior output.
These points make me consider that what you mean by "money reserves" refers not to actual currency, but to something like trade deficit. If this is the case, can/should nations make decisions about their economies and trade policies based on projections of trade deficits?
There is a balance to be struck. You don’t want zero or infinite friction to outside trade, each has major drawbacks. You want to be able to take advantage of others’ efficiency and for others to be able to take advantage of yours. You don’t want to be trapped by change or let dependence on outsiders become a vulnerability.
One key problem is being undercut by a foreign inferior product. Food where safety isn’t taken as seriously, products of explosive labor practices, things not built to design standards. It can be hard for consumers to understand and correctly value these things and they can destroy domestic products. These things tend to not be very elastic, you can’t just notice an industry you no longer have is facing shortages and rebuild it overnight.
IMHO, there is a particular clarity of thought in Bastiat's writing that makes him superior to Anglosphere classical liberal authors, at least as far as economics is concerned.
There's a third option, at least, that the translator has not translated the nuance of the French and so [inadvertently?] simplified the writing.
My French isn't really good enough to tell, but the semi-gratuité appeared to me as if it's probably an untranslated pun.
Thankfully they link the source which says "you'll get a demi-gratuitë". My best guess is that a gratuité is a reference to schooling as it may be from a period where schooling was starting to be given for free. So it's a burn, "you'll get a half-free/be half educated". After in brackets it says something like "pardon pour le mot", but I suspect this is read in the French as "sorry for the pun" (motte-juste sp? = pun??) and the meaning in vernacular English is then [if I'm right!] definitely "shall I call you an ambulance for that burn".
As a UK-ian I enjoyed the reference to Perfidious Albion (though note the capitalisation, as it's all a name in UK we capitalise it all but that's not French practice for such a term; this is changing in UK English though).
So, yeah, great read though, either way.
(FWIW I don't think any of this catches much light on the implicit question of my first paragraph.)
As a French native, I don't see any pun in "demi-gratuité", but I may be missing some context. "you'll get a half-free/be half educated" seems like a stretch.
> As a UK-ian I enjoyed the reference to Perfidious Albion (though note the capitalisation, as it's all a name in UK we capitalise it all but that's not French practice for such a term; this is changing in UK English though).
The name is just "Albion", "perfidious" here is just an adjective like any other. We use "Grande Bretagne" for Great Britain. Notice the two capital letters.
No, Perfidious Albion is the whole name, my French teacher said such capitalisation of adjectives wasn't done in French. Country names are a special case.
It's certainly true that geonyms don't use capitals, in French: you'd say, I think, voitures français whilst we say French cars. (True?)
If I referenced the Scottish Alliance [with France] (the Auld Alliance) then it's capitalised to show it's a specific reference, not just any old alliance. Bastiat isn't [just] calling Britain perfidious he's referencing a specific term (or I guess he's ignorant and this is a massive coincidence!?).
I can't really add anything further. I'm open to being wrong.
> It's certainly true that geonyms don't use capitals, in French: you'd say, I think, voitures français whilst we say French cars. (True?)
That's how it works I think (although we would say "voitures françaises" because "une voiture" is feminine but that's a detail).
> If I referenced the Scottish Alliance [with France] (the Auld Alliance) then it's capitalised to show it's a specific reference, not just any old alliance. Bastiat isn't [just] calling Britain perfidious he's referencing a specific term (or I guess he's ignorant and this is a massive coincidence!?).
That's true, but Albion by itself is also a reference, while Alliance by itself is not. For example, we also have the "Triple Alliance", which is another alliance, but we don't have another Albion. The perfidious Albion and Albion both refer to the same thing.
I'm far from being an expert in French though, I'm only a native speaker, so I might be totally wrong about specific points like this.
In his final work (Harmonies économiques, 1850) Bastiat claims that the basis of economic liberty is economic harmony. Interesting, because this connects the philosophy of capitalism to the philosophy of Communist China (to advance a “harmonious society”). Sure, why not? Here is Bastiat:
“The conclusion of the Economists is for Liberty. But in order that this conclusion should take hold of men’s minds and hearts, it must be solidly based on this fundamental principle, that interests, left to themselves, tend to harmonious combinations, and to the progressive preponderance of the general good.”
Carey used harmony to refer to many phenomena, like how increased worker wages leads to benefits for owners. It’s lovely stuff. This systems-level beauty seems absent from contemporary economic schools of thought.
Is the philosophy of Communist China to advance a harmonious society by letting individual’s “interests, left to themselves, tend to harmonious combinations”?
Bastiat claims that liberty leads to harmony and those seeking the latter should embrace the former!
Well, it is actually the connection between Classical Chinese philosophy (Confucius & Lao Tse) and Classical Western philosophy (Pythagoras and Plato). That’s where the idea of harmony came from, for the Chinese govt and Bastiat, respectively.
I find that the CPC’s idea the of social harmony seems closer to the Western pre-determined / dialectic conception and the liberal idea closer to the emergent / diversity view of the Eastern tradition.
That would be a further fascinating twist. I’ve spent a lot of time investigating both systems; in so far as musical harmony is the core metaphor, they both seem to resolve together. But I agree that the eastern system emphasizes diversity more (at least in the classical period). Heraclitus said “out of discord comes the fairest harmony”, which is suggestive how economic competition produces economic harmony.
Wait... The word "harmonious" has been used once in two different translations to english, and so suddenly Bastiat has an ideology close to the one of communist china!?
Everything that can be reduced to a word cloud will be reduced to a word cloud.
Then, those things that can't be reduced to a word cloud will be reduced anyways, and no one will know the better, since word cloud comparisons is what they'll check.
It is not a matter of translation. This isn’t a “word cloud”:
“freedom is the most beautiful of social harmonies; fairness is the best policy.
Christianity introduced the great principle of human brotherhood into the world. It is addressed to the heart, to the feeling, to the noble instincts. Political economy comes to make cold reason accept the same principle, and, showing the linkage of effects to causes, reconciles, in a consoling agreement, the calculations of the most vigilant interest with the inspirations of the most gorgeous.”
http://bastiat.org/fr/conclusion_eo_harmonies.html
To prove this, I note that all you do is put quotes side by side that have some key words in common.
You have not managed to describe Bastiat's economic theory or compare/contrast it with any other theory's core beliefs. The passage you cite is a generic flourish that contains no economic content. So this is literally a word cloud argument with two out of context sentences in completely different economic paradigms.
I’ve given key quotes with content that reflects the main idea of his final book. You’ve made a hand wavy dismissal with no content. Feel free to actually read his book so you know what I’m talking about. Note I’m not claiming that Bastiat was a communist; rather that the aims of communism may be best served by markets. Because harmony is viewed as a common value, which should be fascinating. But I don’t need to argue if you are already decided.
These are not "key quotes". First, you don't analyze someone with key quotes but with key ideas. You explain the key ideas by supporting them with quotes. There is no essential or distinguishing idea here. And the cited quotes are rather formulaic for the genre, containing no substance, which is why you can find them in a variety of writers that share nothing in common except for subject matter. You might as well say there is a lot of commonality between the governmental structures of North Korea and England becase there are key quotes using the word "democratic" or "people".
You dismiss without offering alternatives. I am saying the key idea is harmony from liberty. I have given multiple quotes to support. It doesn’t fit your head and you dismiss. Try arguing with the ideas and offering counter arguments with evidence instead of setting up straw men.
Yes, that's true. If it's so painful and engenders so much debate to make the obvious point that Mao and Bastiat are incompatible, then why add to that pain by trying to make other, more debatable, points.
> I am saying the key idea is harmony from liberty.
I suggest that this is not a good reading of Mao or Bastiat.
For Bastiat, he was not interested in harmony but in wealth generated from private enterprise competing in the market system. For him, private ownership of capital and the right to buy/sell is a subset of "liberty", but that's very different from Mao's use of this term. Moreover Bastiat was not really interested in harmony as someone like Mao would understand it. Bastiat knew, for example, that the laws granting monopolies to everything from the making of buttons to wool to fishing protected people's jobs, and liberalizing these markets would lead to a lot of people being out of work, which would not promote social harmony, but some chaos. What it would do, is allow people to buy suits, candles, fish, for a lower price, thus improving living standards.
One of the things people don't realize is that France was prone to having famines under the medieval guild system. Liberalization of the economy put an end to all the famines. When moderns read these economic debates, they think it is like republicans versus democrats -- but there was real stuff at risk in these debates, like what is the best way to grow enough food? Bastiat insisted that getting rid of all the political stuff and just letting people grow all the food they wanted and sell it to the highest bidder would be the best way to end famines. Mao's approach was the exact opposite. He wanted only political power to decide who could grow food, how much, and who got the food.
Bastiat was targeting all the ridiculous bans that one wasn't allowed to sell a hat unless they were a member of the hat maker's guild -- that was Bastiat's target. Together with all the market bans that one could only sell in this region, and if one wanted to "export" food to a different region of France, there were so many tolls and problems that it became prohibitive. Thus one part of France could be in famine with a surplus of food in another part, and no cost effective way to get food from A to B. This is what Bastiat means by "liberty".
When you read someone like Mao or Bastiat, you have to understand the society they were in and the conversations they were having with others in that society, responding to issues current in their time. You shouldn't lift the disembodied texts, pick up a few sentences, and then start up the spin machine. Really you shouldn't read either of these without spending an appropriate time studying history and especially the intellectual history of the period in which these texts were written.
Thanks for trying. Still, You missed something key: I never said anything about Mao. I’m referring to the Harmonious Society doctrine that emerged in the early 2000s. Right at the time when China made massive market reforms.
https://en.wikipedia.org/wiki/Harmonious_Society
> For Bastiat, he was not interested in harmony but in wealth generated from private enterprise competing in the market system
You obviously haven’t read his final book.
For that matter, you should read the works of Francis Hutcheson, Adam Smith’s PhD advisor, chair of moral philosophy. Specifically his emphasis on beauty and harmony. This might give context to why Smith pursued the directions he did: both of Smith’s books were about why people make moral actions.
It’s not a matter of translation, it’s right there in the French (Harmonies économiques). He investigates why market societies tend to form into harmonious systems or organized wholes. He uses the word “harmony” extensively throughout the book and specifically in relation to the Pythagorean “harmony of the spheres”.
And, yes, with his magnum opus he does suddenly end up having principles much closer to those of Communist China. Are you offended? This quote of Bastiat might put things in perspective:
“It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.”
Markets may be the best way to serve the needs of society. But the point—even for Bastiat!—is to serve the needs of society. Is that shocking?
Coincidentally, David Ricardo's argument against England's Corn Laws a generation earlier (again dealing with import restrictions) gave birth to the economic theory of comparative advantage.
A simple example of this argument does lead to all or nothing and makes a very strong mathematical argument that anything else would be disadvantageous.
Alice can grow 20 tons of apples or 15 tons of pumpkins for Halloween.
Bob can grow 15 tons of apples or 10 tons of pumpkins.
The opportunity cost to Alice of growing 1 ton of apples is 3/4 ton of pumpkins. The opportunity cost to Alice for growing one ton of pumpkins is 4/3 tons of apples.
The opportunity cost to Bob of growing 1 ton of apples is 2/3 ton of pumpkin. For 1 ton of pumpkin it is 3/2 tons of apples.
It costs Alice more to grow apples than it costs Bob: 3/4 vs 2/3. It costs Bob more to grow pumpkins than it costs Alice: 3/2 vs 4/3.
Although Alice can grow both crops better than Bob can, it is in both their interests to have Alice specialize in pumpkins while Bob specializes in apples.
In this simple example--with no other real-life considerations--all or nothing is better for both.
https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window