Bastiat’s Brilliant Case for Free Trade

Bastiat had a singular ability to state the case for free trade clearly and convincingly. ...

French philosopher and writer Frédéric Bastiat was born on this day, 30 June, in 1801, 220 years ago. In my opinion, he was one of the most brilliant spokesmen for free trade ever. He certainly deserves a short notice from me on his birthday. Many would agree that Bastiat’s most effective piece in support of free trade is the satirical ‘Petition of the Candlemakers’. Written in 1846, it is supposed to be directed to members of the French Chamber of Deputies by manufacturers of tallow candles, wax candles, lamps, candlesticks, street lamps, snuffers, extinguishers, and producers of tallow, oil, resin, alcohol, and in general of everything relating to lighting. These manufacturers tell the deputies that there is a wonderful opportunity to keep the domestic market for domestic labour only:

We are suffering from the intolerable competition of a foreign rival whose situation with regard to the production of light, it appears, is so far superior to ours that it is flooding our national market at a price that is astonishingly low for, as soon as he comes on the scene, our sales cease, all consumers go to him, and a sector of French industry whose ramifications are countless is suddenly afflicted with total stagnation. This rival, which is none other than the sun, is waging such a bitter war against us that we suspect that it is instigated by perfidious Albion (good diplomacy in the current climate!), especially as it treats this proud island in a way which it denies us.

The petitioners point out that the legislators, by forbidding access to natural light, such as closing doors and windows during the day, would create a need for artificial light. Thus, if more tallow would be consumed, many more cattle and sheep would be needed, and this in turn would lead to an increase in artificial meadows, meat, wool, leather, and fertilisers. Again, if more oil and resin would be consumed, many more poppies and olive trees would be cultivated, and thousands of ships would go to catch whales. The petitioners add that even if consumers may have an interest in the admission of natural light, producers have one in its prohibition.

Bastiat’s piece is a clever restatement of Adam Smith’s argument for the division of labour and free trade. The premise is that countries as well as individuals may have special natural advantages. New Zealand is well suited for sheep rearing, Chile for wine growing, Iceland for fishing, the Canary Islands for tourism. Bastiat himself takes a simple, but highly relevant, example: ‘If an orange from Lisbon is sold at half the price of an orange from Paris, it is because natural and consequently free heat gives to one what the other owes to artificial and consequently expensive heat.’ Therefore, in Paris an orange from Lisbon can be said to be half-free. But this is used by French orange producers as an argument to exclude it. It is claimed that domestic labour cannot withstand the competition. It has to do everything and Portuguese labour only half the task, with the sun accomplishing the rest. But if a product is excluded for being half-free, what about a product that is totally free, such as sunlight? It should be rejected with twice as much zeal, Bastiat ironically exclaims on behalf of the sun’s competitors in the production of light. He follows the argument of the petitioners to its absurd ultimate conclusion. His serious point is that when a product, wool from New Zealand, Chilean wine, fish from Iceland or sunshine in the Canary Islands, can be acquired with less effort than if we made it ourselves, then the difference in effort, and hence in price, is a gift bestowed on us. It is our loss if we refuse to avail ourselves of the various advantages nature has given to different territories and different individuals and which are offered to us through free trade.

This same point is vividly brought out in another parable in which Bastiat uses the familiar figure of Robinson Crusoe on the desert island, from Daniel Defoe’s novel. He recalls Crusoe’s comment in the novel that if he wants a board, he has no other way but to cut down a tree, set it on an edge before him, and hew it flat on either side with his axe. Bastiat observes that it takes Crusoe two weeks to make a plank, and meanwhile he has to live on his provisions, while his axe becomes blunt. Then Bastiat adds his own variant of the story. Just when Crusoe is about to give the first stroke of his axe, he sees a plank cast up by the waves on the beach. He runs to pick it up, but then he suddenly remembers the protectionist argument and stops. If he picks up the plank, it would only cost him the effort of carrying it and the time to run down the cliff and climb it again. But if he makes a plank with his axe, he would give himself enough work for two weeks, while he would wear out his axe which would give him the opportunity of repairing it, and he would also eat up his provisions and have to obtain fresh ones. Therefore the right thing for Crusoe to do is to push this plank back into the sea: thus he can create more work for himself, and ‘work is wealth’, as protectionists claim. Bastiat agrees, of course, that this line of reasoning is absurd: ‘It is nevertheless the one followed by any nation that protects itself through prohibition. It rejects the plank offered to it for little work in order to give itself more work.’ Bastiat also points out that in the two weeks Crusoe would save by picking up the plank instead of making a new one from the tree, he could do something else.

Since Bastiat has a singular ability to state his argument for free trade clearly, all this may seem elementary and obvious. Nonetheless, protectionism has prevailed in many places and many times, supported by the logical fallacies exposed by Bastiat. University students today would do well, I think, by reading Bastiat. It would probably inoculate them as effectively against protectionism as AstraZeneca and other vaccines are now inoculating us against the corona virus.