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Quotations about Liberty and Power

About this Quotation:

The French political economist Frédéric Bastiat (1801-1850) believed in a strictly limited state which would supply police and defence services but otherwise practice a policy of laissez-faire towards all other activities by its citizens. The French Army (and Navy) in 1850 comprised 400-500,000 men which he believed was bloated, unproductive of the services it was supposed to provide, expensive, dominated by aristocratic and technocratic elites, and based upon the injustice of conscription. To solve the budget crisis of his day he proposed an immediate slashing of its size by 100,000 men. To reply to the outrage of his critics, Bastiat developed his powerful notion of “the seen” and “the unseen” which has rightly become a classic in free market thinking. Here, dismissing the troops and ending the payment of their salaries by the taxpayers would cause them, their families, and the people who sold them food and clothing, considerable economic hardship. That is what is “seen” at first glance. What is not so readily apparent, what is “unseen” at first glance is that the taxpayers get to keep their property, which improves their economic circumstances, that of their families, and that of the shopkeepers and other who sell them food and clothing. Bastiat believes that there is a net economic gain for society as a whole, not to mention the question of justice.

Other quotes about Taxation:

20 August, 2012

Bastiat-fromDEP300

Bastiat on the pressing need to dismiss one quarter of the French Army immediately (1850)

Read the full quote in context here.

The French political economist Frédéric Bastiat (1801-1850) argued for the immediate dismissal of 100,000 men (one quarter) of the entire French Army as the economic crisis which followed the February Revolution of 1848 continued to make it impossible for the government to balance its budget. His argument here became one of the classic examples of “the seen” and “the unseen” in economics:

This speech (defending no cuts), we see, concludes in favor of maintaining a hundred thousand soldiers, not because of the nation’s need for the services rendered by the army, but for economic reasons. It is these considerations alone that I propose to refute.**

A hundred thousand men, costing the taxpayers a hundred million francs, live as well and provide as good a living for their suppliers as a hundred million francs will allow: that is what is seen.

But a hundred million francs, coming from the pockets of the taxpayers, ceases to provide a living for these taxpayers and their suppliers, to the extent of a hundred million francs: that is what is not seen. Calculate, figure, and tell me where there is any profit for the mass of the people.

The full passage from which this quotation was taken can be be viewed below (front page quote in bold):

A nation is in the same case as a man. When a man wishes to give himself a satisfaction, he has to see whether it is worth what it costs. For a nation, security is the greatest of blessings. If, to acquire it, a hundred thousand men must be mobilized, and a hundred million francs spent, I have nothing to say. It is an enjoyment bought at the price of a sacrifice.

Let there be no misunderstanding, then, about the point I wish to make in what I have to say on this subject.

A legislator proposes to discharge a hundred thousand men, which will relieve the taxpayers of a hundred million francs in taxes.

Suppose we confine ourselves to replying to him: “These one hundred thousand men and these one hundred million francs are indispensable to our national security. It is a sacrifice; but without this sacrifice France would be torn by internal factions or invaded from without.” I have no objection here to this argument, which may be true or false as the case may be, but which theoretically does not constitute any economic heresy. The heresy begins when the sacrifice itself is represented as an advantage, because it brings profit to someone.

Now, if I am not mistaken, no sooner will the author of the proposal have descended from the platform, than an orator will rush up and say:

“Discharge a hundred thousand men! What are you thinking of? What will become of them? What will they live on? On their earnings? But do you not know that there is unemployment everywhere? That all occupations are oversupplied? Do you wish to throw them on the market to increase the competition and to depress wage rates? Just at the moment when it is difficult to earn a meager living, is it not fortunate that the state is giving bread to a hundred thousand individuals? Consider further that the army consumes wine, clothes, and weapons, that it thus spreads business to the factories and the garrison towns, and that it is nothing less than a godsend to its innumerable suppliers. Do you not tremble at the idea of bringing this immense industrial activity to an end?”

This speech, we see, concludes in favor of maintaining a hundred thousand soldiers, not because of the nation’s need for the services rendered by the army, but for economic reasons. It is these considerations alone that I propose to refute.

A hundred thousand men, costing the taxpayers a hundred million francs, live as well and provide as good a living for their suppliers as a hundred million francs will allow: that is what is seen.

But a hundred million francs, coming from the pockets of the taxpayers, ceases to provide a living for these taxpayers and their suppliers, to the extent of a hundred million francs: that is what is not seen. Calculate, figure, and tell me where there is any profit for the mass of the people.

[More works by Frédéric Bastiat (1801 – 1850) and on 19th Century French Liberalism]