In 1840, the Chamber of Deputies passed a law increasing import taxes to protect French industry. This is the famous economic patriotism, which we still encounter today.
above: Marine Le Pen, a French politician
Bastiat then composed a satirical text that later became one of his most famous works: "The Petition of the Candlemakers." It illustrates how certain well-organized pressure groups of producers obtain undue privileges from the state, to the detriment of the citizens. At the same time, it demonstrates the absurd and destructive nature of protectionist legislation.
PROTECT OUR CANDLES!
In this petition, the candle makers ask the deputies for legal protection against a dangerous rival:
We suffer from the intolerable competition of a foreign rival who, it seems, is in such superior conditions for producing light that he floods our national market at a fabulously reduced price.
So, who is this unfair foreign competitor? It is none other than the sun. The producers then highlight the opportunity there would be in reserving "the national market for national labor", by ordering through a law to close "all windows, skylights, shades, shutters, blinds, curtains, fanlights, in a word all openings, holes, slits, and cracks through which the sunlight is accustomed to enter houses".
In other words, the candle makers attempt to demonstrate the harmful effects of a "foreign competitor" (the sun) on France's economy. Because not only can the sun provide the same "product" as candles, but it does so for free. Two hundred years later, this story remains incredibly relevant. Consider the taxi drivers who ask for the law to ban VTCs and Uber. Think of the bookstores that want to ban Amazon.
Bastiat's real adversary in this fiction is political and electoral protectionism, one that relies solely on the greed of producers and the naivety of consumers. He unveils the collusion between the bad capitalists of the time and the State. Instead of innovating and adapting to the market, the bad capitalist is the one who seeks to gain a political advantage through protectionism. This always results in spoliation for the consumer, that is, an injustice.
In short, protectionism is a deliberate policy that favors producers over consumers. However, according to Bastiat, the true representatives of the general interest are the consumers, because we are all consumers.
Protectionism is also based on a hidden syllogism that turns out to be a fallacy:
- The more we work, the richer we are;
- The more difficulties we have to overcome, the more we work;
- Therefore, the more difficulties we have to overcome, the richer we are.
Let's illustrate this absurdity with a few short stories told by Bastiat. In Chapter III of the second series of Economic Sophisms, he envisions a carpenter writing to the minister a petition requesting protectionist legislation. The carpenter thus formulates his request: Mr. Minister, make a law that stipulates that "No one will be able to use anything but beams and joists produced from blunt axes." In other words, make a law that prohibits the use of sharp axes in France. Thus, where one normally gives 100 axe blows, it will be necessary to give 300. Carpenters will be in high demand and therefore better paid.
In Chapter XVI, there is another ironic text, titled "The Right Hand and the Left Hand." Following an investigation, a royal envoy drafts a report in which he proposes to the king that all the workers' hands be cut off, or at the very least, tied up. Thus, he continues, work and consequently wealth will increase. Production will become significantly more challenging, necessitating the hiring of additional labor and an increase in wages. Pauperism will disappear from the country.
Following this logic of creating jobs at all costs, why not also replace trucks with wheelbarrows and shovels with teaspoons? All these sophisms have one thing in common: they confuse the means with the end. For Bastiat, the goal of the economy is not the preservation of jobs, but rather the preservation of wealth. We should not judge the utility of work by its duration and intensity, but by its results: the satisfaction of needs and utility.
This confusion of means and ends is found in the slogan "money is wealth."
This is the axiom that governs the monetary policy of most states. Indeed, the artificial increase in the quantity of money allows banks to lend money to individuals and states to easily repay their debt; this is "what we see". But "what we do not see" is that this creation of money, not based on any real wealth creation, will lead to inflation and the ruin of savers.
True wealth, according to Bastiat, is therefore the set of useful things that we produce through work to satisfy our needs. Money is thus only a commonly used means of exchange; it serves only as an intermediary.
Quiz
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eco2034.2
Who is considered the unfair competitor of candle makers in this story?