Posts tagged with: Economics in One Lesson

“It’s all in Plato, all in Plato: bless me,
what do they teach them at these schools!”
– Digory Kirke in C.S. Lewis’s The Last Battle

The way Professor Kirk feels about Plato is how I feel about Frederick Bastiat. Whenever I hear someone repeating an economic fallacy online I have a tendency to cry out, “It’s all in Bastiat, all in Bastiat: bless me, what do they teach them at these schools!”

Unfortunately, Bastiat, whose 215th birthday is today, is not often taught in schools, whether in high school or college. That’s a shame for he was one of the greatest political and economic thinkers of the 19th century. Bastiat, a farmer turned politician and pamphleteer, had a inimitable gift for explaining economic and political concepts in way that make them not only understandable but seem downright commonsensical.

Bastiat, as Charles Kaupke notes, drew on his Catholic faith and the writings of Adam Smith and John Locke to articulate a vision of limited, efficient government that respects each citizen’s God-given dignity. And as Religion and Liberty adds,

He typified that rare breed of liberal who holds a deep and powerful belief in a personal and transcendent God, and who incorporates this belief in a wide ranging social philosophy centering on the proposition that when left alone society will most clearly display the wisdom and intent of the Creator.

A particular concept of Bastiat’s that has profoundly influenced my thinking is the idea that God arranged the social world. “I believe that He Who arranged the material world,” wrote Bastiat, “was not to remain foreign to the arrangements of the social world.” I wholeheartedly agree. That is why I never tire of arguing about how God created such economic phenomena as the price system and comparative advantage in order to coordinate human flourishing.

There are dozens of ideas in his writings like this one that are worthy of close attention, but here are four particularly important concepts of Bastiat’s that you should know:
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On Tuesday, Acton welcomed economist and author Robert P. Murphy to the Acton Building’s Mark Murray Auditorium as part of the 2014 Acton Lecture Series. He spoke on the topic of The Importance of Sound Money, providing a solid lesson in the history of currency in the United States and other major countries, and an overview of the problems that have resulted from our government’s abandonment of sound monetary policy.

Murphy’s presentation is available for viewing below.

Though Hurricane/Tropical Storm Irene was not as devastating as expected, it took several dozen lives and has cause billions of dollars of damage. Some economists have tried to argue that the storm is a net gain for the economy—think of all the jobs that will be created by the clean-up and rebuilding! But treatment of the storm by the mainstream media has been surprisingly honest and nonpartisan, and their unguarded coverage is instructive.

ABC News reports that economic losses due to slowed commerce over the next week to ten days could be as much as $20 billion, which is more than the direct damage done by the storm. (Amusing twist: one of the economists cited in the ABC story is the guy claiming the new trees and roofs needed along the eastern seaboard constitute an “economic renewal,” although ABC seems to have decided to spare him the mockery by excluding that nonsense from its story.)

The media’s frank admission that a hurricane-forced suspension of business cannot be declared economic growth invites comparison with what is said when, for example, a snowflake falls on Hilda Solis’s eyelash as she walks into work and the Department of Labor is sent home at noon. Why does no one talk about the economic losses then? Where are the stories of systematic collapse? When the Department of Labor is not on the job! Oh, wait…

Men and women—their ideas and their hard work—are the only producers of wealth, but an economics that isn’t correctly based on human nature can pretend otherwise. As Henry Hazlitt, author of Economics in One Lesson, said,

No man burns down his own house on the theory that the need to rebuild it will stimulate his energies.

Deep down, even the Washington press corps knows that natural disasters don’t create jobs, and regulation doesn’t drive growth. It takes an Act of God to get it out of them though.