Bonus Quotation of the Day…

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… is from page 351 of Liberty Fund’s 2017 expanded English-language edition, brilliantly edited by David Hart, of Frédéric Bastiat’s indispensable work Economic Sophisms and “What Is Seen and What Is Not Seen”; specifically, it’s from Bastiat’s previously unpublished 1847 essay “A Little Manual for Consumers; In Other Words, for Everyone” (“Le Petit manuel du consommateur ou de tout le monde”) (original emphasis):

Consume – Consumer – Consumption; these are ugly words that represent people as so many barflies, constantly with a coffee cup or a wine glass in front of them.

But political economy is obliged to use them. (I am referring to the three words, not the wine glass.) It does not dare to invent others, as it has found these ready-made.

Let us nevertheless set out what they mean. The aim of work, both cerebral and manual, is to satisfy one of our needs or desires. There are therefore two terms in economic evolution: effort and reward. Reward is the product of effort. It takes effort to produce; enjoying the reward is to consume.

DBx: Not a week passes that I don’t encounter at least one person criticizing market-oriented economists (or libertarians, or “market fundamentalists,” or “neoliberals”) for naively supposing that human beings are motivated exclusively, or at least overwhelmingly, by base material desires. “Oh, you free-market economists stupidly suppose that real people are gluttonous consumption machines. You don’t understand that real people value, in addition to goods and services for consumption, many ‘non-economic’ things and experiences, such as family, community, and a sense of purpose.”

Ugh. This accusation is simply incorrect.

Those who oppose free markets must discredit arguments offered in support of free markets. And one convenient and cheap source of discredit is to accuse supporters of free markets of believing that the typical person is or ought to be narrowly materialistic, or even money-grubbing. Because every reasonable person understands that only sociopaths are single-mindedly greedy – that only Hollywood cartoon villains care exclusively about maximizing the quantities of consumer goods or currencies in their grasps – if proponents of free markets are portrayed as believing either that the typical person is a sociopath or should be one, this portrayal enables opponents of free markets easily to dismiss the case for free markets, being – as that case is thought to be – rooted in lunacy. No need to engage any further or more deeply the case for free markets; just behold the “market fundamentalists’” laughably unrealistic belief that real-world people care only about stuffing their houses – preferably McMansions – with as many frivolous consumption goods as possible.

So frustrating.

The word “consumption” (and its variants), as used by economists, means nothing more than “ends.” Every human action is aimed at using means to achieve some end or ends. And “ends” is what – and all that – economists mean by “consumption.” The economic way of thinking is as applicable to understanding the pursuit and provision of job security and unchanging communities as it is to the pursuit and provision of patio furniture and Tahitian vacations.

But by accusing market-oriented economists of having something to say only about the pursuit and provision of the likes of patio furniture and Tahitian vacations, opponents of free markets attempt to shield their proposed interventions from the criticisms of economists. Yet because job security and unchanging communities are indeed valued but also are, no less than are patio furniture and Tahitian vacations, scarce, economics speaks important truths about the pursuit and provision of the likes of job security and unchanging communities.

And among the truths spoken is this: If government forces Smith to pay for all or even part of Jones’s increased job security or community stability, government forces Smith to forego some ends that Smith values no less – and likely more – than Jones values his increased job security or community stability. I write “and likely more” because if Jones really valued, say, his increased job security by more than Smith values what she is forced to sacrifice to enable Jones to enjoy increased job security, Jones would himself voluntarily pay the cost of this increased job security (say, by offering to work at a lower wage). The fact that government forces Smith to give up pursuit of some of her ends in order to enable Jones to better pursue some of his ends – that is, the fact that government arranges for Jones to free-ride on Smith – at best gives us no reason to believe that the additional benefits enjoyed by Jones are as high as are the additional burdens suffered by Smith.

Market-oriented economists reasonably ask: What’s the justification for enabling Jones to achieve more of his ends at the expense of forcing Smith to achieve fewer of her ends? Why is Jones more important than Smith? The ethical obligation to answer these questions cannot legitimately be escaped by the cheap tactic of proclaiming that the economic way of thinking that generates these questions is inapplicable to Jones’s desires.

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