Monday, March 25, 2013

Bastiat on the Socialization of Wealth

By Sheldon Richman

That … veil which is spread before the eyes of the ordinary man, which even the attentive observer does not always succeed in casting aside, prevents us from seeing the most marvelous of all social phenomena: real wealth constantly passing from the domain of private property into the communal domain.
Wealth marvelously passing from the private to the communal domain? It sounds like a socialist’s redistributionist fantasy!
But wait — Frédéric Bastiat, the great laissez-faire radical, wrote those words in his book Economic Harmonies, chapter 8, provocatively titled “Private Property and Common Wealth.”
He repeats the point throughout his fascinating chapter:
And so, as I have already said many times and shall doubtless say many times more (for it is the greatest, the most admirable, and perhaps the most misunderstood of all the social harmonies, since it encompasses all the others), it is characteristic of progress (and, indeed, this is what we mean by progress) to transform onerous utility into gratuitous utility; to decrease value without decreasing utility; and to enable all men, for fewer pains or at smaller cost, to obtain the same satisfactions. Thus, the total number of things owned in common is constantly increased; and their enjoyment, distributed more uniformly to all, gradually eliminates inequalities resulting from differences in the amount of property owned.
Here’s what Bastiat has in mind. In a competitive marketplace with advancing technology, as the effort required to produce and, hence, acquire things diminishes, the price of gaining utility falls. For example, if the average worker had to work two hours, 40 minutes, to buy a chicken in 1900, but only 14 minutes as the 21st century approached (actual statistics), Bastiat would say the chicken “is obtained for less expenditure of human effort; less service is performed as it passes from hand to hand; it has less value; in a word, it has become gratis, [though] not completely.” In other words, most of the utility that had to be paid for with painful effort in 1900 was free by 2000. (By “less value,” Bastiat meant that the market price has fallen, not that the chicken is less useful.)


  1. The rest of the article is linked to Gmail.

  2. The "read the rest" link opens my Gmail inbox.

  3. socialists always say property distribition is best when it is owned by the common people, instead of an elite few in the capitalist class or property that is owned privately for profit, what they dont understand is that the common people are already determining how it is distributed by bidding on it. if the people didnt determine what they wanted, how much if it they wanted, and for what price they wanted it, then there would be no realist way to determine scarcity and value.

    the whole of society already determines production and what to do with resources in a free market society far better than in a socialist society. so, to say that only an elite few in the capitalist class determine what to do with capital and resources and everyone else is just their wageslaves is nonsense and infact opposite from the truth.

    socialism is for stupid people.

  4. Excellent. Now let's apply this logic to roads, police services, and the defense industry.

  5. > "In a competitive marketplace with advancing technology..."

    Conversely, advancing technology also helps to create a competitive marketplace. The rise of the internet and all of its combined protocols, widgets, applications, etc. in the past 20 years has created a very competitive marketplace that will leave those uneducated about this new marketplace and its tools in the dust. I'm looking at you, Bernanke, Krugman, ECB, et. al.

    Think dinosaurs and small, rapidly moving mammals.