Bastiat Was Right

Michael Koller
Mon, 1 Oct 2001 23:25:56 -0400

April 13, 2001

Bastiat Was Right
by Llewellyn H. Rockwell, Jr.

Frederic Bastiat was a French economist, a passionate and articulate
believer in free enterprise, who lived from 1801 to 1850. But his writings
speak to us today, and help explain why the recent conflict with China has
ended through diplomacy and peace rather than belligerence and war.

The answer can be summed up in one word: commerce. Glorious, peaceful,
prosperity-making, peace-preserving commerce. It was the overwhelming fact
that the health of our economies are linked that made the Chinese and U.S.
governments realize that both sides have more to gain from good relations
than hatred and war.

It was Bastiat who observed the trade-off between trade and war. When goods
don't cross borders, he said, armies will. Without trade, there is less to
lose from the mass destruction that war implies. Countries that trade have a
mutual stake in the preservation of open, friendly relations. This is one
reason that free commercial activities promote peace, and why protectionism
and trade sanctions generate war tensions.

History shows that war is good for government. In wartime, government gains
massive power over society. It is granted a degree of latitude in its use of
emergency powers that would not otherwise be permitted. War allows
politicians and bureaucrats with a passion for power to use it to the hilt,
through taxation, inflation and regimentation. War destroys things and then
permits governments to profit from rebuilding them. It drains the private
sector of capital and entrepreneurial energy and enriches the parasitical
institutions of the State. No free society stays free after war begins.

The mystery isn't why war exists but rather why, given the nature of
government, it isn't the norm. Bastiat explained that free trade helps quell
government's passion for war. It creates powerful lobbying groups on all
sides that demand the preservation of peace and the triumph of diplomacy
over hostility. International trade networks create intermediating
structures of business relations that work as a barrier to bombs and

This observation was further elaborated on by Ludwig von Mises, who
responded to the Marxist-Leninist theory that capitalism leads to war. Lenin
saw war as the internationalization of the intractable conflict between
capital and labor. On the contrary, Mises said, the basis of capitalism is
trade and mutual cooperation to the benefit of everyone. Capitalism creates
networks of commerce  including capital markets and wide circles of labor
and entrepreneurial specialization  that become dependent on each other.

The socialists of today understand this, which is why, since the end of the
Cold War, so many of them have joined the war party. They too recognize that
freedom, trade and peace go together, so they've decided to oppose all
three. Only last year, for example, the website of the World Socialists
complained that "The pledge to restart the talks [with China] came after a
barrage of lobbying pressure by U.S. companies alarmed over the prospect of
losing the billions of dollars in trade and investment opportunities. ..."

Indeed, commercial ties are the very basis of international friendship,
particularly that which thrives between the U.S. and China. Each year, China
exports $200 billion in goods to the world, and imports $170 billion, for a
total dollar value of commercial world traffic in and out of China of nearly
half a trillion.

China's top trade partner is Japan but next in line is the U.S. Each year,
China exports to the U.S. $81 billion in electrical machinery and equipment,
apparel, shoes, toys, games, iron and steel, furniture, leather goods and a
million other things, while importing $13 billion in machinery, fuel,
medical equipment, paper products, aircraft and a million other things.

Our lives  by which I mean the lives of regular people in the U.S. and in
China  are made immeasurably better because of the freedom to trade. Our
networks of exchange build private-sector prosperity in both countries. Was
the "corporate lobby" influential in preventing the tensions over the U.S.
spy plane from degenerating into outright conflict? Very possibly, even
likely  a fact which we should celebrate, not condemn.

So entrenched are U.S.-China business ties that the warmongers among us have
to think creatively to come up with excuses for protectionism and hostility.
Lately they have been fulminating about human rights in trade, the supposed
existence of forced and child-based labor, the claim that China is spying on
the U.S., and the trade deficit. They say that all these things raise good
reasons to curb or cut off commercial relations.

The crucial question to ask about all these complaints is: Will less trade
make matters better or worse?

The typical political dissident in China wants more contact with the outside
world, more economic opportunity that trade brings. Commerce opens up
societies and gives the powerless greater opportunities to have control over
their destinies. Besides, if it were possible to use embargoes and sanctions
to shape up foreign countries, Cuba and North Korea would have become
paradises of human rights long ago.

Bastiat had a radical goal. In addition to the protection of private
property, he wanted the "the abolition of war, or rather (what amounts to
the same thing), the fostering of the spirit of peace in public opinion,
which decides the question of war or peace. War is always the greatest of
the upheavals that a people can suffer in its industry, the conduct of its
business, the investment of its capital, and even its tastes."

In the recent conflict with China, some Americans (even, I'm sorry to say,
many American conservatives) tasted blood. But they didn't get their way,
Deo Gratias.

With free trade between the U.S. and China, the opportunities for our
governments to go to war are greatly reduced.

It is because peace and freedom go together, and mutually reinforce each
other, that we need ever-more trade and commercial relations with all
countries everywhere, with no exceptions, ever. May private enterprise
continue to save the world from destruction by governments.

Llewellyn H. Rockwell, Jr., is president of the Ludwig von Mises Institute
in Auburn, Alabama. He also edits a daily news site,

Copyright  2001