If you follow my posts, you probably know that I like economics. I my travels I had heard about a French writer, Claude Frederic Bastiat who cleverly exposes economic sophisms. I had thought that sophisms were similar to myths, but a sophism actually is meant to deceive. I have come to believe that most of the economic drivel that we are fed is meant to fool us while allowing those in power to tinker with our future.
Tinkering is bad.
Economic Sophisms was published in the 1840s and subsequently translated. The translator retained much of the flavor of the language of the period, thus it is difficult to read at times. I found that the book was one where I had to be in a quiet place to read. That is probably true of most economic books that I have read. Once into the book, it is clear that Bastiat was a master toying with the perpetrators of sophisms. He often used their very own arguments against him.
Early in the book, Bastiat outlines the biggest problem with battling economic lies;
“We must confess that our adversaries have a marked advantage over us in the discussion. In very few words they can announce a half-truth; and in order to demonstrate that it is incomplete, we are obliged to have recourse to long and dry dissertations. This arises from the nature of things. Protection concentrates on one point the good which it produces, while the evils which it inflicts are spread over the masses. The one is visible to the naked eye; the other only to the eye of the mind.”
I think the best way to summarize the book and how to expose sophisms is by virtue of a bullet list that can be used. They are in no particular order of importance, but are some that I highlighted while reading:
- One way to expose a sophism is to submit them to the test of exaggeration. A good example of this was a conversation that I had with my father-in-law about minimum wage. He believed that a federally mandated minimum or living wage was necessary. I argued the extreme that he was correct, but the mandates were insufficient and should actually be $25.00 per hour; a true living wage.
- “Consumption is the end and final cause of all the economic phenomena, and it is in consumption consequently that we must expect to find their ultimate and definitive solution.” When someone advocates a new economic policy, follow the path of the policy to see how it affects the cost to the consumer. If it is causes an increase in your costs, your ability to purchase goods is reduced and you are harmed…your wealth has diminished. This is a very simple test.
- Look beyond the immediate result claimed in any economic policy. “What misleads…is that they judge of them by their immediate and transitory effects, instead of following them out to their general and definitive consequences.” That is the difficultly in arguing against sophisms; you have to get people to think beyond the initial results.
It doesn’t take much to find examples in our everyday lives. As I was finishing this book, I read an article about American catfish farmers fighting the importation of Vietnamese imports. In the “catfish wars” the farmers are using every sophism to block the import of less expensive Vietnamese catfish. The Americans have called for tariffs, a complex labeling law, and even winning a fight to prevent the Vietnamese fish from being called catfish.
As you read the article, keep in mind the second principle bullet. Does the action to benefit the few (American catfish farmers) cost the many (consumers) more? Think of how many ways that you can substitute “catfish” for other protected industries…Steel, toys, automobiles, shoes, grapes, etc.
I will end with a few of my favorite passages:
“Our ignorance is the raw material of every extortion from which we suffer, and we may be certain beforehand, that every sophism is the precursor of an act of plunder.” [emphasis added]
“Thus, we arrive at the result to which all economic sophisms, numerous as they are, conduct us, namely, confounding the means with the end, and developing the one at the expense of the other. [emphasis added]
“Men have an immoderate love of enjoyment, of influence, of consideration, of power – in a word, of wealth. At the same time, they are urged on by a strong, an overpowering, inclination to procure the things they so much desire, at the expense of other people. But these other people – in plain language, the public – have an equally strong desire to keep what they have got, if they can, and if they know it.”
“We should not be paying nearly two milliards [a great deal of money] of taxes, if we did not empower those who live upon them to vote them.”