Frederic Bastiat[1] was brought to my attention by an american libertarian acquaintance; in his little book, written in the 19th century, he
spends a great deal of words to simply say that the private initiative is
better than the government. He writes nice little stories that will be easily
and convincingly understood by the simplest reader thanks to the easy words and
the fun prose.
Bastiat repeats until the
nausea a catchy marketing slogan to show that his reasoning exposes “what cannot be seen” of the socialist
policies and to show that “what cannot be
seen” is the part that damages society. Unfortunately he is just tautological[2] as
his conclusions are based on the assumption that what he wants to conclude is
right: “private initiative is better than
government”.
In fact if we carefully
distinguish between the theory and the practice of the matter to fully show “what cannot be seen”, the most he can
actually prove in theory is that, for a given infrastructure, if money is
properly spent, government expenditure does not create additional jobs as
compared to building the same infrastructure by a private institution. So both
approaches can be equivalent in theory as long as we do not enter in the
discussion of the practice which is affected by all sorts of imperfections.
History has shown in
practice that governments have a certain tendency to be corrupt and
inefficient, and those inefficiencies are what Bastiat thinks “cannot be seen” in the socialist
arguments, but this depends on many variables and there are plenty of
governments world-wide that makes a pride point of being not corrupt and very
efficient.
History has also shown in
practice that private enterprises have a certain tendency to exploit people and
environments, to aggregate in monopolistic enormous monolithic shapes to
manipulate the market at their pleasure and this is what “cannot be seen” in the capitalist and liberal arguments and that
also short-sighted and biased Bastiat fails to see and to show us in his little
stories.
So which one of the two, the
private or the government, is the most efficient builder of infrastructures
remains to be assessed case by case based on the laws of the country, the
attitude of the people, the surrounding conditions, the resources of the
country, his history and culture and how big and capable of manipulations are
his enemies. A general rule cannot be derived by simply taking as example one
or the other country.
But the rule appears
magically depending on the judgment criteria we desire to create: if the criterion
is the individual profit, then obviously the private initiative is preferable to
the government one. If the criterion is the creation of infrastructures for the benefit of the largest possible group of people we can logically see that individual profit is the
wrong motivation and so the government should take the initiative.
Obviously it needs to be
repeated, the government that is superior to the private enterprise is a non-corrupt
and efficient government which is possible and already existing in certain
countries; so there is no reason to avoid it “a priori” except if we want arbitrarily to favour the profit of
private individuals. So, ultimately it all goes to what motivates people to do well.
Bastiat, in favour of private freedom
argues that competition provides the
control loop that pushes individuals to do what is good and profit is the reward in the loop but
this does not avoid that private accumulation of capital is misused and creates
aberrations as the rich-poor growing gap, the resources waste of the developed
countries and the short term benefit and long term non-reversible exploitation
of environment which are all “maximizers”
of individual and private profit.
A more evolved individual, properly educated and fully free of being himself without the fear of competition, will
know that for the common good and sustainable environment he cannot work for
his own profit and he should get his full reward from being able of being
himself in harmony with the rest of the society; then whether he works as a
private entrepreneur or as a government officer does not make any difference
because he will do what is good for the society. But of course this requires free
education for all, and an education that shows all the drawbacks of private individual
profit. And finally it requires government rules to safeguard society against
who profits from it.
