Student Of Liberty

XIII. – PROTECTION, OR THE THREE MUNICIPAL MAGISTRATES.

This is how monopoly, like any form of injustice, carries within itself the seed of its own punishment.

Frédéric Bastiat
Economic Sophisms Second Series

Here is an important fable in four scenes that touches several aspects of protectionism and democracy. The chosen quote shows the optimism of Bastiat because if injustice carries it own punishment, it will correct itself. However, we are warned that it can take time – in the present case, misery took over Paris within twenty years and the issue is far from being cleared.

Scenes one and two expose crony capitalism, within which cynicism on the part of a few can be at the source of regulation and restrictions imposed democratically in the name of the welfare of the people.

The third scene shows how regulation, restriction and monopoly lead to misery, notably through the end of external trade (external to Paris in this caricature but this could be replaced by foreign countries without any change to the reasoning) and competition.

The fourth scene is a warning showing that democracy in itself cannot solve all problems, while showing some silver lining as a conclusion because it is thanks to the will of individuals who make up the people that the situation will improve.

To some extent, this story reminds me The Road to Serfdom by Friedrich Hayek. In the first one, Bastiat warns us against government abuse that leads to misery while in the second one, Hayek warns us agains government abuse that destroys freedom and leads to misery.

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