[Private services] are always characterized by the presumption of genuine utility, accurately measured by their comparative value.

Frédéric Bastiat
What Is Seen and What Is Not Seen

The sixth pamphlet of the series “What Is Seen and What Is Not Seen” is of major importance for the understanding of the role of prices in a market economy. Frédéric Bastiat highlights the difference between private services coordinated by prices and public services coordinated by a political process. He also shows that substituting a public service for a private service does not magically cause the costs to disappear and that “When a stomach that is hungry is in Paris and the wheat that is able to satisfy it is in Odessa, suffering will cease only when the wheat is brought to the stomach.” Here are the seeds of the superb arguments exposed by Friedrich von Hayek 120 years later in his lecture for the Nobel Prize.

Another interesting point concerning price coordination is the assertion that a free market is promoting association in society through the following quote that reminds some other: “In order for a man, when he gets out of bed, to be able to put on a suit of clothes, a piece of land has to have been fenced, cleared, drained, ploughed, and sown with a specific type of plant. Flocks have to have grazed there and given their wool, this wool has to have been spun, woven, dyed, and made into cloth, and this cloth has to have been cut, sewn, and made into a garment. And this series of operations implies a host of others, for it requires the use of farming machinery, sheepfolds, factories, coal, machines, vehicles, etc.

The geeks will have recognised the theme of the “woollen coat” described 80 years earlier by Adam Smith in his An Inquiriy into the Nature and Causes of the Wealth of Nations (book 1, chapter 1) or the theme of the pencil revealed 110 years later by Leonard Read before it was exposed in a didactical way by Milton Friedman and made available on YouTube.

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