“What do people say about work and economics?” they said. “What use are these painful means of increasing national wealth where one Decree suffices?”

Frédéric Bastiat
What Is Seen and What Is Not Seen

In telling the short story of Mr. Protectionist, Frédéric Bastiat reveals some of the ethical issues that are linked to protectionism, aside from showing why it is economically harmful, as he has shown elsewhere. In any case, he considers that substituting legal plunder by the government to plunder by an individual does not make it less immoral.

The quote I noted goes beyond this issue and happens to be of highly relevant in our era when Central Banks have happily committed themselves to printing money, even if they called it Quantitative Easing, and consider with envy the idea of “Modern Money Theory” which is nothing else than “Magic Money Theory”. Unfortunately, Bastiat makes a mistake when he writes that “if the decree had caused this écu to come down from the moon, these beneficial effects would not be counterbalanced by any compensating bad effects”, which is the main argument coming from the advocates of MMT. At the time, producing money was necessarily restricted by the available quantity of metal, which limited the risks of inflation. Nowadays and thanks to electronic money, central bankers can joyfully go ahead, as if money was coming down from the moon, but this reveals a misunderstanding of mechanisms that link money to the economy, i.e. the production of goods and services to the benefit of the population – the latter can be hindered by decree but it cannot be prescribed that way.

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