Do this for me and I will do that for you. This is very trivial and common but is nonetheless the beginning, the middle, and the end of political economy.

Frédéric Bastiat
Second Letter

In this second letter, Frédéric Bastiat tries and understand where does value comes from. He explores in an interesting manner the difference there is between “utility” and “value”, and although he may be mistaken on the concept of labour value, he clearly demonstrates that the idea according to which a part of the value would be a free gift of nature unduly sold by the seller/owner of a good does not pass the smell-test (when I buy a bottle of Evian water, I am not paying the water, even if it is useful to me).

Today’s quote is interesting from another point of view, namely his definition of economics. Indeed, his assertion is reminded to us by Ludwig von Mises introducing catallactics in chapter XIV of Human Action in the following words: “the task of this branch of knowledge to investigate the market phenomena, that is, the determination of the mutual exchange ratios of the goods and services negotiated on markets, their origin in human action and their effects upon later action.” Mises writes that there is no doubt about this definition of economics, this may have to be checked but in any case, both himself and Bastiat agree on this point.

Other quotes from Property and Plunder:
Part 1 of 5Part 3 of 5 – Part 4 of 5 – Part 5 of 5

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