When it is a question of examining the general laws that society obeys, the way men behave universally carries more weight than a few utterances.
Letter No. 4
F. Bastiat to Pierre-Joseph Proudhon
Today’s quote is very important to understand the economist’s way of thinking, in particular when he is a liberal. We all have ideals, including some about the way other people ought to behave (altruism for instance, is admired by numerous people who would like to see every one of us behave altruistically at all times), however, the world is such that some behaviours follow naturally some situations, independently from what some people think should be the right(eous) behaviour. The role of the economist is to understand these situations and the consequences that follow, not to only expose them and then ignore them in the hope that they will disappear.
It is also an important lesson to understand when one is looking at “preferences” within a society. If a large majority of the population says it is favourable to something (a “non-polluting” electric car for instance) but then act in contradiction to that wisdom (people keep on buying petrol engines’ cars), it is then possible to conclude that, economically, the preference is for the way the population acts rather than what it says it prefers.
However, these ideas do not really sum up the letter from Frédéric Bastiat who reacts to that of Pierre-Joseph Proudhon by exposing his contradictions, the latter having written in his letter that interest was legitimate as well as illegitimate. You will find various reasons explaining why interest is legitimate, which infers that capitalism is legitimate as well.
Other quotes from Free Credit:
First letter – Second letter – Third letter – Fourth letter – Fifth letter – Sixth letter – Seventh letter – Eighth letter – Ninth letter – Tenth letter – Eleventh letter – Twelfth letter – Thirteenth letter – Fourteenth letter