To bring a thing to its complete state of utility, the contribution of labor is in inverse ratio to the contribution of Nature.

Frédéric Bastiat
Economic Harmonies

This second part exploring the means to provide for our needs creates an opportunity to introduce the concepts of utility, labour, capital and value.

Interestingly, Frédéric Bastiat had clearly understood that Adam Smith was mistaken on at least two aspects of what value is, namely that it was given by labour and that only material things had value. His task may have been made easier thanks to his opposition to marxist theory (even if Capital was published after his death), which also gets wrong on these two aspects. Unfortunately, if he is close to the forthcoming understanding of Carl Menger when he writes “it is the free appraisal of these services that is the basis of value” or “We shall see later that exchange is necessary to determine value”, one can think that he may be wrong when he writes: “it is in this effort, not in the gift of Nature, that the value consists” (unless, maybe, if he is actually referring to opportunity costs that this effort would require in determining value).

In any case, today’s quote that reminds us that nature counts only for a little part of material goods that we enjoy, is a good way of fighting preconceived ideas that keep coming back in focusing on the material aspects of wealth (ideas that are usually found in unaware mercantilist speeches).

Other quotes from Man’s Wants:
Introduction – Part 1 – Part 2 – Conclusion

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