But have the rich on that account renounced the policy of plunder? It has never occurred to them. The argument of the indirect beneficial effects of spending continues to serve as their pretext.

Frédéric Bastiat
Economic Harmonies

“The argument of the indirect beneficial effects” referenced here, also known as “trickle down economics”, is the fallacious argument according to which, when government takes from the poor to give to the rich (in the form of subsidies to the Opera for instance), this benefits the poor because the spending allows to pay the poor. Frédéric Bastiat notes that this argument, sort of Keynesian multiplier before it was “invented” by Lord Keynes, has been “legitimately” reversed after the revolution of February 1848, which demands that the rich pay in order to give to the poor (who will then be able to spend the money in order to fund the industry).

Of course, in one case as in the other, this is nothing else but plunder. The argument is a fallacy. Money taken to the ones to be given to the others will indeed be spent or invested, whoever is the beneficiary. The issue is the use of governmental force in order to take the money in the first place. This is the reason why it is key to identify what are the public services that are legitimate in order to assess if taxation is legitimate. One can see here the problem of dictatorship of the majority which will later be identified by Friedrich Hayek. What today’s quote is exposing is that nobody in France is attempting to restrict the powers of government when everybody is trying to become the beneficiary of the lavish spending of government, however legitimate it might be.

We are facing here a problem of ethics that has not been resolved in this early 21st century yet.

Other quotes from Private and Public Services:
Exchange – Value – Monopoly – Individual – Responsibility – Rights – Revolution – Ethics

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