Capital is the characteristic marker of progress. It is the necessary and unique conduit for it. Its special mission is to help value transitioning from being expensive to being free.
Author unknown, quoted by Frédéric Bastiat
Complete Works volume I, page 189 (in French)
Letter dated September 9th, 1850
Following a letter dated August 17th, 1850 that hints at a depressive phase in Frédéric Bastiat despite his usual optimism when he writes “For a long time, I have been practicing to seize the good when it comes, but without ever expecting it.”, the current letter hints at the serenity found by a man at the end of his life who should be proud of his own accomplishments.
Frédéric Bastiat rejoices here to the sentiment of having been understood. Today’s quote is not from him but a quote he extracted from an essay sent to him by a “young man” (of course, I would be interested in learning who the mysterious author is, please do not hesitate to use the comments section if you know). According to Frédéric Bastiat himself, “this sentence holds and recaps the most fertile economic phenomenon that [he has] tried and depict”. To keep it simple, this fertile phenomenon is the natural spread of productivity gains through time. Indeed, if productivity gains allow to enrich the capitalist in the first place, competition soon allow consumers to benefit from them as well until benefitting from them entirely. Whoever still doubts about this can refer to the evolution of wealth creation over the last 250 or even 150 years – who could think today that Bastiat (who was a Member of Parliament in France, not really a poor fellow) was more wealthy than self when observing simply the sanitary, the transportation or the health conditions with which he had to cope?
This is also what William Nordhaus attempted to measure in 2018, concluding that about 98% of value created by innovation benefits consumers.