Speculation would have started its wonders as soon as the first symptoms of insufficient harvest had appeared.

Frédéric Bastiat
Complete Works, Volume 2, pages 44 to 47 (in French)
January 24th, 1847

The Complete Works publish this article (not sure about my title’s translation) right after Futility of Protection for Agriculture that had been published one week earlier in the association’s newspaper, Libre-Échange. There is described the system of the sliding scale that consisted in setting tariffs according to the price of wheat so that they were high when the French production of wheat was high and then reduced or eliminated when the production was deficient. Frédéric Bastiat first describes how absurd it is to try and centralise such a decision favouring or disfavouring the import of wheat. As explained by Friedrich von Hayek in his speech accepting the Nobel Prize, the government does not have the knowledge allowing it to take the right decisions, or at least in this case, to take decisions on time.

Today’s quote introduces the description of how a free market functions and what are its strengths. Indeed, despite all the bad press around the words “speculation” and “speculators” in France, the phenomenon presents undeniable benefits, be it in terms of abundance of available products or in terms of price (concerning the latter criteria, it is necessary to compare the price obtained “thanks to” the speculator against what it would be otherwise rather than compare the price obtained “because of” the speculator against what it used to be when there was no shortage).

It is so rare that speculation be seen and described in a positive manner that this (very short) article deserves to be read!