SEVENTH SPEECH

Free-trade is the cause, or at least one of the aspects of the great cause of the people, the masses, democracy.

Frédéric Bastiat
Complete Works, Volume 2, pages 311 to 328 (in French)
January 7th, 1848

In this speech, Frédéric Bastiat exposes the weaknesses of protectionism and how it is nefarious to the people. He looks back at the legislation of 1793 and the legislation of 1822, which were diametrically opposed in the sense that the former aimed at favouring the entry of necessities but erred by restricting their exports (the restrictions on exports reduce imports that cannot be paid for without the former) while the latter aimed at restricting imports while favouring exports (which corresponds to a policy of impoverishment). The mistake of 1793 is more acceptable because it aimed at helping the masses when that of 1822 aimed at helping the rich capitalists. He also shows how the legislative moves in England followed the same pattern – protectionism aimed at satisfying the aristocracy when free-trade took into account the interests of the people.

Besides, he introduces his speech with the example of a machines producer met in Marseilles. This example is of particular interest because it introduces the notion of “warehouse works” which is nothing less than the establishment of a free zone restricted to the company for its export business. He underlines how this “privilege” is imperfect but shows how tariffs exemptions on exported production allowed the enterprise to flourish. This example will be copied on a larger scale in the 1980’s in China with the creation of Special Economic Zones, illustrates perfectly the superiority of an unrestrained economic model.

Unfortunately, the power thirsty governments sometimes allow a small dose of freedom but cannot help but circumscribe it as much as they can.

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