The fight between those who prefer free markets and those who prefer protectionism and domestic production is a war that has been waged since the time of mercantilism in the 1600’s. Adam Smith, Frédéric Bastiat, and many other classical economists of their time fought hard against the idea that markets needed to be controlled extensively by government regulations. They, along with many others, believed that government intervention in the economy produced inefficiency and dead-weight loss.
When it came to trade and tariffs, the principles of these individuals remained the same. Bastiat was staunchly opposed to the government intervening in free trade and imposing tariffs on any products from a foreign nation for the sake of domestic industry. This is in stark contrast to the Trump Administration’s view on the economy and trade. President Trump has consistently blamed trade with other countries for the fall of many industries in the U.S. He has claimed that enforcing tariffs on specific goods, like steel, aluminum, and some agricultural products, will help to bring those industries back in the U.S. and provide new jobs for Americans.
But this economic reasoning is deeply flawed. Bastiat, long ago in 1845, wrote his famous Candlestick Makers’ Petition to the French Parliament. This letter was a sarcastic argument against implementing tariffs in France. He writes as though he were a candlestick maker pleading for the government to introduce tariffs on a rival producer of light. Below are excerpts from his letter:
We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly we suspect he is being stirred up against us by perfidious Albion (excellent diplomacy nowadays!), particularly because he has for that haughty island a respect that he does not show for us.
We ask you to be so good as to pass a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull’s-eyes, deadlights, and blinds — in short, all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses, to the detriment of the fair industries with which, we are proud to say, we have endowed the country, a country that cannot, without betraying ingratitude, abandon us today to so unequal a combat.
Be good enough, honourable deputies, to take our request seriously, and do not reject it without at least hearing the reasons that we have to advance in its support.
First, if you shut off as much as possible all access to natural light, and thereby create a need for artificial light, what industry in France will not ultimately be encouraged?
If France consumes more tallow, there will have to be more cattle and sheep, and, consequently, we shall see an increase in cleared fields, meat, wool, leather, and especially manure, the basis of all agricultural wealth.
If France consumes more oil, we shall see an expansion in the cultivation of the poppy, the olive, and rapeseed. These rich yet soil-exhausting plants will come at just the right time to enable us to put to profitable use the increased fertility that the breeding of cattle will impart to the land.
Our moors will be covered with resinous trees. Numerous swarms of bees will gather from our mountains the perfumed treasures that today waste their fragrance, like the flowers from which they emanate. Thus, there is not one branch of agriculture that would not undergo a great expansion.
The same holds true of shipping. Thousands of vessels will engage in whaling, and in a short time we shall have a fleet capable of upholding the honour of France and of gratifying the patriotic aspirations of the undersigned petitioners, chandlers, etc.
But what shall we say of the specialities of Parisian manufacture? Henceforth you will behold gilding, bronze, and crystal in candlesticks, in lamps, in chandeliers, in candelabra sparkling in spacious emporia compared with which those of today are but stalls.
There is no needy resin-collector on the heights of his sand dunes, no poor miner in the depths of his black pit, who will not receive higher wages and enjoy increased prosperity.
It needs but a little reflection, gentlemen, to be convinced that there is perhaps not one Frenchman, from the wealthy stockholder of the Anzin Company to the humblest vendor of matches, whose condition would not be improved by the success of our petition.
We anticipate your objections, gentlemen; but there is not a single one of them that you have not picked up from the musty old books of the advocates of free trade. We defy you to utter a word against us that will not instantly rebound against yourselves and the principle behind all your policy.
Bastiat makes the argument that the government should require the light from the sun to be blocked out in order to promote domestic industry. The sun has put many candlestick makers out of business and should thus be “tariffed” so that domestic candlestick makers can compete.
Obviously, this argument is crazy. No one would really argue that the light that the Sun produces is bad for domestic industries. Just because the Sun produces light more efficiently than candlestick makers is no reason to extinguish its light altogether.
This is the exact point that Bastiat is trying to persuade the French Parliament to see. Just because foreign markets can produce goods more efficiently than domestic markets does not mean they are bad and should be taxed. The “candlestick makers” in our real life economy should spend more of their time on tasks that they can do more efficiently than their competitors. Specialization and free trade produce greater economy efficiency and economic growth. President Trump should take this example to heart and reduce all tariffs he has imposed on foreign countries as much as possible.
To read the full letter Bastiat wrote, click here.
Dallin Overstreet is a Senior Policy Analyst at the American Freedom Institute