Real wealth constantly passing from the domain of private property into the communal domain
That … veil which is spread before the eyes of the ordinary man, which even the attentive observer does not always succeed in casting aside, prevents us from seeing the most marvelous of all social phenomena: real wealth constantly passing from the domain of private property into the communal domain.
Wealth marvelously passing from the
private to the communal domain? It sounds like a socialist’s redistributionist
fantasy!
But wait — Frédéric Bastiat, the great
laissez-faire radical, wrote those words in his book Economic Harmonies, chapter 8,
provocatively titled “Private Property and Common Wealth.”
He repeats the point throughout his
fascinating chapter:
And so, as I have already said many times and shall doubtless say many times more (for it is the greatest, the most admirable, and perhaps the most misunderstood of all the social harmonies, since it encompasses all the others), it is characteristic of progress (and, indeed, this is what we mean by progress) to transform onerous utility into gratuitous utility; to decrease value without decreasing utility; and to enable all men, for fewer pains or at smaller cost, to obtain the same satisfactions. Thus, the total number of things owned in common is constantly increased; and their enjoyment, distributed more uniformly to all, gradually eliminates inequalities resulting from differences in the amount of property owned.
Here’s what Bastiat has in mind. In a competitive
marketplace with advancing technology, as the effort required to produce and,
hence, acquire things diminishes, the price of gaining utility falls. For
example, if the average worker had to work two hours, 40 minutes, to buy a
chicken in 1900, but only 14 minutes as the 21st century approached (actual statistics), Bastiat would say the chicken “is obtained for less
expenditure of human effort; less service is performed as it passes
from hand to hand; it has less value; in a word, it has become gratis,
[though] not completely.” In other words, most of the utility that had to be
paid for with painful effort in 1900 was free by 2000. (By
“less value,” Bastiat meant that the market price has fallen, not that the
chicken is less useful.)
Thus progress through the market order
consists in ever more people satisfying more of their wants at less and less
effort. Bastiat calls this a move from private property to common wealth because
he roots property in effort, and greater wealth is available to all with less effort.
What makes this possible? Technological innovation. As Bastiat puts it,
“Production has in large measure been turned over to Nature.”