2011년 12월 21일 수요일

F. Bastiat and his 'negative railroads'



(...) A famous section of Economic Sophisms concerns the way that tariffs are inherently counterproductive. Bastiat posits a theoretical railway between Spain and France that is built in order to reduce the costs of trade between the two countries. This is achieved, of course, by making goods move to and from the two nations faster and more easily. Bastiat demonstrates that this situation benefits both countries' consumers because it reduces the cost of shipping goods, and therefore reduces the price at market for those goods.

However, each country's producers begin to criticize their governments because the other country's producers can now provide certain goods to the domestic market at reduced price. Domestic producers of these goods are afraid of being out-competed by the newly viable industry from the other country. So, these domestic producers demand that tariffs be enacted to artificially raise the cost of the foreign goods back to their pre-railroad levels, so that they can continue to compete.

Bastiat raises two significant points here:
  1. Even if the producers in a society are benefited by these tariffs (which, Bastiat claims, they are not), the consumers in that society are clearly hurt by the tariffs, as they are now unable to secure the goods they want at the low price at which they should be able to secure them.
  2. The tariffs completely negate any gains made by the railroad and therefore make it essentially pointless.

To further demonstrate his points, Bastiat suggests that, rather than enacting tariffs, the government should simply destroy the railroad anywhere that foreign goods can outcompete local goods. Since this would be just about everywhere, he goes on to suggest that that government should simply build a broken or "negative" railroad right from the start, and not waste time with tariffs and rail building.

In short, the thrust of Bastiat's negative railroad hinges on two major points:
  1. All economic decisions should be made with the consumer in mind (this is the central theme of Bastiat's economic ideology, and favoring the consumer rather than the supplier is demand side economics, the opposite of supply side economics, but Bastiat does not share the interventionism of Keynesian demand side economists).
  2. Tariffs serve no purpose but to negate the gains provided to society by technology, labor, ingenuity, determination and progress.
An important corollary to these conclusions is that the power that consumers wield with any governing body, while theoretically tremendous, is extremely diffuse in application. Producers, on the other hand, while not as powerful on the whole as the sum total of consumers, have the ability to consolidate their power in ways that make it much more attractive for governing bodies to service their needs. Thus, while consumers could theoretically shut down an entire industry (or government) by boycotting, or refusing to buy/sell/do something, the likelihood of the great mass of people organizing in this way for any reason whatever is so infinitesimal as to be practically impossible. Producers, on the other hand, can form combinations and trade groups and are thus able to threaten or cajole the government with shutting down a single industry, with reductions in political and financial contributions to the government agents who make certain decisions, etc. It is for this reason that governments are much more likely to pander to the desires of producers than to those of consumers, and it is for this reason, Bastiat concludes, that governments are inherently adversarial to the interests of the people as a whole. Indeed, they are even adversarial, in some way, to the interests of the producers themselves, as the producers of one good or service are still consumers of all the other goods and services. (...)


자료 2:  His Economic Sophisms,  링크 1, 링크 2

자료 3: His Economic Sophisms, by way of thankful Internet Archive:

Chapter 17. Negative Railroads

I have said that as long as one has regard, as unfortunately happens, only to the interest of the producer, it is impossible to avoid running counter to the general interest, since the producer, as such, demands nothing but the multiplication of obstacles, wants, and efforts. 

I find a remarkable illustration of this in a Bordeaux newspaper. 

M. Simiot* raises the following question: 

Should there be a break in the tracks at Bordeaux on the railroad from Paris to Spain? 

He answers the question in the affirmative and offers a number of reasons, of which I propose to examine only this: 
There should be a break in the railroad from Paris to Bayonne at Bordeaux; for, if goods and passengers are forced to stop at that city, this will be profitable for boatmen, porters, owners of hotels, etc. 
Here again we see clearly how the interests of those who perform services are given priority over the interests of the consumers. 

But if Bordeaux has a right to profit from a break in the tracks,and if this profit is consistent with the public interest, then Angouleme, Poitiers, Tours, Orleans, and, in fact, all the intermediate points, including Ruffec, Chatellerault, etc., etc., ought also to demand breaks in the tracks, on the ground of the general interest—in the interest, that is, of domestic industry— for the more there [Alexandre fitienne Simiot, author of Gate du chemin de fer de Paris d Bordeaux (Bordeaux: Durand, 1846). and subsequently represenutive of the Gironde in the Constituent Assembly.— Translator.] are of these breaks in the line, the greater will be the amount paid for storage, porters, and cartage at every point along the way. By this means, we shall end by having a railroad composed of a whole series of breaks in the tracks, i.e., a negative railroad

Whatever the protectionists may say, it is no less certain that the basic principle of restriction is the same as the basic principle of breaks in the tracks: the sacrifice of the consumer to the producer, of the end to the means. 

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