President Barack Obama recently gave a speech at Georgetown University where he acknowledged the public opposition to the bailouts:

And although there are a lot of Americans who understandably think that government money would be better spent going directly to families and businesses instead of to banks -- you know, one of my most frequent questions in the letters that I get from constituents is, "Where's my bailout?" And I understand the sentiment. It makes sense intuitively, and morally it makes sense.

American citizens have heard similar complaints to this but sentiments such as "where's my bailout" overlook the fact that the bailout money is nothing more than "legal plunder." It is money taken from one group of persons, either through inflation, taxation or borrowing for future generations to repay, and given to another. So any government bailout, whether for bankers or troubled homeowners, will require the immoral process of forcefully redistributing wealth. The proclamations made by the President in his speech and common complaints among voters illustrate the confusion many hold about the proper role of government and the seducative lure of socialism. A great mind explored all of these issues in depth many years ago and voters frustrated with the status quo would be wise to listen to his teachings.

A brief review of The Law, a book by 19th century French classical-liberal economist Frederic Bastiat, assists greatly in gaining a general understanding of the proper role of government. In it he writes: “Each of us has a natural right-from God-to defend his person, his liberty, and his property. These are the three basic requirements of life, and the preservation of any one of them is completely dependent upon the preservation of the other two. For what are our faculties but the extension of our individuality? And what is property but an extension of our faculties?” 

Bastiat sounded much like Thomas Jefferson in identifying natural God-given rights being imbued in the individual person. In regards to the role of government and the rule of law:, he notes: “The nature of law is to maintain justice. This is so much the case that, in the minds of the people, law and justice are one and the same thing. There is in all of us a strong disposition to believe that anything lawful is also legitimate. This belief is so widespread that many persons have erroneously held that things are ‘just’ because law makes them so.” Therefore, Bastiat asked us to consider the difference between positive law and natural law. Just because a law is passed by the legislature and signed into law by the executive does not necessarily make it legitimate. It must first pass the ultimate moral litmus test of complying with the restraints on government and the respect for individual rights.

Bastiat further explained, “since an individual cannot lawfully use force against the person, liberty or property of another individual, then the common force — for the same reason — cannot lawfully be used to destroy the person, liberty, or property of individuals or groups.” So what is Bastiat saying here? He contends that even when individuals combine their might together to create a collective, such as an Army or Militia, this new entity is still bound by the same lawful restrictions on an individual. This new collective is only an extension of the individual rights of its participants and cannot lawfully do what an individual is prohibited from doing on his own, namely using aggressive force against another party in terms of taking or destroying their liberty or property. The collective only retains the same rights that the individual retains in regards to defense of its own life, liberty, or property. To put it more succinctly, governments cannot lawfully do what an individual himself cannot lawfully do. An individual has the ability to make a citizen’s arrest in response to someone committing a violent trespass against himself or another, but an individual citizen has no lawful ability to take that party’s personal income, under threat of force, even for general use. This latter is something that Bastiat identified as “legal plunder.”

But how is legal plunder to be indentified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. 

Bastiat considered any use of the law, and the aggressive threat of government force, beyond the basic protection of an individual right to be both immoral and giving into to the seductive lure of socialism.

Here I consider the most popular fallacy of our times. It is not considered sufficient that the law should be just; it must be philanthropic. Nor is it sufficient that the law should guarantee to every citizen the free and inoffensive use of his faculties for physical, intellectual, and moral self-improvement. Instead, it is demanded that the law should directly extend welfare, education and morality throughout the nation. This is the seductive lure of socialism. These two uses of the law are in direct contradiction to each other. We must choose between them. A citizen cannot at the same time be free and not free. (Emphasis added.)

Bastiat here directly challenged the main tenets of socialism: the goal of a socio-economic system in which property and the distribution of wealth are subject to control by the community.  To Bastiat, such a system is a violation of individual rights and an offense to freedom. As to the means by which socialists would use the law, he noted:

Since the law organizes justice, the socialists ask why the law should not also organize labor, education and religion. Why should not law be law for these purposes? Because it could not organize labor, education, and religion without destroying justice. We must remember that law is force, and that, consequently, the proper function of the law cannot fully extend beyond the proper functions of force. ... But when the law, by means of its necessary agent, force, imposes upon men a regulation of labor, a method or a subject of education, a religious faith or creed — then the law is no longer negative; it acts positively upon the people. It substitutes the will of the legislator for their own wills; the initiative of the legislator for their own initiatives. 

This is not to say that Bastiat opposed education, charity or morals but he saw those very things coming from the individual’s willingness to participate and not their compulsion to participate due to the threat of force. Bastiat clearly saw the latter as an injustice perpetrated on the people; a philanthropic tyranny no different from a dictatorship. Bastiat was morally opposed to forced taxation and considered it “legal plunder” and a growing threat to liberty.

Under the pretense of organization, regulation, protection, or encouragement, the law takes property from one person and gives it to another; the law takes the wealth of all and gives it to a few — whether farmers, manufacturers, shipowners, artists, or comedians. Under these circumstances, then certainly every class will aspire to grasp the law, and logically so. ... As long as it is admitted that the law may be diverted from its true purpose — that it may violate property instead of protecting it — then everyone will want to participate in making the law, either to protect himself against plunder or to use it for plunder. 

Bastiat here is saying that as long as government has the incredible power to take what rightfully belongs to others and use it for whatever reason they deem fit, it will be abused by parties seeking to better themselves at the expense of the majority. These parties are known in today’s vocabulary as special interests.

It appears that Bastiat accurately predicted the corrupt lobbying system that dominates Washington D.C. nearly 160 years after his death. Furthermore, Bastiat's description fits perfectly our present economic situation where the federal government is going from one bail-out to another stimulus package in an effort to pay off all the various special interests with their hand out. As prophetic and wise as Bastiat was, even he would be blown away by the magnitude of today's massive doses of "legal plunder."

Patrick Krey, M.B.A., J.D., L.L.M., is an attorney in New York.

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danwhitehead1 said:

	Thank you very much!! I've had this little book for years and have read it more than once as well as passing it along to others. It should be required reading in the schools, but we can't have that, can we?
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April 20, 2009
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archtoplee said:

	Little book You just gave me an idea Dan. The S.S. and history teachers in the Albuquerque public schools will be receiving this little book. Thanks== Lee
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April 21, 2009
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Dr. Wid said:

... Re: Arch and Dan ... Imagine that, they say they agree with Bastiat, and then they attempt to use the force of government to indoctrinate the gov't students in Bastiat's way of thinking. Bastiat, himself, wouldn't approve of that! And how/why would the gov't teachers teach his philosophy of gov't? Yes, The Law should be required reading ... in all homes. In our homeschool it certainly was. And when other parents asked me to teach their children in my home, it certainly was. But gov't teachers, in gov't schools, teaching gov't students, from gov't books about limited gov't ... how absurd to even consider! GET US OUT!! (of pub ed)

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April 21, 2009
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Charles_Byrd said:

	The Law Thanks for the piece. The Law is a very frequent re-read.
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April 21, 2009
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