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Thoughts on Bastiat
(With a Nod to Keynes!)
Remarks at the Bastiat–Hoiles Prize Dinner

Richard W. Fisher
President and CEO
Federal Reserve Bank of Dallas

New York City
November 2, 2011

The views expressed are my own and do not necessarily reflect official positions of the Federal Reserve System.

Thoughts on Bastiat
(With a Nod to Keynes!)
Richard W. Fisher
Thank you, Amity [Shlaes].
This is an important evening. We gather under the name of Frédéric Bastiat to celebrate those
who write about free markets, a concept that for many of today’s foremost economic policy
pundits is as provocative as a Texan evoking the virtues of a Frenchman.
Bastiat would no doubt be pleased that this most famous of dining rooms is not lit by candlelight,
but by the agent of creative destruction that is electricity. Of course, the term “creative
destruction” is Joseph Schumpeter’s, not Bastiat’s. Like Bastiat, Schumpeter was an eccentric.
Having immigrated to America and to Harvard, Schumpeter was said to introduce himself to his
first class by saying he wished to be considered “the greatest economist in the world, the greatest
horseman in Austria and the best lover in Vienna.” To which he quickly added, “I never became
the greatest horseman in Austria.” Schumpeter was impossibly vain, but discerning. It is no small
thing that he described Bastiat as “the most brilliant economic journalist who ever lived.”1
In July, Jim Grant wrote a fine piece on Bastiat for the Wall Street Journal, titled “For Love of
Laissez-Faire,” reviewing an English-language collection of Bastiat’s letters titled The Man and
the Statesman. Grant quotes Bastiat as praising the qualities of readable literature as follows: “It
has to be short, clear, accurate and as full of feeling as of ideas, all at the same time.”2 You might
be aghast at my quoting Keynes as having suggested what I think might be a good addendum to
Bastiat’s literary advice: “Words ought to be a little wild, for they are the assault of thoughts
upon the unthinking.”3
Tonight, we celebrate a small coterie of women and men who write “short, clear, accurate”
articles that are “full of feeling” for the idea of free markets and, if not necessarily wild, do, in
fact, frontally assault run-of-the-mill thinking.
Tonight, we celebrate not just free markets, but freedom itself. Freedom to express thought.
Freedom to challenge convention. Freedom to be heard and to be seen and felt doing so.
“The cause of freedom is not the cause of a race or a sect, a party or a class―it is the cause of
human kind, the very birthright of humanity.”4 Anna Julia Cooper, the daughter of a slave and
one of the first African-American women to earn a doctorate―at the University of Paris, no
less―said that.
“Don’t wink at a girl in the dark.” My father said that.
Amity was kind to mention my dad and what he overcame. Like Bastiat, my father was orphaned
at a young age―at the age of 6. Unlike Bastiat, he did not inherit an estate in Mugron. In fact,
until he was picked up by local magistrates in Queensland, he and his father, my grandfather,
begged for food on the streets in the aftermath of the depression that gripped Australia at the turn

of the previous century. Unlike Ms. Cooper, he never received an education. He barely made it
through fourth grade; he certainly did not get a formal education in economics. Yet, like Ms.
Cooper, he understood the romance and power of freedom. And he understood what Bastiat
taught us all: He understood an idea that is “full of feeling,” unseen or improperly
communicated, is the equivalent of the proverbial tree that falls in the forest. He could not have
spelled it, but he instinctively understood the meaning of praxeology; his quip about winking is
as good as any to remind economists of the need to understand the basics of human action and
reaction when they ply their models and their prescriptions for what ails us.
The nice things that Amity said about me were all made possible because my father and mother
came to America. Because they believed that here, more than anywhere else, human endeavor
was prized, and that here, freedom was and is the “birthright of humanity.” Having been a ward
of the state, my father taught his son―me―that individual effort is the sole proven basis for
advancement; that dependence on government, which he managed to escape, is just another word
for entrapment and, however well intentioned, severely regressive.
Most everyone in this room tonight is concerned that, as Bastiat wrote in the aftermath of the
French Revolution of 1848, we are at risk of becoming a nation where “the state is responsible
for providing a living for everyone.”5 The reality is that even if this were desirable, which it is
not, pliant fiscal authorities―Republican and Democrat―who have led us down this road for
decades find themselves in a financial cul de sac; they have run out of enabling money.
Of course, they could skip the curb and keep on moving in the same direction were the central
bank to accommodate them by monetizing their debts. But we all know that ends ultimately in
the most ruinous of scenarios, the onset of hyperinflation. It is a far better thing for them to face
up to the fact that they have been improvident and must now change their ways―that they must
not, and cannot, hide under the skirts of the Federal Reserve. The central bank must never
become an accomplice to feckless government. Indeed, as we at the Fed and central banks
worldwide are guardians of a fiat currency―a faith-based currency―it is imperative that we
never, ever, ever, be seen to have the slightest inclination to countenance doing so. For that
fragile faith, once violated, can never be restored.
To be fair, our politicians develop their initiatives according to what gets them elected and
reelected. This is how a democracy works. Those of us who cherish freedom know that
democracy is freedom’s great enabler. Thus, it is incumbent upon all of us to provide the people
with the information they need to make informed judgments, not in obscure math published in
elite journals, but in plain language they understand, disseminated through media they can
readily access.
The awardees tonight do all of us one better: They strip bare the hypocrisy of the nanny state, see
through the veil of differential calculus and complex formulae that modern economists have
come to rely upon, and in the very best tradition of Bastiat and his disciples, appeal to logic to
expose the unintended consequences and longer-term effects of popular policy prescriptions.
They do so in readable form that would do Bastiat proud: They wink in the brightest of daylight,
communicating their passion for free markets for all to see. Tonight, we honor their courage. We
applaud the strength of their conviction and obstinacy in sticking to their principles. And not
unimportantly—thanks to Tom Smith, Pamela Hoiles, Charles Kadlec, Jim Piereson and

others—we reward them with generous prizes so that they will keep on doing what they do so
well: Articulating the virtues of free and open markets.
After dinner―and what I am certain will be a far more entertaining speech than this one, by
Professor [Russ] Roberts―this year’s Hoiles Prize and Bastiat Prize will be presented. I was
honored to be a judge for the latter. I learned something from each of the articles I read from
each of the six worthy Bastiat Prize finalists. You are all bright, shining stars. Yet, Amity, being
the discreet task master and master of surprise that she is, has not even revealed the winner to the
judges. I am eager to find out. So in my best Texan imitation of what I am sure was the most
frequent of all of Bastiat’s exhortations: À table et place au spectacle. Let’s eat and get on with
the show. Mille fois merci.
History of Economic Analysis, by Joseph A. Schumpeter, New York: Oxford University Press,
1954, p. 500.
“For Love of Laissez-Faire,” by James Grant, Wall Street Journal, July 23, 2011.
John Maynard Keynes, as quoted in New Statesman and Nation, London, July 15, 1933.
The Voice of Anna Julia Cooper: Including a Voice from the South and Other Important
Essays, Papers, and Letters, by Charles Lemert and Esme Bhan, Lanham, Md.: Rowman &
Littlefield, 1998, p. 106.
The Collected Works of Frédéric Bastiat, Vol. 1: The Man and the Statesman: The
Correspondence and Articles on Politics, by Frédéric Bastiat, Indianapolis, Ind.: Liberty Fund,
2011, p. 205.