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Looking to Bastiat: Classic Advice for the Modern Crisis

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By William Clements and Layné Clements
August 5, 2020

In the midst of the economic chaos spurred from the COVID-19 pandemic, including rushed reopenings, unexpected shutdowns and stock market volatility, a haunting, yet inconspicuous question hovers above the country: is the familiar economy of old changed indefinitely? The current administration has faced a plethora of uniquely diverse challenges, but is it possible that we are fighting a new enemy with our same outdated weapons? I believe it is time to develop a new approach to economic policy and theory based on Frederic Bastiat’s leading principles.

As of Friday, July 31st, 2020 the United States GDP witnessed a historic drop which presented an annualized rate of 32.9%, however, the decline in the second quarter was only 9.5%. In today’s political climate, it is almost instinctive to attribute the falling GDP to a failure in the current administration’s economic policy, but it is important that we, as scholars, seek to view the entire picture clearly and honestly. When placed within context, it can be noted that the EU saw a second-quarter decline in GDP of 12.1% with Spain declining at 18.5% and 10.1% in Germany alone. This illustrates the interconnectedness of the world’s economic systems and the resulting interdependency. Protectionism, populism and isolationism have recently been narrated to great lengths with high hopes of stoking the promise of economic prosperity for all living within the confines of the national borders, but examination frankly yields this far from true. “Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone else,” stated the great economist Frederic Bastiat, and it is still quite applicable in our current situation.

Despite widespread simplification, economics involves more than adopting basic knowledge concerned with production, consumption and the transfer of wealth. Economics also includes observing and studying consumer behaviors, psychological responses to incentives, and even seeks to account for the, “Hidden gems of morality,” as found in Bastiat’s parable of the broken window. For example, most major news networks have hosts and/or pundits cavalierly purporting economic knowledge and trends, but generally lacking the insightful understanding needed to do so effectively. Even worse, this has also occurred in the critical dissemination of medical information within the thralls of this pandemic. As Bastiat once asserted, “The worst thing that can happen to a good cause is not to be skillfully attacked, but to be ineptly defended.” Considering recent events, this is an all-too-familiar occurrence.

Though they may seem elementary at first, several questions should be explored regarding the American economy, such as whether a change has been made so that its sole focus is no longer profits and whether the American people truly believe in practicing “laissez-faire” economics. Wouldn’t this directly dissent with the publicly favored passing of the Paycheck Protection Program (PPP)? How would farmers and farmland owners be supported in collecting the extravagant government subsidies, to a tune of about $25 billion as of 2014, and major corporations be given enormous incentive packages ranging between $1.7-3 billion to set up shop in strategic regions? Do Americans truly value the risk and reward of entrepreneurship or have the people come to view the state as, “Something to live off,” as Bastiat feared? Bastiat ingeniously quoted that, “Slavery, protection and monopoly find defenders, not only in those who profit by them but in those who suffer by them.”

Here is where it gets interesting. Are farmers wrong for accepting millions of dollars in subsidies to guarantee crop-yield? Should Google and Amazon forgo these attractive incentives and place their businesses in areas with less attractive perks? Should these nationally-leading companies bear responsibility for the impoverished and the ill? If so, what is the concern of the government? Each question has been brought to the forefront during the COVID-19 crisis and we are now left with more confusion than solutions. Examine the intersections of politics and economics when pondering these questions as Bastiat’s fears and the deepened political division within the country becomes ever apparent. In closing, to borrow the words of Bastiat once more, “There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.” We can only hope the good economists heed the call.


William Clements, Ph.D., is a Professor of Criminal Justice and Psychology at higher education institutions. As a B.S. of Justice Studies, an M.S. of Forensic Psychology (concentration: Legal Systems), and a PhD of Public Policy and Administration (concentration: Public Management and Leadership), he is a research fellow at the Institute for Polarities of Democracy and has served in public service fields for 13+ years. His interests include investigative journalism, economics, politics, and, of course, public policy. Email: [email protected]

Layné Clements, B.S. in Biological and Biomedical Sciences (minor: Chemistry), has been a laboratory researcher for 3+ years and is an advocate for science literacy, public health issues, climate change action, and precision medicine.

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The American Society for Public Administration is the largest and most prominent professional association for public administration. It is dedicated to advancing the art, science, teaching and practice of public and non-profit administration.

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