Bastiat, the effort saved and the value of things
Bastiat criticizes the classical economists for having attributed a value to natural resources and having admitted that they were only given up for a remuneration. “So men, and especially landowners, sell God’s blessings for actual work, and receiving a reward for utilities in the production of which their labour took no part” (Bastiat 1850 [1851]: 6).
Economists have analysed exchange as an exchange of goods, and they sought the origin of value in the utility of these goods or in the time required to produce them. However, the often used example of the diamond shows that the value of a commodity can be unrelated to its usefulness or the effort necessary for its production. What we exchange are not goods but services produced by labour and nature, most often together. The cooperation of nature is free; that of labour is costly because it requires effort. However, it should not be concluded that the value is determined by the amount of labour spent by the person producing the service: it is proportional to the labour saved by the person who receives it. The labour commanded conceived as a measure of value, as in Smith’s Wealth of Nations (1776 [1976]), is seen by Bastiat as the cause of value: it is the labour one saves when buying a service that determines its value.This attempt to reconstruct the theory of value was met with many reservations. The long review of Harmonies economiques that Ambroise Clement (1850) published in the Journal des economistes is very critical. Bastiat’s starting point was, in his view, erroneous: the cooperation of natural resources is not always free. It would be free only if they are abundant enough to be at the disposal of any agent who needs them, and if they are not susceptible of private and exclusive ownership. To answer Proudhon, the obvious must not be denied: the services of scarce natural resources are costly. However, it does not follow that the landowners should be evicted, because they bought the property they own and paid for the value of the natural service of land, regardless of the capital invested.