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Gustave de Molinari

Belgian political economist and classical liberal theorist (1819–1912)

Gustave de Molinari (3 March 1819 – 28 January 1912) was a Belgian political economist and classical liberal theorist.

If there is one well-established truth in political economy, it is this:
That in all cases, for all commodities that serve to provide for the tangible or intangible needs of the consumer, it is in the consumer’s best interest that labor and trade remain free, because the freedom of labor and of trade have as their necessary and permanent result the maximum reduction of price.
- Gustave de Molinari, 1848

Quotes

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The Production of Security (1849)

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Gustave Molinari, J. Huston McCulloch (tr.), The Production of Security, Ludwig von Mises Institute, 1977, 2009; Originally published in French as: Gustave de Molinari, « De la production de la sécurité », Journal des économistes 22, no. 95, pp. 277–290. (Attribution C.C. 3.0 Unported.)
The Production of Security
That in all cases, for all commodities that serve to provide for the tangible or intangible needs of the consumer, it is in the consumer’s best interest that labor and trade remain free, because the freedom of labor and of trade have as their necessary and permanent result the maximum reduction of price.
... Whence it follows:
That no government should have the right to prevent another government from going into competition with it, or to require consumers of security to come exclusively to it for this commodity.
  • p. 3, as cited in: Hans-Hermann Hoppe (2001), Democracy - the God That Failed: The Economics and Politics of Monarchy, Democracy, and Natural Order. Transaction Publishers, p. 271
The Natural Order of Society
  • There are two ways of considering society.  According to some, the development of human associations is not subject to providential, unchangeable laws.  Rather, these associations, having originally been organized in a purely artificial manner by primeval legislators, can later be modified or remade by other legislators, in step with the progress of social science.  In this system the government plays a preeminent role, because it is upon it, the custodian of the principle of authority, that the daily task of modifying and remaking society devolves.

    According to others, on the contrary, society is a purely natural fact.  Like the earth on which it stands, society moves in accordance with general, preexisting laws.  In this system, there is no such thing, strictly speaking, as social science; there is only economic science, which studies the natural organism of society and shows how this organism functions.

    • p. 15-16
  • Man experiences a multitude of needs, on whose satisfaction his happiness depends, and whose non-satisfaction entails suffering.  Alone and isolated, he could only provide in an incomplete, insufficient manner for these incessant needs.  The instinct of sociability brings him together with similar persons, and drives him into communication with them.  Therefore, impelled by the self-interest of the individuals thus brought together, a certain division of labor is established, necessarily followed by exchanges.  In brief, we see an organization emerge, by means of which man can more completely satisfy his needs than he could living in isolation.

    This natural organization is called society.

    The object of society is therefore the most complete satisfaction of man's needs.  The division of labor and exchange are the means by which this is accomplished.

    • p. 17-18
  • Everywhere, men resign themselves to the most extreme sacrifices rather than do without government and hence security, without realizing that in so doing, they misjudge their alternatives.
    • p. 20
  • Suppose that a man found his person and his means of survival incessantly menaced […]

    Even though this man might be asked to surrender a very considerable portion of his time and of his labor to someone who takes it upon himself to guarantee the peaceful possession of his person and his goods, wouldn't it be to his advantage to conclude this bargain?

    Still, it would obviously be no less in his self-interest to procure his security at the lowest price possible.

    • p. 20-21
Competition in Security
  • In all cases, for all commodities that serve to provide for the tangible or intangible needs of the consumer, it is in the consumer's best interest that labor and trade remain free, because the freedom of labor and of trade have as their necessary and permanent result the maximum reduction of price.
    • p. 22
  • The interests of the consumer of any commodity whatsoever should always prevail over the interests of the producer.
    • p. 22
  • The production of security should, in the interests of the consumers of this intangible commodity, remain subject to the law of free competition.  …  [N]o government should have the right to prevent another government from going into competition with it, or to require consumers of security to come exclusively to it for this commodity.
    • p. 22
  • The production of security should, in the interests of the consumers of this intangible commodity, remain subject to the law of free competition.
    • p. 22–23.
  • No government should have the right to prevent another government from going into competition with it, or to require consumers of security to come exclusively to it for this commodity.
    • p. 23.
  • But why should there be an exception relative to security?  What special reason is there that the production of security cannot be relegated to free competition?  Why should it be subjected to a different principle and organized according to a different system?
    • p. 24
Security an Exception?
  • It offends reason to believe that a well-established natural law can admit of exceptions.  A natural law must hold everywhere and always, or be invalid.  I cannot believe, for example, that the universal law of gravitation, which governs the physical world, is ever suspended in any instance or at any point of the universe.  Now I consider economic laws comparable to natural laws, and I have just as much faith in the principle of the division of labor as I have in the universal law of gravitation.  I believe that while these principles can be disturbed, they admit of no exceptions.
    • p. 25
The Alternatives
  • In the entire world, there is not a single establishment of the security industry that is not based on monopoly or on communism.  […]  Political economy has disapproved equally of monopoly and communism in the various branches of human activity, wherever it has found them.  Is it not then strange and unreasonable that it accepts them in the security industry?
    • p. 27–28
Monopoly and Communism
  • If the roused and insurgent consumers secure the means of production of the salt industry, in all probability they will confiscate this industry for their own profit, and their first thought will be, not to relegate it to free competition, but rather to exploit it, in common, for their own account.  They will then name a director or a directive committee to operate the saltworks, to whom they will allocate the funds necessary to defray the costs of salt production.  Then, since the experience of the past will have made them suspicious and distrustful, since they will be afraid that the director named by them will seize production for his own benefit, and simply reconstitute by open or hidden means the old monopoly for his own profit, they will elect delegates, representatives entrusted with appropriating the funds necessary for production, with watching over their use, and with making sure that the salt produced is equally distributed to those entitled to it.  The production of salt will be organized in this manner.

    This form of the organization of production has been named communism.

    When this organization is applied to a single commodity, the communism is said to be partial.

    When it is applied to all commodities, the communism is said to be complete.

    But whether communism is partial or complete, political economy is no more tolerant of it than it is of monopoly, of which it is merely an extension.

    • p. 31
  • Whether communism is partial or complete, political economy is no more tolerant of it than it is of monopoly, of which it is merely an extension.
    • p. 32
The Monopolization and Collectivization of the Security Industry
  • Everywhere, when societies originate, we see the strongest, most warlike races seizing the exclusive government of the society.  Everywhere we see these races seizing a monopoly on security within certain more or less extensive boundaries, depending on their number and strength.

    And, this monopoly being, by its very nature, extraordinarily profitable, everywhere we see the races invested with the monopoly on security devoting themselves to bitter struggles, in order to add to the extent of their market, the number of their forced consumers, and hence the amount of their gains.

    War has been the necessary and inevitable consequence of the establishment of a monopoly on security.

    Another inevitable consequence has been that this monopoly has engendered all other monopolies.

    • p. 34-35
  • Everywhere, when societies originate, we see the strongest, most warlike races seizing the exclusive government of the society.  Everywhere we see these races seizing a monopoly on security within certain more or less extensive boundaries, depending on their number and strength.

    And, this monopoly being, by its very nature, extraordinarily profitable, everywhere we see the races invested with the monopoly on security devoting themselves to bitter struggles, in order to add to the extent of their market, the number of their forced consumers, and hence the amount of their gains.

    War has been the necessary and inevitable consequence of the establishment of a monopoly on security.

    Another inevitable consequence has been that this monopoly has engendered all other monopolies.

    • p. 34–35
The Divine Right of Kings and Majorities
  • If one takes the thought into one's head that the leaders of the people do not receive their inspirations directly from providence itself, that they obey purely human impulses, the prestige that surrounds them will disappear.  One will irreverently resist their sovereign decisions, as one resists anything man-made whose utility has not been clearly demonstrated.
    • p. 44-45
  • Because one fine day they took it into their heads to question and to reason, and in questioning, in reasoning, they discovered that their governors governed them no better than they, simpl[e] mortals out of communication with Providence, could have done themselves.

    It was free inquiry that demonetized the fiction of divine right, to the point where the subjects of monarchs or of aristocracies based on divine right obey them only insofar as they think it in their own self-interest to obey them.

    • p. 47
The Free Market for Security
  • This option the consumer retains of being able to buy security wherever he pleases brings about a constant emulation among all the producers, each producer striving to maintain or augment his clientele with the attraction of cheapness or of faster, more complete and better justice.

    If, on the contrary, the consumer is not free to buy security wherever he pleases, you forthwith see open up a large profession dedicated to arbitrariness and bad management.  Justice becomes slow and costly, the police vexatious, individual liberty is no longer respected, the price of security is abusively inflated and inequitably apportioned, according to the power and influence of this or that class of consumers.  The protectors engage in bitter struggles to wrest customers from one another.  In a word, all the abuses inherent in monopoly or in communism crop up.

    • p. 57-59
  • A careful examination of the facts will decide the problem of government more and more in favor of liberty, just as it does all other economic problems.  We are convinced, so far as we are concerned, that one day societies will be established to agitate for the freedom of government, as they have already been established on behalf of the freedom of commerce.

    And we do not hesitate to add that after this reform has been achieved, and all artificial obstacles to the free action of the natural laws that govern the economic world have disappeared, the situation of the various members of society will become the best possible.

    • p. 60-61

Quotes about Gustave de Molinari

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The most "extreme" and consistent, as well as the longest-lived and most prolific of the French laissez-faire economists was the Belgian-born Gustave de Molinari (1819–1912)."
~ Murray Rothbard
M. de Molinari believed that the writer's task is to spare the reader any effort, by giving him a task already completed.
M. de Molinari belonged to what philanthropists and sentimental socialists call the "stern" school, as though science could have any other purpose than that of seeking after truth.  As a man he was tender-hearted.
M. de Molinari had but one preoccupation: the pursuit of truth.  He never subordinated truth to considerations of success.  He never upheld an opinion for-the sake of pleasing such or such a person.
M. de Molinari was, above all, an economist, and he made everything converge toward economic questions.  Liberty and property, he said, are related to the economic phenomena of value.  Value is the object of liberty and the substance of property.  […]  He knew how to find impressive and profound formulae which grafted themselves on one's memory, as, for instance, "An interest can only be vanquished by a stronger interest."
  • Yves Guyot, "Orbituary", The Economic Journal, Vol. 22, No. 85 (Mar., 1912).
  • Only his early death had prevented Frédéric Bastiat from writing a treatise on “social harmonies” — as a follow-up work on his Economic Harmonies (1850). But his follower Gustave de Molinari published a great number of monographs dealing with virtually all of the contemporary social and political problems of France, as well as with fundamental problems of social interpretation and with the sociology of religion. His writings had a decisive impact on one of the greatest champions of the new marginal-utility approach. The Italian economist Vilfredo Pareto was a disciple of Léon Walras and a great admirer of Gustave de Molinari. Right from his first systematic exposition of economic science in Cours d'Economie Politique (1896), Pareto applied Walrasian techniques of analysis to Molinarian themes. He applied marginal-utility theory and the theory of general equilibrium to explain spoliation, aristocracy and the circulation of elites, economic interests and class struggle, and the relationship between doctrines and social science.
  • The dean of the laissez-faire French economists in the last decades of the nineteenth century and virtually until his death in 1911 was the Belgian-born Gustave de Molinari. Molinari is most famous for his doctrine of “competing governments” — he has been called “the first anarcho-capitalist” — and while he allegedly modified his position in later years, there is no doubt that he was always an unbending advocate of laissez-faire.
    • Ralph Raico (2012), Classical Liberalism and the Austrian School, p. 238
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