Abstract

into complex society and experienced tremendous economic development and high cultural achievement through the use of money. It has foundered or even been destroyed when money has been undermined. Ignorance of the nature of money should therefore be the central economic issue for society. Frédéric Bastiat was a French businessman who lived during the first half of the nineteenth century (1801–1850). In the last few years of his life he was elected to the national assembly and began a prolific career as a writer on topics of economics, public policy, and political issues of the day. His highly effective writing style includes the use of humor, ridicule, dialogue, irony, exaggeration and, most important, logical deduction and the process of elimination. He is like a mystery sleuth in search of economic truth and this style has made him the undisputed champion in economic polemics. He continues to earn high praise from journalists, economists, and most important, from educated readers more than 150 years after his death.1 In contrast to the universal respect and admiration for his literary skills, Bastiat has not been admired as an economic theorist. His efforts at economic theory have been roundly criticized and characterized as the efforts of an amateur or even a crank. We can list the eminent economist Joseph Schumpeter and Nobel Laureate F.A. Hayek, two outstanding economists, among the critics of Bastiat as an economic theorist. I have re-examined Bastiat’s contributions to economic theory and have found the charges against him to be unsubstantiated. In terms of economic theory, Bastiat is widely knowledgeable, keenly discerning, highly competent, and very creative. Furthermore, I have concluded that the central criticisms of..