A Reflection of Bastiat’s Economic Harmonies
As much as the progressive statist left decries income and wealth inequality with their rants against capitalism and the “1 percent”, instead of branding them as socialists, commies, or in the tank for positive rights, let’s ask the honest question of why their said rants are misguided and anger misdirected. After having just read Economic Harmonies by the great Frederic Bastiat, his insight can show all of us a way of looking at utility in a light that poses serious questions for the whole concept of wealth inequality.
Seeing this chart that shows the near polar opposite of the anti-capitalist claims- although it is a hypothetical chart-, you may think that it is crackpot economics or just super idealistic albeit slightly possible. Regardless of what any of us think, I must admit that I thought at first that it couldn’t be true because wealth is heavily concentrated among a small percentage of the population; I now believe that I was wrong and am glad to have been enlightened. These claims are mostly viewed by the anti-capitalists through the lens of annual income and net worth and thus can only possibly be true in so far as what is accumulated and owned individually, one’s private property. According to Frederic Bastiat, in terms of wealth, we must measure not only personal wealth that one owns but common wealth, what becomes common to all through advances in intellectual and technological applications in production. This takes into account entirely the gratuitous utility that is part of real or absolute wealth, since said utility adds to our satisfactions. As Benjamin Franklin once said, “a penny saved is a penny earned”, and once you understand the concepts of onerous utility and gratuitous utility, you can appreciate this statement and the economic truth behind it much more wholesomely.
As mankind advances intellectually, technologically, economically and morally, he learns to harness the forces of nature to his benefit to work smarter, and not harder; to increase his productivity and therefore, serve his fellow man with more satisfactions that society can consume. It is all about increasing the ratio of gratuitous to onerous utility and decreasing the effort to produce or acquire any given unit of goods and service. This is the essence of economic growth.
Onerous utility is from the physical labor that man employs in satisfying his needs, wants, desires and tastes. An example would be utility from a carpenter’s labor, that of a farmhand or from the tractor operator on a farm. Gratuitous utility is that which we get from either Nature itself, i.e., the sunshine and rain that we need for produce to grow and to sustain life nevertheless, or the utility that we get from innovative capital created and employed to harness the forces of nature to mans benefit, decreasing his ratio of onerous to gratuitous utility. This is what increases output, productivity per worker, higher living standards for all, and ultimately more choices and lower prices for consumers. Some examples of this would be as simple as that which we get from the basic of designing a sailboat so that the wind will do some of the work in sea navigation, to the more complex automobile, the tractor, the crane and caterpillar, the washer and dryer, and yes even the kiosks employed in fast food restaurants; all of these are labor saving and output enhancing methods and machines of production.
Because man naturally has a desire to get more out of less, as this is the essence of self-interest, and if we are all honest, none of us who are rational and sentient beings would disagree, the accumulation of capital in society should be cheered and welcomed with open arms always. In the process of man seeking to reduce his onerous utility in relation to his gratuitous utility, he ends up increasing the gratuitous utility of others in their capacity as consumers. The tractor certainly did render many farmhands superfluous and obsolete, but the effects of increased output through capital accumulation means that more labor is freed up to pursue new, higher order talents that consumers demand the goods and services produced by. Also, with lower produce prices, those same consumers have not only more money to spend on other goods and services, or to save and invest, they collectively have benefited from the gratuitous utility offered by the tractor (as well as other methods) by the total savings from reduced prices on all produce bought. This is one of the effects of real (or effective) wealth increases: What once required more of any given man’s labor will now through advancements in the methods of production, require less of said labor, and as a result, increase the real wealth of a people because there are now more satisfactions that can be demanded with more output and purchasing power all the while with less effort. Because we can now consume each unit of produce for cheaper than before in terms of labor hours required to work to buy a unit, we are that much more the richer and Benjamin Franklin is more than validated!
This is what the anti-capitalists ignore entirely in regards to inequality, they only look at relative wealth, not absolute wealth. Bastiat compared and contrasted the concepts of effective (or real) wealth and relative wealth very eloquently. “Wealth, in fact, can be either real or relative. From the former point of view, it is reckoned according to our satisfactions. Mankind’s wealth is greater or less according to its level of prosperity, whatever may be the value of the objects that maintain it. But suppose we want to know each man’s individual share in the general prosperity, in other words, his relative wealth? This is a simple ratio, which value alone reveals, because value is itself a relative term.
Political economy is a science that concerns itself with men’s general prosperity and material comfort, with the ratio of their efforts to their satisfactions, a ratio that is improved by the increase in the amount of gratuitous utility available for the work of production. In political economy, therefore, we cannot exclude this factor from our idea of wealth. Scientifically speaking, real wealth is not to be found in the sum total of values, but in the sum of gratuitous utility or onerous utility contained in these values. From the point of view of our satisfactions, that is, as far as our real wealth is concerned, we are as much enriched by the value that we have lost through progress in the means of production as by the value that we still possess.
In the transactions of everyday life we no longer take utility into account, in so far as, through the decrease in value, it becomes free of charge. Why? Because what is free of charge is common to all, and what is a common possession has no effect on each person’s individual share of the total real wealth. No exchange is made of what is held by all in common; and since, in business transactions, we need to know only that proportion which is constituted by value, that is all we concern ourselves with.” 
All of this being said, I think we should take heed of what Bastiat expounded on so well in Economic Harmonies and ask the anti-capitalist crowd who continues to decry and clamor against capitalism, free markets and voluntary exchange, if they would be willing to give up the cheap produce given to us by the John Deere tractor and auto sprinklers which quench the thirst of endless acres of crops, the assembly line that enabled the mass production of automobiles, cranes employed in home/commercial construction, the washer and dryer that saves many hours a week, even at just a household level?
“Let us state as a conclusion, then, that we may give, and give legitimately, two meanings to the word “wealth”:
Effective Wealth, real wealth, which produces satisfactions, that is, the sum of the utilities that human labor, with Nature’s help, puts at society’s disposal.
Relative Wealth, that is, each individual’s share in the general wealth, which share is determined by value.
Here, then, is the harmonious law that can be expressed thus:
Through labor the action of man is combined with the action of Nature. From this co-operation results. Each individual takes from the general store of utility in proportion to the services that he renders-in the last analysis, then, in proportion to the utility he himself represents.” 
This analysis from Bastiat shows that the anti-capitalists are only concerned with relative wealth, but even if they started to take effective/real wealth into account, who can really be angry of the differences in intellect, faculties, foresight and willingness to take risks that lead to advancements not just for the owners and capitalists, but for all of humanity? What should we do to fairly distribute this “inequality” of talents and potential, does anyone in their right mind think it would be fair, even if it were medically possible, to do lobotomies on Apple or in general, Silicon Valley software engineers who help design iPhones, to transplant them towards someone who is limited intellectually speaking? I need not go into the details of the massive redistributions of wealth that are so passionately proposed and recommended by today’s anti-capitalists. The inherent violations of property rights and disruptions of the natural economic and social order need no further elaborations for the moment so go ahead and call me biased heavily in favor of property rights and the individual liberties that are so vital to the economic advancement of all.
In chapter one of the Harmonies, Bastiat so eloquently refers to whom he calls the “planners of artificial social order” because it is their desire to “remake the very physical and moral structure of man” because they believe that man’s individual/self interests are inherently antagonistic to the collective/general interests of society. It is no surprise that they believed this then because they still believe it today!!
“Finally, our social planners do not seem in the least concerned about the implementation of their program. How will they gain acceptance for their systems? How will they persuade all other men simultaneously to give up the basic motive for all their actions: the impulse to satisfy their wants and to avoid suffering? To do so it would be necessary, as Rousseau said, to change the moral and physical nature of man. …It also seemed to me that this analysis of the Social Contract was useful in showing what characterizes artificial social orders. Start with the idea that society is contrary to Nature; devise contrivances to which humanity can be subjected; lose sight of the fact that humanity has its motive force within itself; consider men as base raw materials; propose to impart to them movement and will, feeling and life; set oneself up apart, immeasurably above the human race-these are the common practices of the social planners. The plans differ; the planners are all alike.” 
I certainly agree with Bastiat that the natural social and economic order is most efficient, equitable and moral when private property rights and free exchange are upheld. Such an order aligns the interests of man and society together harmoniously, allowing for the continual transfer of onerous utility into gratuitous utility, growing the domain of common wealth from what was once more under the domain of private property, and raising the standard of living for all of mankind. I would like to think that these concepts help to put inequality into perspective. There will always be skeptics of the unfettered free market and individual liberty but I would recommend this reading to anyone who is one of them because if they are honest, after reading it they should not be as quick to brand capitalism as the root of the problem. This should be especially clear when considering that because we have a 104 year old central bank in the Federal Reserve, a 4 trillion dollar annual federal government , another couple of trillion with state and local governments, and are far from having genuine “free trade”, we do not have a genuine free market but rather one that has intervention that is too heavy handed and distorts the natural allocations of labor and capital. While we have still amassed the wealth and productivity levels that we do so blessedly have, this is all the more reason to desire and allow for as much of a free and unfettered natural social & economic order as possible, so that we can best align man’s interests with society’s.
 Russell, Dean. Intro to “Economic Harmonies” (Frederic Bastiat), p.xii, Foundation For Economic Education, 1996
 Bastiat, Frederic. “Economic Harmonies,” p. 27, Foundation for Economic Education, 1996
 Bastiat, Frederic. “Economic Sophisms”, p.157, Foundation for Economic Education, 1996
 Bastiat, Frederic. “Economic Harmonies”, p. 170, Foundation For Economic Education, 1996
 Bastiat, Frederic. “Economic Harmonies”, pp. 8, 17, Foundation for Economic Education, 1996