From the Firm to Economic Integration
New Thinking in Political Economy series
Chapter 1: The firm in a free society: following Frédéric Bastiat’s insights
Frédéric Bastiat did not devote much attention to the problem of the firm, so taking an interest in his thoughts on the topic could seem strange. Yet, the foundations for a realistic theory of the firm (and, more generally, of the distribution of human activities) are found in Chapter 14, “Wages,” of Bastiat’s classic book Economic Harmonies (1863). Further, the way used by Bastiat to lay the foundations of his analysis are both original and profound. In the present chapter, I will review Bastiat’s approach, develop it more fully, and draw some practical and theoretical conclusions about the nature of the firm.