What Bastiat Taught Me About Product Development – Religion & Liberty Daily

In technology, we distinguish between a protocol and an application. A protocol is the invisible, neutral infrastructure that lets millions of people coordinate without central permission. An application is what runs on top: the rich, varied, unplannable activity of actual users. In his 1850 essay The Law, Frédéric Bastiat argues that the legal system should be the former: a low-level protocol for human cooperation, not an application that tries to dictate what gets built on top of it. He warns of a fatal bug, which is when the law is hijacked to become a tool for “legal plunder.” As someone who builds products in emerging markets, I’ve come to read Bastiat not just as political theory but as a lesson in product development.

Least Privilege

The principle of least privilege is as true in lawmaking as it is in security engineering. Every component should be granted only the minimum permissions it needs to do its job, and nothing more, because every extra privilege is an attack surface, a thing that can be misused. Bastiat’s case for confining law to the protection of life, liberty, and property is the political version of exactly this. Law granted scope beyond defense doesn’t sit there harmlessly; it becomes the instrument of plunder. Excess authority is excess attack surface. Bastiat even gives us the audit procedure: “See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong.”

I watched this dynamic up close working on payments across Sub-Saharan Africa. The power to freeze a bank account exists for a narrow, defensive reason: to fight fraud, money laundering, and the financing of violence. But broad freezing authority with thin safeguards is simply an attack surface waiting to be used—and in late 2020, during Nigeria’s #EndSARS protests against police brutality, it was. The Central Bank of Nigeria obtained an ex parte court order, citing suspicious-transaction grounds, to freeze the accounts of peaceful- protest organizers and the groups crowdfunding for them. The machinery built to defend the financial system against criminals became the instrument for cutting off otherwise law-abiding citizens from their own money. The privilege had been scoped for financial crime; the moment it existed, it was available to be exercised against the very public it was meant to protect.

Closer to home, Brazil offered a quieter version of the same lesson. At the start of 2025, a new Receita Federal (Federal Revenue) rule sharply widened the reporting obligations on payment institutions, requiring fintechs to report Pix and credit card flows above modest monthly thresholds to the tax authority, extending a surveillance scope that had previously fallen mainly on traditional banks. The stated purpose was defensive: catch tax evasion. But the expanded reach was, again, attack surface: a much larger window into the everyday transactions of ordinary Brazilians, granted with little public scrutiny. (A wave of disinformation falsely claiming that Pix itself would be taxed muddied the debate, but the legitimate objection underneath it was about scope, not tax.)

The public recognized the over reach and the government reversed the rule within weeks. It’s the rare happy ending in this essay, and it’s also worth noticing why: The over privileged change was caught and rejected before it could be exercised, which is exactly what a good security review is supposed to do.

Interface Versus Implementation

Software engineers are trained to separate a system’s promise from its machinery. Think of a wall outlet: it promises electricity, and it makes no difference to your lamp which power plant generated it or which company runs the grid. The promise is what we call the “interface”; the machinery behind it is the “implementation.” The moment you confuse the two, the moment you decide your lamp needs that specific power plant, you can no longer think about what you actually need, only about one provider’s way of supplying it. Bastiat’s complaint is precisely this confusion, transposed to politics: People conflate a goal (society should be educated) with one specific implementation of it (the state runs the schools). “Education” is the interface; “state-run education” is just one implementation. A critic who says, “You oppose the implementation, therefore you oppose the interface” has made a category error, and Bastiat’s whole point is that his opponents counted on you not noticing. He says it himself:

Every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. … It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.

Financial inclusion is where I’ve watched this error play out most directly. The interface is simple: People can store and move money. For decades, development policy quietly collapsed that goal into a single implementation: a bank account at a bank branch. “Bank the unbanked” was the slogan, and the goal disappeared into the mechanism. When M-Pesa let Kenyans move money over a basic phone, the instinct of regulators worldwide was to insist it be governed as banking— to force the new implementation back into the only one anyone could picture. Kenya’s central bank declined, and the interface flourished in a form no one had specified in advance. Opposing the bank-branch implementation was never opposing financial inclusion; it was the precondition for achieving it.

None of this is an argument necessarily against public projects as opposed to private ones. The distinction Bastiat draws is about scope, not ownership, and the clear est proof sits in my own backyard. Brazil’s Pix, built by the central bank, outcompeted private payment rails on the merits precisely because it was designed as a protocol and not an application: It moves value between people and lets them decide what to do with it, rather than mandating how money should be used. A well-designed public protocol can win. A public application that tries to dictate the activity running on top of it is the failure mode, and the two are easily confused.

People Are Not Raw Material

Bastiat’s sharpest critique is of treating the public as a “passive mass” to be molded by enlightened design: a view in which, as he put it, “the relations between persons and the legislator appear to be the same as the relations between the clay and the potter.” This lands hard on anyone building products “for the underserved.” The dominant approach to poverty alleviation has long been top-down and push-based: Give people free food, clothing, and housing, and assume their lives will improve. But the designers were rarely systems thinkers, and they failed to anticipate how their interventions would interact with the markets people already depended on.

The pattern repeats. Free secondhand clothing, imported at scale over several decades, undercut and hollowed out domestic textile industries across Sub-Saharan Africa. In fact, the strain was severe enough that the East African Community moved to restrict used-clothing imports in 2016. Cheap subsidized food aid in mid century India depressed local prices and dampened the incentive to grow, undercutting the smallholder farmers it ran alongside. Free anti-malarial bed nets were widely repurposed as fishing nets (which was, revealingly, what many recipients actually needed), and their fine mesh swept up minnows and fish eggs, depleting the very fish stocks communities relied on. Each program was designed from above, and each violated the first rule of product development: Build what your customer actually wants, not what you’ve decided they should want.

The same error appears in reverse when the state stops pushing what it thinks people need and starts restricting what it thinks will hurt them. Nowhere is this more costly than in financial regulation, where paternalistic caps routinely price out the very people they’re written to protect, and this is the case I know best from the operator’s seat. In Brazil, to shield low-income retirees and pensioners from high interest rates, the National Social Security Council unilaterally cut the maximum rate banks could charge on payroll-deducted (consignado) loans for INSS beneficiaries. The intent was obvious and good; the result was not. Major banks found they could no longer cover their operating costs and risk at the new ceiling, and simply stopped offering the loans. Overnight, millions of elderly, lower-income Brazilians lost access to their cheapest source of emergency credit, and were pushed toward far costlier personal loans. The cap protected them from the one product that was actually working for them.

Chile produced the same sort of failure. When it tightened its consumer-loan rate ceiling (the Tasa Máxima Convencional) in 2013 to protect borrowers from high rates, lenders responded the only way the math allowed: They stopped extending credit to the riskier, lower-income borrowers they could no longer profitably price, pushing a meaningful share of exactly those households out of the formal market and toward the informal lenders the cap was meant to protect them from. The “protected” were protected straight out of the system. In both the Brazilian and Chilean cases the legislators protected a passive abstraction and ignored the real, resourceful person who, cut off from cheap credit, simply went looking for expensive credit instead.

The Discipline of Doing Less

Bastiat’s insight, translated for builders, is this: The best systems are the ones that do the least. A protocol that tries to anticipate and dictate every interaction running on top of it isn’t a protocol anymore: It’s an application masquerading as infrastructure, and it will be brittle, gamed, and captured exactly where it tries hardest to help. The law earns its power the way good infrastructure does, by being narrow. Its one job is justice: enforcing the boundaries of life, liberty, and property, and then getting out of the way so the messy, generative, unplannable activity of free people can run on top of it. As Bastiat put it: “And, in all sincerity, can anything more than the absence of plunder be required of the law?”

Every failure above is the same failure: a well-meaning team that confused the two layers, that mistook writing more rules for building a better society. The discipline Bastiat asks of the legislator is the one we ask of ourselves every time we resist the urge to over engineer: trust the edges, constrain the center, and remember that the most valuable things in any system are the ones you never had to design.

Good law, like good infrastructure, is judged not by how much it does but by how little it has to do.