By S.D. Plissken | November 10, 2018
The nineteenth-century French economist Frédéric Bastiat (1801-1850) revealed to us the important distinction that must be made between That Which Is Seen and That Which Is Not Seen.
He began his argument with his now-famous “Parable” of the Broken Window. A boy breaks a window accidently. Onlookers console the father by observing that the glazier benefits by six francs in replacing the window, which he will spend with some other tradesman, who will spend it with someone else again. The boy’s mistake has benefitted the economy to the amount of six francs. That is what is seen: six francs has been set in motion to benefit the economy and society, as represented by a succession of tradesmen, merchants and others along its way.
Bastiat points out that what is just as important, if not more so, is that which is not seen. Had the window not been broken, or wasted, the father might have spent the money on something else, something of his own choosing, such as a book or a new pair of shoes. That would have benefitted the economy too, but along a different path.
The father’s choice and that potential different path are not the only difference. The destruction of the window, or any waste of resources, is a net loss to the society. If the father did not have to replace the window, he would have had the enjoyment of both the window and the book. As it happened, he paid twice for the window alone.
Bastiat goes on to apply this principle of things that are seen and not seen to taxes, maintenance of standing armies, publicly-funded arts, public works projects, and the support of bureaucracies in general. In each case, there is some obvious visible benefit or, at least, some visible partial benefit. (Those that exact the taxes, organize the armies, and administer publicly-funded arts, public works, and services, subtract their own carrying charges along the way). Those visible partial benefits are the things that are seen.
The things that are not seen cannot be known. They are what society loses. There might already have been a cure for cancer, an end to hunger and homelessness, shorter work weeks, sounder money, hover cars, everlasting gobstoppers, and a myriad of other benefits. Milton restaurants. Who can know?
We would almost certainly be living better lives in a better world than that which can be seen around us.
Our load would be lighter to the extent of not carrying the dead weight of things that bureaucracies choose for us. (A camel is a horse that was designed by a committee). We would certainly be enjoying more of our own preferences, which is in itself an essential element of a better life.
Modern economists express this same concept in terms of paying an Opportunity Cost. If you choose Option A, you cannot also choose mutually-exclusive Option B. Not having Option B is the opportunity cost that you pay for selecting Option A. And vice versa. It is expressed also in the adage “You cannot have your cake and eat it too.”
You may see the same idea deployed in the beloved Christmas movie It’s a Wonderful Life. Had George Bailey never existed – if he had remained unseen – then he could not have influenced events towards the satisfying life of Bedford Falls. The hapless residents would have been forced to live instead the less palatable existence to be seen in Potterville. (Back to the Future “reboots” the same theme).
It is well worth a read (below). You might enjoy also Bastiat’s devastatingly funny satire of protectionism: the Candlemakers’ Petition.
References:
Bastiat, Frédéric. (1850). That Which Is Seen, and That Which Is Not Seen. Retrieved from en.wikisource.org/wiki/Essays_on_Political_Economy/That_Which_Is_Seen,_and_That_Which_Is_Not_Seen
Wikipedia. (2018, November 4). Frédéric Bastiat. Retrieved from en.wikipedia.org/wiki/Frédéric_Bastiat
YouTube. (2016, January 30). I Call This Enemy: The Sun (The Simpsons) [a spoof of the Candlemakers’ Petition]. Retrieved from www.youtube.com/watch?v=L3LbxDZRgA4
Milton Observer 