Bastiat’s Broken Window

An action produces a series of effects.  These effects can be divided up between the seen effects and the unseen effects.  The seen effects are immediate and visible.  The unseen effects are not visible.  The bad economist only views the seen effects.  The good economist will concern himself with both.  These unseen effects can be fatal, and will destroy society if they are ignored.  Evil hides in the unseen.

A shopkeeper’s son breaks a window.  Now, the shopkeeper must purchase a window.  This now provides a job for the glazier.  An outside observer might see this as beneficial, even the bad economist.  After all, a job has been created by the child breaking the window.  However, this is not the case.  These are only the seen effects.  What would the shopkeeper have spent the money on if he didn’t have to buy a new window?

The unseen effects are what the shopkeeper would have spent that money on.  Maybe he would’ve bought new shoes.  Now, the shoemaker is out of a job.  There was a job for the glazier, but there is no longer a job for the shoemaker.  No net jobs have been created.  A focus on the seen would lead many people to conclude that the child breaking the window was beneficial to society.

The shopkeeper just has a window.  He would have shoes and a window if the window had not been broken.  He is now worse off.  Not only does he have less, but society as a whole has less.  Destroying value isn’t a profit.  If you believe this, go beat your car with a sledgehammer.  Nobody will because it’s easy to see this won’t be good for you.  A good rule of thumb: what’s good for you is good for the economy, and what’s bad for you is bad for the economy.

Now, you are in position to imagine this scenario economy wide.  The state destroys at least one job for each one they claim to create.  They are focusing on the seen effects and ignoring the unseen effects.  This may very well be a deliberate error.  The statistics for the seen will be given so they can win a popularity contest.  Destruction is not good for the economy.  If the bad economists won’t identify the unseen, the masses can identify them.

Reference

Frédéric Bastiat; The Bastiat Collection

4 thoughts on “Bastiat’s Broken Window”

  1. This was a great! Most people only talk About the seen, that is why I like reading good economists because they always look At the unseen and the seen! The main reason I like reading Thomas Sowell is because he is so good at looking at the unseen consequences!

    1. Thank you! If you haven’t already, I recommend Applied Economics by Thomas Sowell. He specifically talks about thinking beyond stage one. In other words, the unseen.

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