The Seen and the Unseen by Frederic Bastiat

The Seen and the Unseen by Frederic Bastiat

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[His contributions to the economics literature have been sufficient for him to earn a place in Mark Blaug’s Great Economists before Keynes. Robert Heilbroner devotes a major portion of a chapter to Bastiat in his classic book The Worldly Philosophers, first published in 1953 and used in economics classrooms ever since. Rothbard devotes nine pages to Bastiat in volume two of his history of economic thought15 and credits Bastiat with refuting the Keynesian multiplier theory nearly 100 years before it was advanced by Keynes. Skousen spends seven pages discussing Bastiat in his history of economic thought. Schumpeter referred to him as a “brilliant economic journalist.” Haney devotes chapter 15 of his History of Economic Thought to Bastiat.
A number of authors have applied Bastiat’s theories and approaches to modern economic problems. Henry Hazlitt, an American economic journalist, used Bastiat’s approach to examine a number of economic theories and policies in his classic Economics in One Lesson. Dean Russell, an economist, also applied Bastiat’s theories and approaches to a wide range of economic issues. ~ECONOMIC PROTECTIONISM AND THE PHILOSOPHY OF FRÉDÉRIC BASTIAT by Robert W. McGee]

Frederic Bastiat: Have you ever had occasion to witness the fury of the honest burgess, Jacques Bonhomme, when his scapegrace son has broken a pane of glass? If you have, you cannot fail to have observed that all the bystanders, were there thirty of them, lay their heads together to offer the unfortunate proprietor this never-failing consolation, that there is good in every misfortune, and that such accidents give a fillip to trade. Everybody must live. If no windows were broken, what would become of the glaziers? Now, this formula of condolence contains a theory which it is proper to lay hold of in this very simple case, because it is exactly the same theory which unfortunately governs the greater part of our economic institutions.

Assuming that it becomes necessary to expend six francs in repairing the damage, if you mean to say that the accident brings in six francs to the glazier, and to that extent encourages his trade, I grant it fairly and frankly, and admit that you reason justly.

The glazier arrives, does his work, pockets the money, rubs his hands, and blesses the scapegrace son. That is what we see.

But, if by way of deduction, you come to conclude, as is too often done, that it is a good thing to break windows—that it makes money circulate—and that encouragement to trade in general is the result, I am obliged to cry, Halt! Your theory stops at what you see, and takes no account of what we don't see.

We don't see that since our burgess has been obliged to spend his six francs on one thing, he can no longer spend them on another.

We don't see that if he had not this pane to replace, he would have replaced, for example, his shoes, which are down, at the heels; or have placed a new book on his shelf. In short, he would have employed his six francs in a way in which he cannot now employ them. Let us see. then, how the account stands with trade in general. The pane being broken, the glazier's trade is benefited to the extent of six francs. That is what we see.

If the pane had not been broken, the shoemaker's or some other trade would have been encouraged to the same extent of six francs. This is what we don't see. And if we take into account what we don't see, which is a negative fact, as well as what we do see, which is a positive fact, we shall discover that trade in general, or the aggregate of national industry, has no interest, one way or another, whether windows are broken or not.

Let us see again how the account stands with Jacques Bonhomme. On the last hypothesis, that of the pane being broken, he spends six francs, and gets neither more nor less than he had before, namely, the use of a pane of glass. On the other hypothesis, namely, that the accident had not happened, he would have expended six francs on shoes, and would have had the enjoyment both of the shoes and the pane of glass.

Now, as the good burgess, Jacques Bonhomme, constitutes a fraction of society at large, we are forced to conclude that society, taken in the aggregate, and after all accounts of labor and enjoyment have been squared, has lost the value of the pane of glass which has been broken.

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