That Which is Seen, and That Which is Not Seen: Chapter 1, The Broken Window

in #economics7 years ago (edited)

Bastiat

1. The Broken Window

Have you ever witnessed the anger of the good shopkeeper, James B., when his careless son happened to break a square of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation — "It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?"

Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.

Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier's trade — that it encourages that trade to the amount of six francs — I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, "Stop there! your theory is confined to that which is seen; it takes no account of that which is not seen."

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.

Let us take a view of industry in general, as affected by this circumstance. The window being broken, the glazier's trade is encouraged to the amount of six francs; this is that which is seen. If the window had not been broken, the shoemaker's trade (or some other) would have been encouraged to the amount of six francs; this is that which is not seen.

And if that which is not seen is taken into consideration, because it is a negative fact, as well as that which is seen, because it is a positive fact, it will be understood that neither industry in general, nor the sum total of national labour, is affected, whether windows are broken or not.

Now let us consider James B. himself. In the former supposition, that of the window being broken, he spends six francs, and has neither more nor less than he had before, the enjoyment of a window.

In the second, where we suppose the window not to have been broken, he would have spent six francs on shoes, and would have had at the same time the enjoyment of a pair of shoes and of a window.

Now, as James B. forms a part of society, we must come to the conclusion, that, taking it altogether, and making an estimate of its enjoyments and its labours, it has lost the value of the broken window.

When we arrive at this unexpected conclusion: "Society loses the value of things which are uselessly destroyed;" and we must assent to a maxim which will make the hair of protectionists stand on end — To break, to spoil, to waste, is not to encourage national labour; or, more briefly, "destruction is not profit."

What will you say, Monsieur Industriel -- what will you say, disciples of good M. F. Chamans, who has calculated with so much precision how much trade would gain by the burning of Paris, from the number of houses it would be necessary to rebuild?

I am sorry to disturb these ingenious calculations, as far as their spirit has been introduced into our legislation; but I beg him to begin them again, by taking into the account that which is not seen, and placing it alongside of that which is seen. The reader must take care to remember that there are not two persons only, but three concerned in the little scene which I have submitted to his attention. One of them, James B., represents the consumer, reduced, by an act of destruction, to one enjoyment instead of two. Another under the title of the glazier, shows us the producer, whose trade is encouraged by the accident. The third is the shoemaker (or some other tradesman), whose labour suffers proportionably by the same cause. It is this third person who is always kept in the shade, and who, personating that which is not seen, is a necessary element of the problem. It is he who shows us how absurd it is to think we see a profit in an act of destruction. It is he who will soon teach us that it is not less absurd to see a profit in a restriction, which is, after all, nothing else than a partial destruction. Therefore, if you will only go to the root of all the arguments which are adduced in its favour, all you will find will be the paraphrase of this vulgar saying — What would become of the glaziers, if nobody ever broke windows?


Image credit
Source page
Series Introduction


SteemVerify

If you like this post, please comment, follow, and resteem!

Sort:  

Payout declined, since this is a copy of public domain material rather than original content. If you would like to support this project, please upvote this comment as well as the post.

What would become of the glaziers, if nobody ever broke windows?

What would happen to defense contractors , if nobody ever went to war? Or the Private Prison Industry, if everything wasn't illegal?

Those seem to be 2 big economic industries right now, that are consuming capital and preventing monsieur James B. from buying a new pair of shoes.

I hesitate to call every government expenditure as the same type of broken window though.

Surely there must be something.

Wait for the following chapters. You may be surprised.

Everything the government does is built on this same argument where government openly spends money on X, while covering up the cost to those who were taxed to fund X. And every government project is a monopoly with all the attendant waste and abuse that goes along with all monopolies multiplied by the economic calculation problem as discussed by Ludwig von Mises and others in the Austrian School.

I actually looked up the broken window theory this last week for some reason. So, full disclosure, this is the second time I read it, I'm not usually this quick to grasp concepts. ;-)

Thanks for starting a great discussion that I'd never find anywhere else.

Well, I can't upvote you, but want to support your post. The conclusions of Bastiat, however, are so obvious and clearly supported that I am at a loss for words.

However, I am sure that there are those that do not presently have this same understanding, and I expect that your post will enable those folks to gain from it.

I thank you.

Also, resteemed.

Resteems and comments are appreciated. Even without financial reward, upvotes help the post gain visibility. If you want to upvote something financially too, I did add a comment for that purpose above. It is, of course, not mandatory.

"Cash for Clunkers" comes to mind. I upvoted despite the lack of payout because I hope many people read this. Thanks for the great post. I look forward to the subsequent chapters.

Wow. Never knew this existed. I won't lie I had to read it a couple of times. Looks like I have a lot more reading to do.

I was actually linked to this in a comment in one of my posts here from @theblindsquirl who has also commented here in your post.

My post is about the history of the Society of the Cincinnati which formed in 1783. They were/are a military hereditary group made up of, among others, 23 signers of the Constitution. They were accused at the time of being a shadow government.

I shall follow for more of this series and I'll do some read up on Bastiat as well. Thanks for sharing this on Steemit.

@fortified

Coin Marketplace

STEEM 0.18
TRX 0.15
JST 0.029
BTC 63837.42
ETH 2539.78
USDT 1.00
SBD 2.65