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A Reflection on Bastiat’s “What Is Seen and What Is Not Seen”

Even those economic phenomena that the great Bastiat identified as being “seen” are, in reality, nearly always not literally seen but, instead, are inferred – or so I argue in my latest column for AIER. A slice:

Yet for all of his unquestionable brilliance, Bastiat himself missed a reality that should be revealed. Bastiat’s oversight is hardly a major blunder. It’s barely a blemish. The insight of his essay continues to inspire and its relevance to radiate. Yet he did miss something that’s worth pointing out.

Specifically, Bastiat missed the fact that many of the consequences that he identifies as “that which is seen” are themselves often just as invisible as are the countless consequences that he identifies as “that which is unseen.” The great majority of the populace regularly and immediately “see” a small handful of invisible consequences while they miss most others.

Bastiat’s justly famous account of the broken window, given near the start of his famous essay begins:

Have you ever witnessed the fury of the good bourgeois Jacques Bonhomme when his dreadful son succeeded in breaking a window? If you have witnessed this sight, you will certainly have noted that all the onlookers, even if they were thirty in number, appeared to have agreed mutually to offer the unfortunate owner this uniform piece of consolation: “Good comes out of everything. Accidents like this keep production moving. Everyone has to live. What would happen to glaziers if no window panes were ever broken?”

Bastiat then correctly explains that not only is Monsieur Bonhomme made poorer by his son’s careless wreckage, contrary to the mistaken assurances of the onlookers, society at large is also made poorer.

Notice, however, that the effects that Bastiat identifies as the seen – namely, the benefits to glaziers and their suppliers from M. Bonhomme spending money to replace his broken window – are in fact not actually seen. The onlookers who assure M. Bonhomme that his son has inadvertently done society a favor by prompting him to buy a replacement window literally see only that a window has been broken. These onlookers don’t actually see a glazier purchasing the supplies, and putting in the work necessary to replace the window. The onlookers instead use their reason to infer, in this instance correctly, the positive effects of the broken window on the actions and welfare of the glazier and his suppliers.

Likewise with protective tariffs. When changes in tariff rates are being debated, well-meaning supporters of higher tariffs don’t actually seeconsumers responding to tariffs on imports by shifting more of their purchases to domestically produced substitutes. These tariff supporters use their reason to infer the correct conclusion that higher tariffs will artificially increase employment in those domestic industries that compete with the tariffed imports.

In short, the economic consequences that Bastiat identified as “the unseen” do not differ as much as we might suppose from the consequences that he identified as “the seen.” Both sets of consequences come to be “seen” only through human reason. And so the question becomes this: Why does human reason so readily reveal even to people untutored in economics some unseen but real consequences, while it routinely fails to reveal others?