Frédéric Bastiat (1801-1850) is rightly celebrated for his still-unmatched skill at conveying key economic insights to the general public with clarity and wit. Among his most famous and effective efforts along these lines is his 1850 pamphlet “Ce qu’on voit et ce qu’on ne voit pas” – “What we see and what we don’t see,” or popularly translated into English as “What Is Seen and What Is Not Seen.” Government policy would be vastly improved if more well-meaning people and politicians were to read this brilliant, not very lengthy, work.
The core idea of “What Is Seen and What Is Not Seen” is that when people ponder the merits and demerits of economic actions, or of government interventions, they too often are blind to the bulk of the actions’ and interventions’ consequences. The opening paragraphs of the pamphlet sound the theme clearly:
In the sphere of economics an action, a habit, an institution or a law engenders not just one effect but a series of effects. Of these effects only the first is immediate; it is revealed simultaneously with its cause, it is seen. The others merely occur successively, they are not seen; we are lucky if we foresee them.
The entire difference between a bad and a good Economist is apparent here. A bad one relies on the visible effect while the good one takes account both of the effect one can see and of those one must foresee.
However, the difference between these is huge, for it almost always happens that when the immediate consequence is favorable the later consequences are disastrous, and vice versa. From which it follows that a bad Economist will pursue a small current benefit that is followed by a large disadvantage in the future, while a true Economist will pursue a large benefit in the future at the risk of suffering a small disadvantage immediately.
The fact cannot be seriously denied. Economic actions and government interventions generate significant consequences that people (and, hence, politicians) ignore. Nor can it be denied that this ignorance of unseen consequences promotes bad government policies. Well-meaning people who fail to see the full array of interventions’ consequences often call for government actions that they would not call for if they “saw” more of the consequences, while cunning and venal people callously exploit their fellow citizens by seizing upon well-meaning people’s blindness to unseen consequences.
From pointing out the unseen harms inflicted on nearly all consumers (and on most workers) by tariffs, through tracing out the largely detrimental results of excessive money creation and deficit financing of government budgets, no duty of the economist is as important as identifying consequences that are, until then, unseen, and revealing these to the public.
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 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 see consumers 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?
One possible answer is that people take for granted that each cause has only one or two effects, thus rendering pointless any thought about further consequences of the likes of a broken window beyond noting its effect on the merchant supplying the replacement. But this possibility seems unlikely. We all agree when we’re reminded that the road to hell is often paved with good intentions, and in our personal lives our very survival requires that each of us regularly account for consequences well beyond the ones that first occur.
People have short attention spans for matters beyond those that immediately affect them personally or over which they have no personal control. On matters of public policy, therefore, people are attentive enough to infer that a shopkeeper whose window is broken will likely replace it and that the merchant from whom the shopkeeper purchases the replacement window is made better off. But after reaching this inference, people get bored and ponder the matter no further.
There is no clear explanation for why many people regularly and expertly use their reason to “see” and infer some economic consequences, but have great difficulty using these same powers of reason to “see” other consequences that are no less real or important than are the consequences that they do “see.” Whatever the correct explanation, pinning it down might provide a constructive clue to help those of us who use the economic way of thinking to better make the case against popular government interventions. The negative consequences today, as in Bastiat’s day, remain invisible to far too many people.
This article, A Reflection on Bastiat’s “What Is Seen and What Is Not Seen”, was originally published by the American Institute for Economic Research and appears here with permission. Please support their efforts.