“By virtue of exchange, one man’s prosperity is beneficial to all others.”…Frédéric Bastiat.
It remains one of the most powerful metaphors in economics. In 1850 Frédéric Bastiat gave the world the story of the broken window. The son of a shopkeeper accidentally breaks a pane of glass in the shop. A crowd gathers at the scene. Pretty soon, the onlookers jump to the conclusion that it’s an ill wind that blows nobody any good. Admittedly, the shopkeeper is out of pocket by the cost of a window. But the glazier just summoned will reap the benefit. Where would poor glaziers be in a world without broken windows ? Imagine all the good uses to which the glazier can put his new-found windfall from repairing the damage. Think what he could buy. All that new money circulating through the economy. Perhaps we might all be better off if more windows got broken on a regular basis ?
“Stop there !” cries Bastiat, addressing the crowd directly.
“Your theory is confined to that which is seen; it takes no account of that which is not seen.”
Hence the title of Bastiat’s essay: ‘That which is seen, and that which is not seen’.
The six francs paid to the glazier for effecting his repairs are what is seen. The crowd can speculate to its heart’s content to what luxurious end those francs might be expended. But what is not seen is what the shopkeeper might have done with those six francs if he had not had to pay them to the glazier in the first instance. He would, perhaps, have bought some new shoes, or a book for his library.
“To break, to spoil, to waste, is not to encourage national labour; or, more briefly, destruction is not profit.”
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