Frédéric Bastiat
The broken window: follow the francs both ways
bastiat-broken-windowbastiat-opportunity-costbastiat-seen-unseenA town after a boy breaks the shopkeeper's window
Gold: the spending everyone sees. Blue dashed: the spending that would have happened if the window had not been broken. Same francs, same number of hops.
Try: play it with only "what is seen". The glazier earns, then the baker, then the innkeeper: it looks like the boy stimulated trade. Now switch to "show the unseen" and replay. Raise the re-spent share as high as you like: the total spending in both worlds is always equal, and the intact town always ends exactly 6 francs per window richer. Destruction moves spending around; it does not add to it.
Each dot is a job. Left: the private economy. Right: the public works site
Try: at reveal 0% the bridge is pure gain: 40 jobs out of nowhere. Drag the reveal slider: the same francs were taken from taxpayers, who would have spent them on shoes, bread and repairs. The jobs question is a wash (worse with collection costs); the real question is whether the bridge is worth more than what the taxpayers gave up. Push "bridge worth / cost" above 1.25× and the project passes the test.
The candlemakers' petition: block the sun
bastiat-candlemakers-petitionbastiat-reductiobastiat-wealth-not-workOne household, 16 hours of light a day, 100 francs of income
Try: close the shutters to 100%. The candle trade booms (8 → 32 francs) and the petitioners can point to every new job. But the household works just as many hours and ends up with the same light and far fewer other goods. The sun's gift was free; replacing it with labor is a loss, however many people it employs.
Legal plunder: when everyone lives at the expense of everyone
bastiat-legal-plunderbastiat-the-statebastiat-the-lawTwelve groups, one treasury (click a group to toggle its lobbying)
Each lobbying group receives 10 from the treasury and pays its lobbying cost. Every group, lobbying or not, pays an equal share of the taxes needed to fund all transfers plus the overhead. Solid ring = lobbying.
Try: click one group. It gains about +7 at everyone else's small expense, so every other group has the same reason to lobby. Press "Let each group decide": one by one they all join, and when all twelve lobby everyone receives 10, pays 13 in taxes plus the lobbying cost, and ends worse off than when nobody lobbied. Then switch the law to "only protects rights".
Paris to Madrid (click a town to force a break of the line there)
As more towns demand their break
Try: press "Only Bordeaux". Bordeaux's porters and innkeepers gain 4,440 a day, a real, visible benefit, and the cost is spread over every shipper. But every town can make the same argument: press "Every town's logic". The line is now a string of breaks, freight costs 56 fr/t instead of 20, traffic collapses, and each town's porters earn less than Bordeaux did alone. A railway with a break everywhere is a negative railroad.
A Chinese tale: a tariff is a road made worse on purpose
bastiat-chinese-talebastiat-protectionismbastiat-consumer-viewForeign mill → canal → customs house → home market
Home market for iron (drag the gold price line)
Gold box = tariff revenue (a transfer). Red triangles = deadweight loss: iron made at home at more than it costs abroad, and iron no longer bought at all.
Try: on the old road, the home price is 39. Switch to the canal: price falls to 24, imports grow, everyone celebrates the Emperor. Now drag the tariff up by 15: the home price is back to what the old road gave. The tariff is the road, rebuilt by decree, except that the obstacle's cost is now collected rather than spent on mules.
30 people: farmers (bread) and weavers (cloth), with different tastes
Bar = each person's well-being relative to their starting point. F = farmer, W = weaver.
Try: run voluntary exchange. Nothing new is produced (total goods stay constant), yet total well-being climbs, and the count of people worse off stays at zero, because a trade happens only when both sides prefer what they get. Then switch to plunder: the strong take from the weak, a third is lost in the struggle, goods shrink, and many people end up worse off.
- takeawayCount the unseen. Destruction, make-work and spending financed by taxes redirect activity rather than add to it. The question is never "how many jobs?" but "what did we get, compared with what else those resources would have produced?"
- takeawayProtection is an obstacle. Blocking the sun, breaking a railway and adding a tariff all make goods cost more labor. They create visible work for a few and a dispersed, larger loss for everyone who buys.
- takeawayWhen the law can be used to take, every group has a reason to grab, and all of them together end up worse off. Bastiat's remedy was a law limited to protecting person, liberty and property, which leaves voluntary exchange, where both sides gain, to do the rest.
Key concepts · 17
Frédéric Bastiat- What is seen and what is not seen
Every act or law has an immediate, visible effect and a train of later, dispersed effects that nobody sees.
The bad economist stops at the visible effect; the good one also counts what would have happened otherwise. Most economic sophisms come from forgetting the unseen alternative.
What Is Seen and What Is Not Seen (1850)
↑ see it in the visualization - Broken window fallacy
The belief that destruction is good for the economy because repairing it creates work.
The glazier's gain is seen; the shoes the owner would have bought instead are not. Spending is only redirected, and society is poorer by one window.
What Is Seen and What Is Not Seen (1850)
Claims that wars or hurricanes boost GDPCash-for-clunkers (2009) scrapping working cars↑ see it in the visualization - Opportunity cost (the unseen alternative)
The real cost of any use of resources is the best alternative given up.
Bastiat's unseen is opportunity cost before the term existed: the francs spent on a window are francs not spent on shoes.
What Is Seen and What Is Not Seen (1850)
↑ see it in the visualization - Public works and the jobs argument
Defending state spending by the jobs it visibly creates, ignoring the jobs lost where the taxes came from.
Taxes paid for the project are spending taxpayers no longer do, so the job count is roughly a wash. A project must be justified by its usefulness, not its employment.
What Is Seen and What Is Not Seen (1850)
National Workshops, Paris 1848"Shovel-ready" stimulus debates (2009)↑ see it in the visualization - The candlemakers' petition
A satirical petition asking parliament to block out the sun to protect makers of candles from unfair foreign competition.
It takes protectionist logic to its conclusion: if cheap imports are harmful because they are cheap, free sunlight is the worst competitor of all. Jobs rise; wealth falls.
Economic Sophisms (1845)
↑ see it in the visualization - Reductio ad absurdum as method
Refuting a sophism by applying its own principle consistently until the absurdity shows.
Bastiat's satires (the candlemakers, the negative railroad, the right hand vs. the left) work because the arguments they mock were really made in the Chamber.
Economic Sophisms (1845–1848)
↑ see it in the visualization - Wealth, not work, is the goal
Effort is a cost; what people want is the result. A policy that makes more work for the same result makes us poorer.
Bastiat called the worship of effort "Sisyphism". Measuring success by jobs rather than by goods produced inverts means and ends.
Economic Sophisms (1845)
↑ see it in the visualization - The consumer's point of view
Judge economic policy by its effect on people as consumers, since everyone consumes and production exists to serve consumption.
Producers lobby for scarcity of what they sell; consumers want abundance. Since the consumer interest is everyone's interest, it is the general interest.
Economic Harmonies (1850)
↑ see it in the visualization - Legal plunder
Using the law to take from some what belongs to them and give it to others to whom it does not belong.
The test: does the law do for one citizen what he could not do himself without committing a crime? Tariffs, subsidies and privileges all pass this test of plunder.
The Law (1850)
Corn Laws (Britain, to 1846)US sugar quotasAgricultural subsidies↑ see it in the visualization - The State as the great fiction
"The State is the great fiction through which everyone endeavors to live at the expense of everyone else."
When every group expects the state to give, everyone lobbies, everyone pays, and the overhead makes the total negative: a prisoner's dilemma among interest groups.
The State (1848)
↑ see it in the visualization - The law as collective self-defense
Law is the organized extension of each person's right to defend their life, liberty and property.
Since an individual may use force only to defend these, the law may legitimately do no more. A law that goes further perverts its own purpose.
The Law (1850)
↑ see it in the visualization - Confusing government with society
The error of assuming that opposing a state-run activity means opposing the activity itself.
"We object to state education; then they say we are opposed to any education." Rejecting compulsion is not rejecting the goal.
The Law (1850)
- The negative railroad
A satire on demands to break a rail line at Bordeaux so local porters and innkeepers profit from transshipment.
If one break enriches one town, a break at every town should enrich them all, which would turn a railway into a string of obstacles. Local seen gains add up to a general loss.
Economic Sophisms (1848)
↑ see it in the visualization - A Chinese tale: tariffs as obstacles
A parable of an emperor who digs canals to cheapen trade, then is persuaded to fill them in to make more work for porters.
A tariff has the same effect on prices as a worse road. Nations spend fortunes reducing transport costs, then put them back at the border.
Economic Sophisms (1845–1848)
↑ see it in the visualization - Protectionism
Tariffs and quotas to shield domestic producers from cheaper foreign goods.
The protected industry's gain is visible; the higher prices paid by all buyers, and the industries those buyers would have supported, are not. The net is a deadweight loss.
Economic Sophisms (1845)
French tariffs of the 1840sSmoot–Hawley (1930)US steel tariffs (2002, 2018)↑ see it in the visualization - Economic harmonies
Bastiat's thesis that legitimate interests, pursued through voluntary exchange, are harmonious rather than antagonistic.
A free trade happens only if both sides gain, so exchange raises total well-being without making anyone worse off. Conflict comes from plunder, not from exchange.
Economic Harmonies (1850)
↑ see it in the visualization - Trade and peace
The idea that commerce binds nations by mutual interest and makes war costlier.
Bastiat campaigned with Cobden for free trade as a force for peace. The popular line "when goods don't cross borders, soldiers will" is attributed to him but does not appear in his writings; the sentiment, though, is his.
Letters and speeches, 1840s
Cobden–Chevalier Treaty (1860)