Bastiat's Argument
In Bastiat's essay “That Which is
Seen and That Which is Unseen”, he discusses economics and economic
fallacies. A summary of his argument follows.
Basically, he says that in economics,
there are the effects of the actions of an individual that everyone
sees, and these might be apparently good or bad. For instance in his
broken window fallacy, he says that the man whose window is broken
will be a benefit to society because he will have to buy a new window
and that will give somebody somewhere the job of replacing the window
and it will put his money into the system.
The part which is unseen, though, is
that the man ultimately loses an opportunity because the wealth that
he now has to spend on replacing his window could have been spent on
something else that the man wanted or needed and the person who would
have sold him this product is the ultimate loser, as he can no longer
sell his product to the man.
In accordance with his title,
Bastiat's essay was critical of those who look only at that which can
be easily observed in economics and encourages people to look for the
winners and losers in the economy that are not so easily seen.
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