Pardonnez-moi, Monsieur Bastiat
The Free Agent has been mulling over the elegant parable offered by M. Frederic Bastiat in “That Which is Seen and That which is Not Seen” in opposition to pointless destruction (and brilliantly, to trade barriers, “nothing else than a partial destruction”). The story is this: A shopkeeper’s son carelessly breaks a pane of glass, which necessitates a call to the glazier, who repairs the window at a cost of six francs. The stupefied masses who often appear in such stories, see only the immediate prosperity for the glazier, conditioned as they are by a popular axiom, “what would become of the glaziers if nobody ever broke windows?” (Had The Free Agent been among the throng, the world might have seen beautifully etched, triple-paned thermal windows a century and a half sooner.) They see the six franc benefit to the glazier, what they have not seen is the benefit to whoever the shopkeeper would have given the money if he’d had a choice, say, to the cobbler. Bastiat’s genius was to add the negative one to one, to show that the net gain to society was zero, that the glazier prospers only at someone else’s expense.
The Free Agent pauses and tugs at her ear a bit at this point. Can not the glazier take his winnings and shod himself as the shopkeeper would have liked to have done? The shoes may be on the wrong feet, but the six francs has not disappeared, it seems that M. Bastiat has given up the chase too soon. Bastiat’s sympathy is with the unseen cobbler, but The Free Agent feels it belongs back with the shopkeeper. (Let us ignore, as Bastiat does, the fact that the shopkeeper’s own clumsy son has broken the window, because the point of the parable is that the citizens come to believe that mere destruction of property, because it must be replaced, is the same as economic growth. You may substitute the name of any number of shops in Brooklyn’s Atlantic Yards area if that’s helpful.)
What has really happened for the shopkeeper is that a portion of his labor which could have improved his quality of life (consumption) or been invested, goes instead to merely maintaining what he has. Is there a name for this category of expense, which includes things like insurance premiums, security services, and sweeping the shopkeeper’s chimney? There ought to be. In government budgets, it includes national defense, police, road maintenance, and all the make-work programs which funnel money from productive shopkeepers and cobblers to unproductive glaziers.
The Free Agent would be very interested to see a comparison across country lines of this dead-weight household maintenance expense, she suspects it would be useful both as a reflection of the efficacy of rule of law in various countries, and as a budgeting tool, because one does want to protect certain assets even at the expense of an insurance premium. Get on that, someone, before The Free Agent starts throwing rocks.