Unseen Economics

That Which is Seen and That Which is Not Seen
by Frédéric Bastiat, edited by Gary Furnell
Connor Court, 2024, 120 pages, $29.95

Why bother with an obscure French economist and essayist who wrote in the first half of the nineteenth century? I’ll come to it. But first to my use of the word obscure. After all, there are dozens of Bastiat societies around the world under the auspices of the American Institute for Economic Research. Still, I doubt Frédéric Bastiat appears in any Australian university undergraduate economics course. He certainly didn’t appear in mine. And, as I pointed out in an article I wrote on Bastiat’s economic insights in the September 2020 issue of Quadrant, he doesn’t appear in Mark Blaug’s Economic Theory in Retrospect, which is something of a bible on the history of economic thought.

Robert Hébert wrote in the 1987 edition of The New Palgrave: A Dictionary of Economics: “Generally, judgment on Bastiat has been that he made no original contributions to economic analysis.” And, damningly, the renowned Austrian-born economist Joseph Schumpeter declared that “Bastiat was not a bad theorist, he was simply no theorist at all.”

There you have it. Why then has Gary Furnell combined with Connor Court to bring out a new edition of Bastiat’s book That Which is Seen and That Which is Not Seen? The answer is simple. Those who have overlooked or dismissed Bastiat’s contribution to economic thought have not understood its relevance to public policy.

Essentially, leaving the commentariat aside, economics plays out in two separate arenas. One is in academia where arcane theories can flourish and, whether right or wrong, have no direct impact on the man or woman in the street. The second is in government where policies informed by wayward economic theories can do serious harm to the man or woman in the street.

Bastiat has no relevance for economic theorising. Schumpeter was right about that. However, his relevance for public policy has only grown since the 1840s, when he wrote most of his works. That is why this new edition of one of his most potent contributions to economic reasoning is timely. The more people read Bastiat, the more they will be able to see through the superficialities peddled by politicians and political parties and maybe—to be wildly optimistic—governments will be forced to address the widespread and downstream consequences of their policies.

Among other pursuits, Gary Furnell writes essays and short stories. He is secretary of the Australian Chesterton Society and wrote The Hardest Path is the Easiest: Exploring the Wisdom Literature with Pascal, Burke, Kierkegaard and Chesterton (2021). His introduction to this new edition of That Which is Seen adroitly sets the scene for Bastiat’s takedown of the sophisms of his day; some of which he explored in greater detail in other collections. For example, apropos property rights in Economic Harmonies and protectionism in Economic Sophisms.

Furnell includes an extract from Economic Sophisms, which he calls “Petition of the Candle-Makers”, as an entertaining example of Bastiat’s way of laying bare the costs and consequences of trade restrictions. In typically engaging and satirical style, Bastiat portrays those manufacturing various forms of artificial lighting as calling for a law to mandate the shutting out of sunlight from houses. This, they piously claim, will encourage employment in the production of all of those things which go to make artificial lighting. Stretched, do you think?

Listen to Chris Bowen explain how many renewable-energy jobs will be created by forcibly closing down coal-power stations and making it nearly impossible to develop new gas resources. Exactly what is the difference between the facts of today and Bastiat’s telling parable? Nothing of substance that I can spot.

Furnell also includes an essay by Bastiat on government. This is a well-chosen piece to complement the main fare—well-chosen because it too has lost none of its application. To wit, the utopian view that government can remedy all ills; the disconnect between demands on government and the preparedness to pay for them; and “the great fiction through which everybody endeavours to live at the expense of everybody else”.

I have not read all of Bastiat’s works. But it is fair to say that the main fare in That Which is Seen amply conveys most of Bastiat’s considerable wisdom. The translation used by Furnell is the 1874 translation by Scottish lawyer and economist Patrick James Stirling. Stirling figures prominently among those who translated Bastiat’s work.

Furnell has made some minor modernising changes to Stirling’s translation to make it easier to read. For example, he changes the word purveyors to suppliers and intermediates to intermediaries. He has also broken up some long paragraphs (the habit of the day) into shorter ones. Purists might want to keep to the original translation (I like the King James Bible), but good will be done if contemporary constructions ease the path for readers.

The first essay in That Which is Seen, “The Broken Window”, is the best-known and sets the scene for the remaining eleven. The son of a shopkeeper accidentally breaks a window. People tend to say consolingly that without broken windows glaziers would be out of work. But, as Bastiat points out, the six francs the shopkeeper paid the glazier would have been spent elsewhere to the benefit of others. To boot, the shopkeeper has forgone six francs without bettering his position and society as whole has employed valuable resources simply to stand still.

In “Frugality and Luxury”, two brothers share a rich inheritance. One spends lavishly and earns the praise of onlookers for benefiting workmen and merchants. The other spends prudently while giving part of his income to charities and saving the rest. The mistake the onlookers make is to suppose that what is not spent by the prudent brother is not spent at all. What is not seen is that others spend what is charitably given; and what is saved finds its way, perhaps through bankers, into spending on capital works.

All of the essays point to the importance of considering opportunity cost and value. Everything that is done employs resources that could be used elsewhere. Therefore the real cost of doing anything is not the money spent but the most productive alternative which has had to be forgone. But that is not the end of it. In “Public Works”, Bastiat considers the destruction of value when more is put in than comes out. When public works are commissioned simply to create employment: when “orders are given that the drains in the Champs-de-Mars be made and unmade”.

Bastiat was born before his time. He couldn’t have imagined how much worse things could get. Yet to come was Keynesianism and, coming up behind, the wellspring of unseen economic carnage and limitless waste, so-called climate change.

Since 1945 Keynesianism has caused all manner of economic and social ills which would have been prevented if Bastiat’s insights had held sway. As equally they would if John Stuart Mill’s economics, which prevailed during the second half of the nineteenth century and into the twentieth century, had not be overturned by the Keynesian heresy. That’s another story; but, nonetheless, I think Bastiat and Mill would have agreed on most things.

As to climate change, has there ever been such a misdirection of resources; such destruction of value? Not outside of wartime. Billions upon billions of taxpayers’ dollars directed to replace cheap and reliable sources of power with costly and intermittent sources of power. Billions splurged on pipedreams like the domestic manufacture of solar panels or the production of green hydrogen. Where are you, Bastiat? Where are you?

Connor Court and Gary Furnell, and I should mention Peter Fenwick who writes a foreword to the book, are serving the truth by republishing Bastiat’s clear-sighted commentaries. For, when all is said and done, Bastiat was searching for the truth in a world of misconceptions. He is a must-read.

The book is the second in a philosophically oriented series published by Connor Court. The first was George Mivart’s The Evolution of Evolution. The third will be on the work of Edmund Burke. Concordant with searching for the truth, all in the series sit within our Judeo-Christian heritage.

Peter Smith is a frequent contributor to Quadrant Online.