Broken windows at the former pumping station in Trowse, Norfolk. Bastiat’s famous parable illustrates the problems raised when Governments try to boost the economy with taxpayer-funded works. There is undoubtedly a boost to some specific industry or location; but elsewhere across the country there will be corresponding shortfalls in other sectors, for the simple reason that money spent on X can no longer be spent on Y. Unless the project is key to the economic life of the whole country a favoured band of contractors and local businesses will profit at the expense of everyone else.
Introduction
So long as it makes work for the working man to do, almost any initiative will have its champions. A superfluous rail upgrade, a local government vanity project, even burglary or a war, we are reconciled to them on the grounds that ultimately they create jobs and get the economy moving. Yet as Frédéric Bastiat explained back in 1850, the thought may be comforting but it isn’t really true.
HAVE you ever witnessed the anger of the good shopkeeper, James B., when his careless son happened to break a square of glass? You will most assuredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation — “It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?”
Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.
Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier’s trade — that it encourages that trade to the amount of six francs — I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.
Précis
French economist Frédéric Bastiat is credited with giving the first exposition of the ‘broken window fallacy’. Imagine a shopkeeper who finds one his windows broken. He spends six francs on a replacement, which is good news for some local glazier; and is it not also good news, many people (even high up in government) will ask, for the local economy? (60 / 60 words)
French economist Frédéric Bastiat is credited with giving the first exposition of the ‘broken window fallacy’. Imagine a shopkeeper who finds one his windows broken. He spends six francs on a replacement, which is good news for some local glazier; and is it not also good news, many people (even high up in government) will ask, for the local economy?
Variations: 1.increase the length of this precis to exactly 65 words. 2.reduce the length of this precis to exactly 55 words. 3.introduce one of the following words into the precis: although, if, may, must, ought, since, unless, whether.
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