What is Seen and What is Not Seen
by Frederic Bastiat
Government spending, we are told, stimulates the economy. By directing funds into the right sectors of the economy, the government can make it more efficient and effective. But not so, says Frederic Bastiat in this classic essay. Bastiat, in his trademark lucid and entertaining style, shows how government action has a ripple effect and that a policy’s success cannot be determined by only observing the immediately apparent impact. It is only by observing the “unseen” – the money removed from or denied to some parts of the economy so it can be given others – that the true impact of government action can be understood. Bastiat’s observations point to the ultimate truth that government cannot make society wealthier. It can only shuffle money around to where beaurocrats – and not the market – think it should go.
Praise for What is Seen and What is Not Seen
“No one has ever stated more clearly in a single phrase the central difficulty of a rational economic policy and, I would like to add, the decisive argument for economic freedom.” – F. A. Hayek, Nobel laureate
What to Read Next
This essay is included in this fantastic collection of Bastiat’s writings.
Bastiat begins his book with his “Parable of the Broken Window” in which he anticipates the important economic concept of opportunity cost. This has become one of Bastiat’s most well-known contributions to economics. The Parable of the Broken Window is brilliantly captured in the video below.