Parable of the Broken Window: Frédéric Bastiat

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Parable of the broken window: Frédéric Bastiat Frédéric Bastiat introduced what he called the parable of the broken window in his 1850 essay Ce qu'on voit et ce qu'on ne voit pas, which translates to That Which Is Seen and That Which Is Unseen. His purpose was to illustrate why destruction and the money spent to recover from that destruction, is actually not a net benefit at all to society. The parable is also known as the glazier’s fallacy, which demonstrates how opportunity costs, as well as unintended consequences affect economic activity in ways that are ignored. The idea of economic impact is illustrated by a simple story of a shopkeeper; the man has a son who accidentally breaks a pane of glass and has to pay to get it replaced. In this story, it costs six francs to replace the window and the glazier receives six francs as payment for the workmanship. The idea that arises is that it is a positive to go around “breaking windows” to create jobs and circulate money flow, but in essence there is no real net benefit to restoring that of which was broken back to its original state. The shopkeeper could have spent his six francs elsewhere, such as buying new shoes or supplies for his shop, which in turn would stimulate the economy, creating a true net benefit. This accident has prevented him from spending his six francs elsewhere. Next Bastiat applies the parable of the broken window in a different way. Suppose it was discovered that the shopkeepers son was actually hired by the glazier, and paid a franc for every window he broke. Suddenly the same act would be regarded as theft: the glazier was breaking windows in order to force people to hire his services. Bastiat argues that people actually do endorse activities which are morally equivalent to the glazier hiring a boy to break windows for him; he does not merely look at the immediate but at the longer effects

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