Town Rubbish

Reading over blogs, especially blogs on the state of our economy, there is a fare amount of reference to the "Broken Window Fallacy", by Frédéric Bastiat. It is a good example of what our government is doing. (ie Breaking windows to create jobs to fix them.)

Have you ever witnessed the anger of the good shopkeeper, James Goodfellow, when
his careless son happened to break a pane of glass? If you have been present
at such a scene, 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.
But if, on the other hand, you come to the conclusion, as is
too often the case, that it is a good thing to break windows, that it causes
money to circulate, and that the encouragement of industry in general will be
the result of it, you will oblige me to call out, "Stop there! Your theory
is confined to that which is seen; it takes no account of that which is not
seen."
It is not seen that as our shopkeeper has spent six francs upon one
thing, he cannot spend them upon another. It is not seen that if he had not had
a window to replace, he would, perhaps, have replaced his old shoes, or
added another book to his library. In short, he would have employed his six
francs in some way, which this accident has prevented.

In Contrast:
A quote from John Maynard Keynes. (Of Keynesian Economics fame, main contributor to the "New Deal")

"If the Treasury were to fill old bottles with banknotes, bury them at suitable
depths in disused coalmines which are then filled up to the surface with town
rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up
again (the right to do so being obtained, of course, by tendering for leases of
the note-bearing territory), there need be no more unemployment and, with the
help of the repercussions, the real income of the community, and its capital
wealth also, would probably become a good deal greater than it actually is. It
would, indeed, be more sensible to build houses and the like; but if there are
political and practical difficulties in the way of this, the above would be
better than nothing. (p. 129)"

Note the "it would be better to do A, but B is better than nothing". Personally I would rather hold my money until A is available and not do B (dig through town rubbish to find banknotes) at all. The main point of Bastiat is for people to consider not only what is seen, but what is not seen. Rather than looking at just the window people, what about the grocery business, the home business, the entertainment business.

That is a real problem with government. Barrack Obama wants to create 5 million green jobs, working on climate change. All you hear is 5 million jobs created, never a word about jobs lost or other ramifications on other industries.

For more about Obama's green job creation (as if government can create jobs) read here