September 13, 2011

CURSING THE DARKNESS:

Rethinking Bastiat and Broken Windows (Amity Shlaes, 9/12/11, Bloomberg)

This month, we mark an anniversary for the philosopher who first articulated the Broken Window concept -- and a few other suddenly relevant economic ideas.

The anniversary is that of a desperate trip to Paris made in September 1850 by a French politician and economist with an unshakeable cough named Frederic Bastiat. France was a republic -- that month. But for more than half a century, the country had lurched from revolution to republic to coup or revolution again. By 1850, many Frenchmen believed that, economically and politically, their country had only two choices.

The first was anarchy and guillotines. The second was an authoritarian government, preferably led by someone named Napoleon, whose job was to keep the streets quiet by playing the hero and handing out bribes, directly or indirectly, to businesses, farmers and public officials. Government spending was the necessary tool of such a system.

There was a third way, Bastiat argued to officials, legislators and anyone else who would listen in Paris that September: smaller government, more freedom for individuals, and fewer grants to interest groups. That might yield a more stable economy and so a more stable France.

Bastiat got precisely nowhere; the president, Louis Napoleon, mounted a successful coup the next year. And today Bastiat himself is scarcely discussed. People skip over him because they are unsure how to pronounce his name (it's "Bast-ee-YA") or confuse him with Basquiat, the 1980s graffiti artist. Besides, Bastiat lived long ago, in the era of candlesticks.

Still, he's worth going back to. His old ideas actually resemble candles, shining so brightly they help us sort out murky proposals made today.


The metaphor is apt because his essential idea is that you never should have replaced your candles with electric lights because you'd have wasted money on the wax.


Posted by at September 13, 2011 6:26 PM
  

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