Tracing consequences both seen and unseen.
Eric D. DixonCountering the Keynesian Appetite for Destruction
Posted at 2:08 am on April 3, 2010, by Eric D. Dixon

Working as an intern for the Cato Institute in 1997 was one of the most formative experiences of my life. During that time, I participated with the other interns in a series of lunchtime discussions with Tom Palmer, a Cato senior fellow, director of Cato University, and also now with the Atlas Economic Research Foundation, where he’s vice president for international programs. I’ve written elsewhere about my high esteem for Tom, and his considerable impact on my own intellectual development, and I could say more — but for now, I’ll get to the point.

The very first reading assignment that Tom gave to the interns was Frédéric Bastiat‘s essay “What Is Seen and What Is Not Seen.” It’s pretty powerful stuff, even today, and even for those of us for whom the ideas contained in that essay are old hat. That may be partly because of Bastiat’s clear, lucid, illustrative way of making abstract economic concepts understandable and unmistakable, but also because the economic fallacies that Bastiat debunked are still widely believed today, so his points remain relevant to modern political and social problems. When journalists — and even a Nobel laureate economist — begin to credit wanton destruction as a form of economic stimulus, it becomes obvious that Bastiat is more relevant than ever. Henry Hazlitt updated Bastiat’s essays for a new generation in his book for which this blog is named. Tom Palmer is helping to bring them to the YouTube generation.

Tom has begun producing a series of video clips with Atlas that aim to take these fallacy-busting arguments viral. I’m far from the first person to link to this clip, and I’ll be far from the last. The belief that destruction — or, for the same reasons, government spending — can stimulate the economy in a useful way is a symptom of lack of forethought. Anybody reading this right now can help stem the tide of economic ignorance by passing on the link to friends, or suggesting it to the reading audience of whatever forum you might participate in.

[Cross-posted at Shrubbloggers.]


Filed under: Economic Theory, Government Spending
Comments: 5 Comments
 

5 Comments »

  1. [...] at The Lesson Applied.] — Eric D. DixonComments (0) [...]

    Pingback by The Shrubbloggers » Countering the Keynesian Appetite for Destruction — April 3, 2010 @ 2:19 am

  2. [...] attempt the “economic stimulus” on a desert island. Five persons have survived the shipwreck. Joe is good at gathering [...]

    Pingback by What if there were deficit thinking, thinking deficit, on a desert island? « David M. Brown's Blog — August 9, 2011 @ 1:15 am

  3. [...] attempt the program of “economic stimulus” on a desert island. Five persons have survived the shipwreck. Joe is good at gathering berries [...]

    Pingback by The Lesson Applied » What if there were deficit thinking, thinking deficit, on a desert island? — August 9, 2011 @ 1:44 am

  4. [...] Within the past few years, Bastiat’s and Hazlitt’s critical heirs have applied the fallacy again and again to modern Keynesians. Here’s a video that does exactly that to Paul Krugman’s application of Keynesian theory to the destruction wrought by terrorist attacks (featured on this blog last year): [...]

    Pingback by The Lesson Applied » The Keynesian Celebration of Destruction — October 19, 2011 @ 12:06 am

  5. [...] Within the past few years, Bastiat’s and Hazlitt’s critical heirs have applied the fallacy again and again to modern Keynesians. Here’s a video that does exactly that to Paul Krugman’s application of Keynesian theory to the destruction wrought by terrorist attacks (featured on this blog last year): [...]

    Pingback by The Shrubbloggers » The Keynesian Celebration of Destruction — October 19, 2011 @ 12:10 am

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Henry Hazlitt"[T]he whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."
Henry Hazlitt, Economics in One Lesson
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