What Is Seen and What is Not Seen; B. Summers

Bastiat pointed out, in brilliant fashion, the universal truth that you can't get something for no thing. To most people this seems perfectly obvious. Yet many of these same people forget all about this "obvious fact" when the con versation turns to economics! They say: "Look at all the good that government spending does. Look at these fine public works. Consider, if you will, the many jobs these public works create. Surely you wouldn't suggest that government spending be reduced when so many jobs depend on it." 1 Frederick Bastiat, Selected Essays on Political Economy (Irvington-on Hudson, N.Y.: The Foundation for Eco nomic Education, Inc.), pp. 1-50. Mr. Summers is a member of the staff of the Foundation for Economic Education. 172 The concrete results of govern ment spending are what is seen. What is not seen is what would have happened to the taxpayers' money if it hadn't gone for taxes.

"What would have happened ?" The money would have been spent or saved. If it had been spent then it would have created jobs in the private sector just as jobs were created in the public sector, except that people would have been spend ing their money on what they wanted. If it had been saved then, di rectly or indirectly, it would have been invested and turned into fac tories, machines, and tools. That is, the money would have been con verted into capital goods that cre ate jobs for millions of workers. "Then government spending re ally doesn't increase employment?" That's right.· Jobs created by government spending are what is seen. However, they are only one side of the coin. The other side is the jobs that would have been cre ated by private spending and in vestment if taxes weren't so high. These jobs that government spend1974 WHAT IS SEEN AND WHAT IS NOT SEEN 173 ing destroyed are what is not seen.

"But what about. the public works that government spending creates ?" We are all aware of public works. They are what is seen. What is not seen are the vacations never taken, homes never built, appliances never bought, and who knows what else that never came into being because the taxpayers couldn't afford them. They couldn't afford these things because the money that would have paid for them was taxed away and spent on public' works. In evaluating public works, we must always remember that they came into being at the expense of whatever the taxpayers' money would have created if the money hadn't gone for taxes. Whatever the money would ha,ve created is, of course, not seen,. It is, however, the price we pay for the public works that a,re seen. The entire question of govern ment spending is perhaps best per ceived when one realizes that the government is not a source of wealth. The people themselves are the only true source of wealth.

Hence .the government can only give to the people what it has al ready taken from the people. You ean't get something for nothing! Once one realizes that there are not, in fact, any economic benefits inherent in government spending, how does one decide upon its ideal level? It seems to me that the only way to decide is to consult that woefully neglected entity we can c'onscience. How is this? What is the con nection that takes one all the way from the affairs of state to one's own innermost feelings? The connection is simply this: We live in a republic. Thus, our elected representatives act in our names. The government is our agent! Hence I should ask the govern ment to do only that which I want to feel personally responsible for. To me this means that govern mental expenditures should be re stricted to those needed to protect people from humanly initiated force and fraud. Any government spending that goes beyond this must benefit someone at someone else's expense. No matter how I look at it, my conscience tens me this is wrong.

I will not presume to tell you how you should feel about these matters. I am only beginning to know my own conscience! How ever, I do suggest that, stripped of economic nonsense py the works of such great men a~ Frederic Bas tiat, questions of political economy are best resolved iby consulting one's own inner sense of right and wrong. What better way could there be? ~ WELFARE FIFTYYEARS HENCE MORRIS C. SHUMIATCHER SINCE LORD BEVERIDGE drew his blueprint of the welfare state for Britain, it has become almost axiomatic in all western countries, including Canada, that govern ments will each year come to per form new functions that tradition ally had been regarded as the re sponsibility of the individual. As the state and other dominant institutions exercise their growing authority over the citizen, his own capacity to make future choices diminishes. Whilst the objects of institutional direction and control are undoubtedly initiated out of the most benign motives of crea t ing a secure and egalitarian so ciety, they ultimately succeed only to the extent that the citizen be comes "cabined, cribbed, con fined." The paradox is that the Dr. Shumiatcher is a prominent lawyer in Regina, Saskatchewan, well known as a lec turer, writer, defender of freedom.