If a politician looks intelligent, he’ll be a good president. If a car looks shiny, it’s a good purchase. If an economic policy looks like it will help people, it must be a good idea.
“Who are you going to believe,” my dad used to say. “Me or your own lying eyes?”
In 1850, the great French economist Frédéric Bastiat wrote an essay entitled Ce qu’on voit et ce qu’on ne voit pas (“That Which Is Seen and That Which Is Unseen”) that described how people are fooled by what they see.
His first and most famous example is now known as “the parable of the broken window”. A child breaks a shopkeeper’s window, and the shopkeeper is naturally dismayed to have to pay the glazier six francs to replace it. A bystander points out that there is a silver lining: although the shopkeeper is six francs poorer, it is also true that the glazier is six francs richer. Perhaps accident was not so unfortunate.
Bastiat continued his parable. The shopkeeper had been saving that six francs to buy new shoes. The money that went to the glazier would have gone to the cobbler. The glazier’s gain is the cobbler’s loss, and the shopkeeper’s loss isn’t balanced out at all!
A similar mistake is made for all sort of destructive acts. War spending is said to “stimulate the economy”. When the US government destroyed millions of so-called “clunkers” in 2009, the idea was to create jobs in the auto industry. Same logic, same flaw: they count what they see and disregard what they don’t.
T.A. Frank published an article in last week’s New Republic arguing against the pending immigration reform bill. It’s somewhat heretical in the liberal world, because it opposes reform, but that’s not what interests me. Frank gave this explanation:
an early important realization came to me in Hong Kong during the SARS crisis of 2003. I thought about how Hong Kong had created a flawed but remarkable city in which even low-skilled laborers such as these men and women, who were wearing masks and wiping down railings, lived far better than similar laborers on the other side of the border. I also realized that only a wall (and I didn’t much like walls) prevented millions of people on the People’s Republic of China side of the border from coming over to take these lowly jobs for a fraction of the current wage. (Hong Kong had no minimum wage at the time.) I knew I wouldn’t want these unskilled street cleaners to lose their adequate standard of living to such unbridled competition.
They say travel is broadening. Frank flew 10,000 miles to watch menial labor being perform by, well, not by a white person but at least by a non-Mexican and he found it very enlightening. He saw a Chinese man, let’s call him Wei, making a pretty good living cleaning walls and hand-rails. Frank, a self-described “decent person” and “a liberal” (apparently synonymous terms in his lexicon), saw Wei and felt sympathy for him. Why shouldn’t Wei make a good living? He works hard. Frank correctly realized that Wei’s wages were kept artificially high, not by a minimum wage, but by Hong Kong’s immigration laws.
Decent liberal Frank feels his eyes were opened by that realization. Immigration restrictions aren’t so bad: they’re keeping Wei and his family fed. If not for the those restrictions, Wei would be considerably worse off. Other liberals are still decent, they just haven’t seen what he’s seen. I think Frank feels even better about himself for indulging in his heresy, and for forgiving the orthodox liberals who don’t join him
Well and good, but what Frank doesn’t see is Wei’s brother Fang. Unlike Wei, Fang is still on the wrong side of the wall. Those restrictions that make Wei’s life better makes Fang’s life worse. Frank doesn’t worry Fang because he doesn’t see him.
What else doesn’t Frank see? He doesn’t seem to notice what Wei is doing. Wei is “wiping down a railing” – he’s disinfecting surfaces, important work when you’re in the middle of virus epidemic. If Fang’s brother were allowed in, working together they could keep the place even cleaner, and thereby save the life of Le, an office worker who otherwise would contract a fatal case SARS from an unwiped railing.
I don’t know that the worker’s name is Wei, and he may not have a brother and maybe nobody at all is going to die of SARS. I didn’t see any of these things.
But I know that for every worker made somewhat richer by an immigration restriction, there is one made poorer on the other side of the border, just Bastiat knew there was a cobbler whose loss canceled out the glazier’s gain. And just as there was a shopkeeper poorer by six francs in the story, there’s a customer paying more for a service.
They can’t be seen, but they’re there.
Guest Author Michael Lorton is a San Francisco-based programmer and writer. He writes the daily blog Blue Apsara about culture, economics, travel, law, and the occasional giant, carnivorous lizard.
Diopter image courtesy of Shutterstock