Jim Driver: Basic economics | TheUnion.com

Jim Driver: Basic economics

What is the first thing that you should look at when examining any economic situation? The usual answer is: what you see.

What is the second thing that you should look at when examining any economic situation? The answer should be: what you do not see.

This is a problem that most people never consider. And that is because what you see is so visible that you never consider any other possibility.

Henry Hazlitt in his classic little book, “Economics in one Lesson,” available free from the Foundation for Economic Education at FEE.com, shows how to see what is usually not seen in Frederic Bastiat’s story of “The Broken Window.”

In this story, someone throws a brick into a baker’s store window. The baker is furious, but the perpetrator is gone. A crowd gathers. After a while, someone suggests that the baker’s loss is the glazer’s gain. However, what is not seen is that the baker was planning to purchase a new suit from a tailor. Now, instead of a new suit, he must purchase a new window. The glazer’s gain was really the tailor’s loss.

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My recommendation to you, the reader, is that whenever you consider any economic idea, be sure to think about what is unseen.

Jim Driver

Rough And Ready

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