Friday, October 2, 2009

Frederic Bastiat and Compassionate Economics or Business

Compassion is sympathy for those who have had misfortune. There is a desire to eliminate or mediate the suffering. Empathy is the wish to share in an other's emotions or feelings.

In his 1850 essay, "What is Seen and What is Not Seen," Frederic Bastiat noted " There the economist and member of the French parliament pointed out that law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them."

Bastiat further said "there is only one difference between a bad economist and a good one: The bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen."

It’s the same way you can have compassion for workers who lose their jobs. They can be seen. You cannot have compassion for unknown potential workers in other industries who don’t get job offers because a compassionate government subsidizes an unprofitable company. The potential employees are never hired and are therefore unseen.

You may say that unfortunate, known homeowners who lose their homes through foreclosure, make it possible for unknown potential individuals who may not have been able to afford a home in the past.

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