Fisher needs a lesson from Bastiat
Saturday, July 26th, 2008 By James Nesbitt
Earlier this week, from the Department of Development:
Lieutenant Governor Lee Fisher today announced that more than $1.6 million in economic development and roadwork development grants have been awarded to aid in the growth of businesses and the creation and retention of jobs in Ohio. The grants, administered by the Ohio Department of Development, were approved today by the State Controlling Board and could create 324 positions and retain 1,514 jobs for Ohioans.
“Through strategic investments, we are helping to provide Ohio’s communities with the tools they need to compete for economic development, and businesses with the tools they need to invest and succeed in Ohio,” said Lt. Governor Fisher, who also serves as Director of the Ohio Department of Development. “Our robust partnerships with these businesses and communities are fostering the development that will grow Ohio’s economy.”
Lt. Gov. Fisher isn’t providing Ohio’s communities with the tools they need; he’s merely redistributing them and destroying efficiency in the process. Local communities already had the tools for economic success before the high taxation of the state took them away. 19th century French economist Frederic Bastiat explains why programs such as the one Fisher praises do not give the benefits their proponents claim and shows how officials like Lee Fisher are able to get away with these extravagant claims in his 1848 essay, What is Seen and What is Not Seen:
Have you ever heard anyone say: “Taxes are the best investment; they are a life-giving dew. See how many families they keep alive, and follow in imagination their indirect effects on industry; they are infinite, as extensive as life itself.”…
…The advantages that government officials enjoy in drawing their salaries are what is seen. The benefits that result for their suppliers are also what is seen. They are right under your nose.
But the disadvantage that the taxpayers try to free themselves from is what is not seen, and the distress that results from it for the merchants who supply them is something further that is not seen, although it should stand out plainly enough to be seen intellectually.
When a government official spends on his own behalf one hundred sous more, this implies that a taxpayer spends on his own behalf one hundred sous the less. But the spending of the government official is seen, because it is done; while that of the taxpayer is not seen, because—alas!—he is prevented from doing it.
In this case, the Department of Development selected certain municipalities and companies to receive “encouragement,” to use the words of Bastiat. But because that encouragement is provided by confiscating the wealth of citizens who would otherwise spend or invest it, it comes at the expense of the encouragement of other municipalities and companies. And as history has shown time and again, individual spenders make wiser choices than central planners. Until the public looks deeper to examine the effects “that are not seen,” officials will continue to thrive on this economically destructive rhetoric.
Tags: economic development
July 30th, 2008 at 10:43 am
[...] to account for what Frederic Bastiat referred to as “the things unseen” (mentioned in a recent post) The U.S. Bureau of Labor Statistics figures only show the number of jobs lost in a certain [...]