In the Pittsburgh Tribune-Review, Don Boudreaux has an excellent article on the insights of Frederic Bastiat on the “unseen” aspects of economics. The whole thing is worth a read. But Don focuses very much on negative unseen consequences. I want to share a positive case:
I have a cat. And, like every other cat owner in the world, I think my cat is the absolute best. She is the first “real” pet I ever had (I had a few fish growing up and a gecko my first year living away from my parents). So, until I was 25, I never knew the joy of life with a pet.
I can honestly say my life is better off with my cat in it. She has been a constant companion to me since the first day I adopted her, bringing me comfort when my grandparents died and cheering me up when I am blue. All this was “unseen” to me in my pre-pet days. It’s very likely that I would have lived my life perfectly happy without a pet, not knowing what I was missing. But my life was surely worse off for it. I just didn’t know it. If someone had passed a pet ban, the quality of my pre-pet life wouldn’t necessarily have changed.
But the opportunity for my life to improve with a pet was gone forever.
This lost opportunity is the “unseen” effect Bastiat often talks about. When regulations or rules are implemented*, they destroy certain opportunities; even if there are no seen negative consequences, there are lost potential opportunities. Failure to account for these, or to even discuss them, is simply poor economics.
*None of this is to say that all rules should be scrapped because of the unseen effects. There is the need for some rules, specifically “negative” rules that enforce rights. What I object to are “positive” rules that compel behavior or prevent the exercise of rights in a peaceful manner.