That Which Is Seen, and That Which Is Not Seen quiz

Questions and answers

1. 1

   Question 1. Which category best describes this work?

   • Correct answer: Political Economy
   • Gothic Fiction
   • Naturalism
   • Modernism
   • Romantic Literature

   Political Economy is exactly right. Bastiat was a French economist and legislator arguing against protectionism and state intervention using parables and logical analysis.

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2. 2

   Question 2. According to Bastiat's Introduction, what is the whole difference between a good and a bad economist?

   • A good economist learns only from experience and its painful effects; a bad economist relies on foresight, which is unreliable
   • A good economist relies on mathematics and statistics; a bad economist relies on storytelling and imaginary parables instead
   • A good economist supports free trade and low taxation; a bad economist supports government spending and protective tariffs
   • Correct answer: A good economist sees both the visible and the invisible effects of an action; a bad economist sees only the visible ones

   Bastiat's thesis: the good economist takes account both of the effects which are seen and of those which it is necessary to foresee. The bad economist sees only the immediate visible effect. This single distinction is the engine of the entire essay.

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3. 3

   Question 3. In Section I, what is Bastiat's refutation of the bystanders who say the broken window is a good thing?

   • The glazier earns six francs and spends them elsewhere, producing a chain of multiplied benefits throughout the community
   • The careless son should compensate his father, so the family's loss is recovered and national industry remains unchanged
   • Correct answer: The six francs spent on glass cannot also be spent on shoes or books — destruction destroys wealth, it does not create it
   • Breaking a window creates employment for the glazier, so the community gains six francs of industry it would otherwise lack

   The bystanders see only what is seen: the glazier's gain. What is not seen is that the shopkeeper's six francs, had the window not been broken, would have bought him a new pair of shoes or a book. The glazier's gain is the shoemaker's or bookseller's loss. The community has not gained a window; it has lost whatever those six francs would have created.

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4. 4

   Question 4. How much does it cost the shopkeeper to have his broken window repaired in Section I?

   • Two francs
   • Correct answer: Six francs
   • Ten francs
   • Twenty francs

   The window costs six francs — the amount Bastiat uses throughout the parable to show what the shopkeeper could have bought instead with that money.

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5. 5

   Question 5. In the Introduction, Bastiat names two teachers that show people the hidden effects of their choices. What does he hope his essay can do?

   • Show that both teachers fail, so lawmakers must decide for people what is best for them
   • Replace foresight with careful records of what past governments actually did in the long run
   • Correct answer: Let gentle foresight teach the lesson that harsh experience teaches by making people suffer
   • Prove that experience is the better teacher, since people only learn by feeling the results

   Bastiat says mankind learns "from two very different masters — experience and foresight." He writes, "Experience teaches effectually, but brutally": we learn that fire burns by being burned. "For this rough teacher, I should like, if possible, to substitute a more gentle one. I mean Foresight." Every later section, from the broken window to taxes and machinery, is practice in foreseeing the unseen effect before we have to feel it.

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6. 6

   Question 6. In Section II, what does Bastiat argue about the disbanding of troops?

   • Correct answer: Disbanded soldiers enter the civilian workforce and produce goods — their unseen productive contribution offsets the visible loss of military spending
   • Disbanding troops is harmful because a hundred thousand additional workers would increase competition and immediately reduce wages everywhere
   • The army should be maintained because military purchases of wine, weapons and clothing stimulate manufacturing and industry in the garrison towns
   • Disbanding troops makes no economic difference, since the same hundred millions of francs circulate whether the men are soldiers or civilian workers

   Bastiat argues that the visible loss — soldiers no longer receiving pay — conceals the unseen gain: those same men become productive workers, farmers, or tradespeople creating real goods. The argument that keeping soldiers employed benefits the economy ignores what they would have produced had they never been in the army.

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7. 7

   Question 7. What is Bastiat's core argument about taxes in Section III?

   • Taxation is always equivalent to robbery, since government officials never provide taxpayers any service equal to what they cost
   • The luxury of government ministers is economically beneficial, because their banquets and soirees circulate money through Parisian industry
   • Taxes are the best possible investment, because public spending revives the nation like a fertilizing rain falling on a parched territory
   • Correct answer: A franc taxed away from a citizen cannot also be spent by that citizen — public spending redirects resources rather than multiplying them

   What is seen is the public road or building the state constructs. What is not seen is the private goods — shoes, books, tools — the taxpayer would have bought with that same franc. The state employs different workers, not more workers. Public spending redirects resources; it does not create new ones.

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8. 8

   Question 8. In Section IV, what is Bastiat's argument about state subsidies to theaters and the fine arts?

   • Without government support, the arts in France would immediately disappear, so the subsidy is necessary to preserve national culture
   • Correct answer: A franc given to a subsidized playwright is a franc taken from a taxpayer who would have spent it on something he preferred
   • Bastiat opposes the fine arts themselves, considering theaters, paintings and music useless luxuries that a nation cannot afford
   • Theater subsidies are justified because the theaters employ 80,000 workmen, including painters, decorators, masons and architects

   Bastiat applies the same seen/unseen lens: the subsidized theater and playwright are visible. What is not seen is the coat, furniture, or book the taxpayer would have bought with that same money — goods that would also have supported workers. The state substitutes its aesthetic preferences for the taxpayer's own choices.

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9. 9

   Question 9. What does "Opportunity Cost" mean in this story?

   • Correct answer: The value of the best alternative foregone when a resource is used for one purpose rather than another
   • The direct monetary price paid to purchase a good or service, as recorded on the invoice or receipt
   • A penalty or additional fee charged when a buyer fails to accept an offer before its official deadline
   • The total expense of manufacturing a product, including every material, tool and hour of labor required

   Bastiat's entire essay is an extended illustration of opportunity cost — the value of what is given up when resources are directed one way rather than another. The broken window's repair costs the shopkeeper not just six francs, but the shoes or book he can no longer buy. Friedrich von Wieser coined the term in 1914, but Bastiat demonstrated the concept in 1850.

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10. 10

    Question 10. In Section VIII, what does Bastiat argue about labor-saving machinery?

    • Machinery benefits only the inventor and the capitalist, who keep the entire saving while the discharged workman receives nothing
    • Machinery is harmless only when consumption of the cheaper product increases enough that factories must employ as many workers as before
    • Correct answer: Machinery frees labor for new tasks and lowers prices for consumers, producing long-run gains that outweigh short-run displacement
    • Machinery is a curse on the working class, because every year its increasing power condemns millions of laborers to poverty

    The seen cost of machinery is the displacement of workers from a specific task. What is not seen is that the same machinery lowers the price of goods for all consumers, freeing purchasing power that is then spent on other goods and creating demand for new kinds of labor. Bastiat traces the unseen chain: lower prices benefit consumers who redirect their savings, employing new workers in new industries.

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11. 11

    Question 11. Which of these events actually happened in the story?

    • Bastiat uses the broken window parable to open Section I of the essay.

      Happened

      Section I — 'The Broken Window' — is the essay's most famous parable, establishing the seen/unseen framework that all subsequent sections apply.

    • Bastiat argues that government spending always creates more wealth than private spending.

      Didn't happen

      Bastiat argues the opposite: government spending redirects resources away from uses the taxpayer would have chosen, substituting the legislator's preferences for the citizen's own.

    • The essay was published in July 1850, just months before Bastiat's death.

      Happened

      Bastiat published the essay as a pamphlet in July 1850; he died on Christmas Eve 1850 in Rome, having suffered from tuberculosis for years.

    • Bastiat claims that protective tariffs benefit the overall economy by creating jobs in protected industries.

      Didn't happen

      In Section VII, Bastiat argues that tariffs protect one visible group of workers while destroying the unseen purchasing power of every consumer and the jobs that spending would have created elsewhere.

    • Henry Hazlitt's Economics in One Lesson (1946) is a direct restatement of Bastiat's argument.

      Happened

      Hazlitt acknowledged that his book extended Bastiat's central insight: the art of economics consists in looking not merely at immediate effects but at the longer effects of any act or policy.

    • Bastiat argues in Section VIII that labor-saving machines are always harmful to workers.

      Didn't happen

      Bastiat defends machinery: the seen harm (displaced workers in one trade) is real but temporary; the unseen gain (lower prices for all consumers, new demand, new industries) is larger and lasting.

    • The essay has twelve numbered sections plus an Introduction.

      Happened

      The essay opens with an Introduction stating the thesis, followed by twelve sections each applying the seen/unseen lens to a different economic question or policy debate.

    • Bastiat argues that colonial spending on Algeria costs France nothing because the military is already paid.

      Didn't happen

      In Section X, Bastiat applies the same analysis: the visible cost is the subsidy sent to Algeria; the invisible cost is all the private investment in France that the same money would otherwise have financed.

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12. 12

    Question 12. Applying Bastiat's seen/unseen framework to Section VII, what is the hidden cost of a protective tariff?

    • The hidden cost falls on James B. alone, who pays five additional francs for iron, while the nation's total industry and employment increase by the same amount
    • Correct answer: The visible benefit goes to protected domestic producers; the invisible cost falls on every consumer and on industries that lose the spending those consumers can no longer direct elsewhere
    • There is no hidden cost, because M. Prohibant's additional profit employs more workmen and tradesmen, spreading prosperity like concentric circles across a lake
    • The hidden cost falls only on the Belgian manufacturers, who lose their French customers, while French consumers continue paying the original ten francs

    What is seen: domestic workers in the protected industry keep their jobs. What is not seen: every domestic consumer pays a higher price, and that extra spending on protected goods is spending they cannot direct toward other goods, destroying jobs in those other industries. Bastiat calls restrictions plunder dressed in the language of patriotism.

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13. 13

    Question 13. What is Bastiat's argument about state-directed credit in Section IX?

    • Issuing additional paper money makes credit available to everyone, so the government can lend generously without diminishing what private lenders possess
    • Government-guaranteed credit places plows in the hands of poor farmers like James, increasing the nation's total supply of tools and agricultural wealth
    • Credit institutions are fundamentally harmful, so legislation should artificially restrict borrowing to protect families from unaffordable debts
    • Correct answer: State credit merely redirects existing savings — capital lent to favored borrowers is capital unavailable to others who would have used it differently

    When the state lends to a favored industry, it does not create capital — it diverts it. What is seen: the subsidized borrower who builds his enterprise. What is not seen: the farmer, artisan, or merchant who could not obtain credit and therefore could not build his own enterprise.

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14. 14

    Question 14. How does Bastiat resolve the debate between frugality and luxury in Section XI?

    • Frugality damages trade temporarily, so a prosperous nation requires a balance of spenders like Mondor and savers like Aristus to maintain employment for every worker
    • Luxury is economically superior, because Mondor's spending on furniture, carriages, horses and banquets employs workers immediately, while the savings of Aristus remain idle in his chest
    • Correct answer: Both put money into circulation, so the seen effects balance — but looking to what is not seen, frugality is superior, morally beyond dispute and economically in the long run
    • Morality and economics genuinely conflict here: saving is the more virtuous personal choice, but luxurious spending is more beneficial to national industry and employment

    Bastiat grants that Mondor's luxury and Aristus's savings both set money moving — the saving is lent and spent by others — so the immediate, visible effect is the same. What is not seen decides it: Aristus's capital goes to productive work, and Bastiat closes Section XI with "In a moral point of view, the superiority of frugality over luxury is indisputable."

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15. 15

    Question 15. Which 20th-century economist acknowledged that his most famous work was a direct restatement of Bastiat's essay?

    • Frederick Winslow Taylor, whose Principles of Scientific Management (1911) applied Bastiat to industrial efficiency
    • Correct answer: Henry Hazlitt, whose Economics in One Lesson (1946) is by his own account a restatement of Bastiat's central argument
    • Karl Marx, whose Das Kapital (1867) celebrated Bastiat for defending laborers against capitalist exploitation
    • John Maynard Keynes, whose General Theory (1936) used the broken window parable to justify deficit spending

    Henry Hazlitt explicitly acknowledged that Economics in One Lesson (1946) was built on Bastiat's insight. Hazlitt's one lesson — that economics requires tracing the effects of a policy on all groups, not just the most visible — is Bastiat's seen/unseen distinction restated for a modern audience.

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16. 16

    Question 16. A city uses tax revenue to build a new sports stadium, and supporters argue it creates jobs. Using Bastiat's framework, what is seen and what is not seen?

    • The seen effect is civic pride and improved quality of life; the unseen effect is the environmental damage and traffic congestion construction causes
    • The seen effect is the jobs created building the stadium; the unseen effect is the additional spending visitors will bring to local restaurants
    • The seen effect is the tax revenue the city collects; the unseen effect is the employment the stadium will continue creating for many years
    • Correct answer: The seen effect is the jobs created building the stadium; the unseen effect is the jobs and goods that same money would have created if left with taxpayers

    This is the broken window parable scaled up. What is seen: construction workers building the stadium — visible, photographable employment. What is not seen: every taxpayer who funded the stadium had less money to spend on restaurants, appliances, or services — those workers who would have been employed by that private spending remain invisible. The stadium creates jobs; it does not create net new jobs.

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