Et Invisibilium translates from the Latin as The Invisible or, in the context of this site, The Unseen. The use of the term The Unseen originates with an essay by nineteenth century French economist Frédéric Bastiat entitled “Ce qu’on voit et ce qu’on ne voit pas” (“What is Seen and What is Unseen”). In Bastiat’s estimation, being aware of both the seen and the unseen “constitutes the whole difference” between a good and a bad economist.
As with many of the immutable laws of economics, Bastiat’s observations are just as relevant today as they were when he first discovered them. After all, it is far easier to contemplate and analyze the visible effects of economic policy than it is to anticipate or understand the unseen effects. Hence, the history of centrally planned economies is replete with unintended consequences and, as a result, centrally planned solutions to problems created by prior central planning. Most importantly, the costs incurred by centrally planned economic activity are nearly always borne by those most distant from the decision making process.
We live in a world predominantly planned by political “elites,” whether usurper, elected or appointed, who have little incentive to consider the unseen. In the United States, for example, the incentives are completely reversed: politicians and bureaucrats attain and retain power by lauding the short term benefits of destructive social, fiscal and monetary policies. Any politician seeking office or reelection seals their fate with long-term projections or short-term failures. This is made even more likely by the typical voter who has a short attention span and a diminishing incentive to be well informed.
In short, the unseen is that which could have happened had certain actions not occurred or policies not been implemented. Since the future is always uncertain, it is never possible to know what actually would have happened. However, it is feasible to know those things that became impossible, more costly, or delayed as a result of certain actions or policies. In Bastiat’s example, known best as the “Broken Window Fallacy,” the seen is a boost in business for the glazier tasked with repairing a window at the bakery. This is claimed to be a net gain for all because the breaking of the window sparked commerce. The unseen involves all the things the baker might possibly have done had he not been forced to expend the capital and resources necessary to replace the window. Rather than paying for the repair, he might have purchased a pair of shoes or saved toward another oven for his bakery. Instead, he was forced to purchase a window to get himself back to the point he was prior, now absent the capital.
This fallacy is often employed by governments to claim benefits of state action or, more perversely, to imply that destruction spurs economic growth. The most glaring example is the claim that the second World War ended the great depression of the Twentieth Century. The assertion that the death of millions of people was a net gain for the world economy tests even the most liberal application of moral litmus. Regardless, the condition of Europe, Japan and the South Pacific following the war is analogous to the baker’s window; years of rebuilding at tremendous cost would only return these places to a state approximating pre-war conditions. Similarly, the unseen is all of the development, innovation and growth that might have occurred had the governments of the major powers not been engaged in destroying each other.
The war, rather than ending the depression, brought the economy of the world to previously unexplored depths. Food and supplies were rationed as productive resources were poured into destructive activities like munitions and armament production. Death from starvation increased during the war, well exceeding the levels experienced during the decade of depression. While there may have been existential reasons to prosecute the war, there should be no mistaking the event as a net drain on the global economy.
The state is rarely in short supply of such outlandish claims. For example, when the crisis of 2008 occurred, the Obama administration claimed that, without their fiscal and monetary intervention, things would have been much worse. However, the unseen is not a prediction of what would have happened, it is an assertion of things that could not happen as a result of a given action or policy. We cannot employ a counterfactual to somehow know if conditions would have been better or worse absent a given action. We can only know, in this case, that money was spent on certain programs (i.e. the seen) which might otherwise have been spent in other productive ways (i.e. the unseen). The Obama administration applied spending to programs considered most productive to the central planners of the administration. That money could not then be spent elsewhere. The result of those policies has been prolonged stagnation. Bastiat would likely assert that this was due to a failure to account for the unseen.
While not an economist myself, I have learned a great deal about the “dismal science” from great thinkers like Bastiat, Hazlitt, Roberts, Mises, Rothbard, Hoppe, Woods, Kinsella, etc., and found it to be a far more accessible science than is commonly believed. In the end, it is my desire that more people will begin to see the unseen.