This parable by Frédéric Bastiat, written in 1850, shows the fallacy of the government’s attempts to “fix the economy” by “creating jobs”.
Have you ever witnessed the anger of the good shopkeeper, James Goodfellow, when his careless son happened to break a pane of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation—”It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?”
Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.
Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier’s trade—that it encourages that trade to the amount of six francs—I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.
But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, “Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen.”
It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.
One lesson to take away is that the US government claims to rescue a person by putting them to work and encouraging them to spend their income; however, they neglect to mention that they funded that work by confiscating the livelihood of another taxpayer by threat of legal force. (E.g., What happens when you don’t pay the IRS?)
In other words, if the government seriously wanted to create jobs, they should have left the money in the hands of the original taxpayer who could have hired more workers with it. By injecting themselves in the process as an Employment Service (un-Constitutionally), they rob Peter to pay Paul and skim a little off the top. (I.e., They take money out of the market, consume a portion of it as overhead, and make both the taxpayer and the worker poorer.)