The Broken Window
Then Isaac sowed in that land, and received in the same year an hundredfold: and the LORD blessed him. And the man waxed great, and went forward, and grew until he became very great: For he had possession of flocks, and possession of herds, and great store of servants: and the Philistines envied him. For all the wells which his father’s servants had digged in the days of Abraham his father, the Philistines had stopped them, and filled them with earth (Genesis 26:12-15).
I begin with a little-known passage in the Bible. The enemies of Abraham and his family resented the fact that Abraham had dug wells. Water wells are a major form of wealth in a low-rain society. Abraham had wealth; his son Isaac had wealth.
The Philistines resented this. So, when they had an opportunity to do so, they filled in the wells with dirt. This did not make them any wealthier. They did not steal the wells from Isaac. They also did not rent the wells from Isaac. They did not take advantage of the water. They simply made certain that Isaac could not take advantage of the water. This is the motivation we call envy. The translators of the Kings James Version recognized this. Envy is the motivation to destroy, to tear down. It targets an individual who has an advantage. The envious person does not seek to share in the advantage. He wants only to eliminate the other person’s advantage.
Most of us find it difficult to believe that people are motivated in this way, but some people are, and they have been throughout history. They are filled with resentment.
This brings me to the topic at hand: the supreme lesson of Henry Hazlitt’s book. When Hazlitt chose the title, Economics in One Lesson, he had to provide one lesson. The book has 24 chapters. But the title is an indication of what the book is about. Hazlitt only allowed himself one lesson.
Here is the lesson: Bastiat’s broken window fallacy. Hazlitt chose that as his guide, which was an act of near genius. He discovered an idea that had been buried for over a century. Bastiat’s analogy was rather like Isaac’s wells: filled in with dirt by Philistines. Hazlitt dug deep and got the water flowing again. Then he applied that principle in every chapter in the book. So, the title of the book is correct: he really does teach economics in one lesson. But it took 24 chapters to get this lesson across.
I take the broken window fallacy very seriously. Specifically, it is about envy. It is not about jealousy. This is why it is limited in dealing with those aspects of modern politics which we think of as the welfare state or wealth redistribution. Here is why. Envy is defined as the impulse of an individual who seeks to destroy somebody else’s advantage, even though he is not benefited directly by the other person’s loss.
(For the rest of my article, click the link.)