Phony Philanthropy

Frédéric Bastiat was a nineteenth-century humanist of a strange vari­ety, one of those rare independent thinkers—independent to the point of being unknown in his own country, France, since his ideas ran counter to French political orthodoxy (he joins another of my favorite thinkers, Pierre Bayle, in being unknown at home and in his own language). But he has a large number of followers in America.

In his essay "What We See and What We Don't See," Bastiat offered the following idea: we can see what governments do, and therefore sing their praises—but we do not see the alternative. But there is an alternative; it is less obvious and remains unseen.

Recall the confirmation fallacy: governments are great at telling you what they did, but not what they did not do. In fact, they engage in what could be labeled as phony "philanthropy," the activity of helping people in a visible and sensational way without taking into account the unseen cemetery of invisible consequences. Bastiat inspired libertarians by attack­ing the usual arguments that showed the benefits of governments. But his ideas can be generalized to apply to both the Right and the Left.
Bastiat goes a bit deeper. If both the positive and the negative conse­quences of an action fell on its author, our learning would be fast. But often an action's positive consequences benefit only its author, since they are visible, while the negative consequences, being invisible, apply to oth­ers, with a net cost to society. Consider job-protection measures: you no­tice those whose jobs are made safe and ascribe social benefits to such protections. You do not notice the effect on those who cannot find a job as a result, since the measure will reduce job openings. In some cases, as with the cancer patients who may be punished by Katrina, the positive consequences of an action will immediately benefit the politicians and phony humanitarians, while the negative ones take a long time to appear — they may never become noticeable. One can even blame the press for di­recting charitable contributions toward those who may need them the least.

(The Black Swan, Nassim Nicholas Taleb)