GMU EconProf Chris Coyne channels Bastiat on this Valentine’s Day:
It’s true that spending on Valentine’s Day directs money toward certain industries, such as florists. But this visible effect should not blind us to the unseen effects of our gift-giving — the third economic concept we should bear in mind when buying those roses, that chocolate, or that ring. The money we spend on Valentine’s Day isn’t money we wouldn’t spend or save otherwise. If our pundits and commentators sat through a few lectures in Economics 101, they’d learn the crucial importance of the seen and the unseen.
There is a natural tendency to focus on what is readily observable (in this case, Valentine’s Day spending) while ignoring the unseen (the fact that the Valentine’s Day spending would have been allocated elsewhere if not for the holiday). This isn’t to say that producers of Valentine’s Day-related goods don’t create value, but instead to emphasize that holiday spending is no different from spending — or saving so that others can borrow and spend — on any other day of the year.
That’s a vital insight at a time when politicians struggle to outdo each other with grand schemes to jolt us into one kind of spending or another. Just like we’re individually best equipped to know what makes the perfect gift for our valentines, we’re best empowered by the free market to choose how to efficiently and rationally allocate our resources.
Speaking of the seen and unseen, this morning I heard someone talking about Bastiat. I inquired. He was actually talking about Jean-Michel Basquiat, a very prominent African-American artist. Then I remembered, this line in a Rick Ross song:
Red on the wall, Basquiat when I paint
I always thought Ross was singing about Bastiat, which didn’t make sense. But now, it makes sense! Plus Ross has a tattoo of Basquiat on his thigh. Learn something new every day!
Update: And, speaking of Bastiat, broken windows, and Valentine’s day, Mili sent me a story from Pittsburgh about someone who smashed a window at a jewelry store to take some jewelry, likely for a Valentine’s Day present. Broken window parable! The seen and unseen! Valentine’s Day! If this assailant likes Rick Ross, it merges everything about this post into one!
Well, that’s not really the story. Someone did break through a door at a Pittsburgh Jewelry store. The owner suspects it was for a Valentine’s gift, though.
Officers said the robber was in and out of the store in seconds. The owner said the robber didn’t get away with expensive merchandise.
“We have a lot of different pieces that are so much more expensive and more appealing,” said the store owner Ella Livshim. “I advertized it in the window because it’s a nice Valentine’s gift. Maybe someone liked it so much they broke in for the pieces?”