A Problem With Bastiat's Broken Window Theory?

I was reading through Frederic Bastiat’s “That Which is Seen, and That Which is Not Seen” essay, where he outlines his Broken Window Theory. Bastiat states that when a shopkeeper’s careless son breaks a window, onlookers console him saying, “Everybody has to make a living, and what would become of glass-makers if glass windows were never broken?” Bastiat attempts to refute this logic by saying that ‘what is seen’ is the immediate ₣6 profit made by the glass-maker, but ‘what is not seen’ is the fact that the shopkeeper (had his window not been broken) would have spent that ₣6 on a new pair of shoes AND still had the unbroken window. Because of the broken window, he now has to spend the ₣6 on fixing his window, and therefore he comes out of it all with the mere neutral satisfaction that he had before–that of having an unbroken window. So Bastiat states that in the situation of the broken window, the shopkeeper enjoys one less good than in the situation of the unbroken window. Therefore, Bastiat concludes, destruction gives no economic benefit to society.

However, I noticed Bastiat just went on after that without examining what happened to the ₣6 that went to the glass maker. Suppose the glass maker turned around and used that ₣6 to buy a pair of shoes.

Bastiat claims that in the broken window situation, the shoemaker goes without profit, but really the ₣6 doesn’t just disappear into a black hole when the glass-maker gets ahold of it. The glass-maker could just as easily use that ₣6 to buy a pair of shoes. In either the broken window or the unbroken window scenario, can’t the shoe-maker still sell a pair of shoes, just to a different person in each scenario?

I’m having trouble understanding Bastiat’s logic here. Can anyone help me out?

Try and keep things focused. Bastiat is making a specific argument. Let's say the window remains intact. The shopkeeper spends the money on the shoes. He now has his window and a new pair of shoes. Let's say it is destroyed. Now all he has is a broken window that needs fixing. The windowmaker may or may not spend it, but the point is the shopkeeper's wealth was destroyed in the process - no new wealth was created, it was gobbled up in the process. If the shopkeeper had spent it, the money would still circulate through the economy just as if the windowmaker had spent it, only there will be no destroyed window.

-Jon

But the way I see it, the ultimate result of each scenario at the end of the day is:

Unbroken Window Scenario
Shopkeeper = one unbroken window, one pair of shoes gained
Glassmaker = nothing
Shoemaker = one pair of shoes sold

Broken Window Scenario
Shopkeeper = one unbroken window (because the glassmaker replaced it)
Glassmaker = one window pane sold, one pair of shoes gained
Shoemaker = one pair of shoes sold

I'm having trouble seeing how the opportunity of a broken window isn't economically beneficial here.  Sure, the shopkeeper loses wealth (which is very unfortunate for him) in the broken window scenario, but the glassmaker gains wealth in the broken window scenario, and the shoemaker can gain wealth in either scenario (for him, it doesn't matter WHO buys the pair of shoes, he still sells one pair of shoes in either scenario).

Where am I going wrong here?

The way I understand the fallacy is that it asserts that destruction can be creative of wealth. Bastiat's exposition shows that, someone is losing out in the transaction. The windowmaker may spend the revenue they gain, but someone has lost. There is no net benefit on the whole. The shopkeeper might've spent the money anyway, which is the "unseen".

-Jon

But, as I pointed out in my tally chart above, at the end of the day, the broken window scenario has the exact same result as the unbroken window scenario, but the broken window scenario also has one window pane sold.  Sure, the shopkeeper loses something in the broken window scenario, but it seems that the shopkeeper's loss is more than offset by the glassmaker's gain.

1 unbroken window + 1 pair of shoes gained + 1 pair of shoes sold < 1 unbroken window + 1 pair of shoes gained + 1 pair of shoe sold + 1 glass window sold

Right?

No, the fallacy is that wealth is created anew, i.e. that after the window is destroyed there is more wealth than there was before, because the shopkeeper's purchase of the shoes (the unseen) is not taken into account. So what is seen is a new window plus the shoes, versus the shopkeeper with his window intact. Seemingly there is more economic activity. The fact that he would spend his earnings is ignored by those who perpetrate the fallacy. What you're saying is both scenarios should lead to the same level of wealth - but that isn't what Bastiat is out to refute if I have understood him correctly.

The fallacy would be: new window + new shoes - broken window > window intact.

Compare with: new window + new shoes - broken window = window intact + new shoes.

Hope that's clearer.

-Jon

Ohhhhhh, I see.  Bastiat isn't saying that one broken window is a net loss to society, he's saying that's a benefitless transfer of wealth that shouldn't have been necessary.  Is that it?

More or less. I've not read Bastiat though - only Hazlitt's explosion of the fallacy.

-Jon

Freiheit:

Bastiat claims that in the broken window situation, the shoemaker goes without profit, but really the ₣6 doesn’t just disappear into a black hole when the glass-maker gets ahold of it. The glass-maker could just as easily use that ₣6 to buy a pair of shoes.

The glass maker isnt making 100% profit on the 6 franks. He is probably spending 5 to replace the window and pocketing 1 as profit.

There is no way the glass maker could buy the pair of shoes.

Freiheit:

Bastiat isn't saying that one broken window is a net loss to society,

He is saying its a net loss.

A brand new pane has to be made and consumed in order to repair the window. If the baker's window had remained unbroken that new pane could have been used to build a new house and actually create wealth.

Good point.  You're right.

Freiheit:

Broken Window Scenario
Shopkeeper = one unbroken window (because the glassmaker replaced it)
Glassmaker = one window pane sold, one pair of shoes gained
Shoemaker = one pair of shoes sold

Not quite correct.

Shoemaker:
  + one pair of shoes sold
  - money to pay for broken window

The entirety of the benefit to the Glassmaker is balanced by the negative to the Shoemaker (who pays for this "benefit"). So you may as well some the situation up (after cancelling these two out):

Unbroken Window Scenario
Shopkeeper = one unbroken window, one pair of shoes gained
Shoemaker = one pair of shoes sold

Broken Window Scenario
Shopkeeper = unbroken window
Shoemaker = pair of shoes sold

You can see in the broken window scenario that there is now a pair of shoes missing. This is basically what the Shoemaker has had to use to pay for the broken window. Ultimately, money is just a goose chase. We pay for everything with our labour.

Hmm but the windowmaker does gain, right? The point is that there is no gain in excess of a situation where the window is unbroken, or am I wrong?

-Jon

Bastiat framed it as a young boy breaking the window.  And then boy is told directly or indirectly that he has helped the economy. And thus a moral hazard occurs in which vandalism either is considered righteous or that absurd double standards exist in other situations involving the destruction of property.  The young boy represents the values of those who do not have any vested interest in property in general.

JohnSchreimann:

Bastiat framed it as a young boy breaking the window.  And then boy is told directly or indirectly that he has helped the economy. And thus a moral hazard occurs in which vandalism either is considered righteous or that absurd double standards exist in other situations involving the destruction of property.  The young boy represents the values of those who do not have any vested interest in property in general.

The story is not about private property. It's an absurd on the chain effect of spending that are used to justify less obviously destructive things such as subsidies; Bastiat did several such stories showing economic non-sense. It shows a case where resources are being wasted for no social good. The shop owner is wasting his work for no good for him. And, of course, the glass maker benefits, at least in the short run, as he would benefit would he just stole the money from him. If there isn't much work for glass makers however, society would be better off having some of them working on something else, and the price structure will motivate producers to use resources more wisely.

Jon Irenicus:

Hmm but the windowmaker does gain, right? The point is that there is no gain in excess of a situation where the window is unbroken, or am I wrong?

No, there is a loss relative to the unbroken window situation.  Yes, the windowmaker gains, but his gain is less than the loss of the shopkeeper.  How do we know?  Because if, in this situation, the windowmaker gains more than the shopkeeper loses, then the following business model would work:

Windowmaker calls shopkeeper and asks how much compensation he would request if the windowmaker broke his window and sold him a new one.

Shopkeeper names a price.  Windowmaker pays that price, then breaks the window and sells him a new one.

The problem is - if the window costs $100, the gain of the windowmaker is $100-his costs.  The loss of the shopkeeper is $100+opportunity cost. 

Jon Irenicus:

Hmm but the windowmaker does gain, right?

Quite possibly... but if I steel your wallet then I gain as well. If that was the only thing that was mentioned about such a theft then we'd be turning a blind eye to the fact that you'd just lost your wallet. So yes, the broken window could result in a benefit to certain individuals (just as does theft). However the system as a whole will be down by the opportunity cost of whatever else could be done with people's labor if they weren't fixing broken windows (for example, if the glass maker was making a window for the shoemaker's new offices instead).