The Seen and the Unseen - The basics of economics

The basics of economics
I finished reading the book “Economics in One Lesson” by Henry Hazlitt in two days. That good it was! It is a well-written book on the basics of economics. By exposing economic fallacies and failures of economic policies, it explains the science of economics in an engaging way.
The main premise of the book is that when you look at the economic policies, you should look beyonds first-order, most direct consequences; one has to consider not only one group that the named policy would benefit. All groups should be considered when a policy is suggested. And one should analyze not only short-term effects of the policy but also its long-term consequences.
The book which is based on the essay “What is Seen and What is Not Seen” by the French economist Frederic Bastiat starts with the example from that essay. Imagine a town where a boy breaks the windows of a baker. Public first condemns the boy. But eventually some individuals begin to look at the perpetration from a different angle. That baker’s window is broken means that there’s new business for the glassmaker. The cost of the window, say, $5 is revenue for the glassmaker. Now that the latter has additional $5, he will spend it on something else. Let’s say he’ll buy a tray from the potter. The potter, the argument continues, will spend it on something else. Thus, the broken window results in economic activity by entering $5 into the circulation. And the boy is regarded as a hero not a felon.
But this is only one, most obvious aspect of the problem; this is “what is seen”. There’s also what Bastiat calls “what is not seen”. The $5 that the baker will have to spend on the broken window had been planned for a new suit. The boy created business for the glassmaker but he deprived the tailor of the same amount. Now the tailor has no new business. If he had those $5, he’d spent it on something else, say, buying apples from the farmer. Thus, the effect of those $5 that entered the circulation with the broken window is nullified when we look at it from a different perspective, from the angle of “what is not seen”.