It It is fitting that the Mises Institute is releasing the Bastiat Collection on the two-year anniversary of Hurricane Katrina. Though hundreds of years have passed since Frédéric Bastiat, the beauty of sound economic reasoning is that it does not change over time. In particular, his essay, “That Which is Seen, and That Which is Not Seen,” is especially insightful in analyzing the rebuilding of the Gulf Coast. In first expounding his lesson and then applying it to the conflict between the private and public sectors, this article seeks to attack the fallacies of government spending and vindicate the free market.
No one questions the need for rebuilding after Katrina, and few would go so far as the imbecilic economist to praise the hurricane, but there is still the question of who is to do the rebuilding. With a virtually unlimited purse, the government’s approach to reconstruction is necessarily wasteful, bureaucratic, and inefficient. As Ludwig von Mises noted, the problem with bureaucracy is that consumer demand is subservient to meaningless rules, edicts, and red tape. Through this lens, it is not difficult to understand the reason behind the inefficiencies of local, state, and federal government agencies. FULL ARTICLE