Re[2]: Re[2]: IRS regulations in business

Guru George (
Sat, 26 Jul 1997 22:15:18 +0100

On Fri, 25 Jul 1997 21:01:21 -0400
"Abraham Moses Genen" <> wrote:

>>From: Guru George <>
>>Subject: Re[2]: IRS regulations in business
>>Date: Friday, July 25, 1997 4:53 PM
>>On Fri, 25 Jul 1997 12:34:06 -0400
>>"Abraham Moses Genen" <> wrote:
>>>Leave it to say that I sincerely
>>>believe that all forms of laborers deserve some sort of substantive
>>>net. This, believe, is part of our social contract.
>>In the abstract, of course you are right. Where I would disagree with
>>you is that your legislative activities pre-empt, and destroy the
>>possibility of, people building their own safety nets together, and
>>building a real sense of communal solidarity, with the money they would
>>have had if you hadn't appropriated it from them in taxes. Not to
>>mention the fact that self-help builds self-esteem and the confidence to
>>challenge abuse.
>>Have you ever heard the story of the broken window, BTW?
>Actually, I have never heard the story of the broken window. Please
>enlighten me.

OK, here's the story of the broken window:-

"A young hoodlum, say, heaves a brick through the window of a baker's
shop. The shopkeeper runs out furious, but the boy is gone. A crowd
gathers, and begins to stare with quiet satisfaction at the gaping hole
in the window and the shattered glass over the bread and pies. After a
while the crowd feels the need for philosophic reflection. And several
of its members are almost certain to remind each other or the baker that,
after all, the misfortune has its bright side. It will make business
for some glazier. As they begin to think of this they elaborate upon
it. How much does a new plate glass window cost? Two hundred and fifty
dollars? That will be quite a sum. After all, if windows were never
broken, what would happen to the glass business? Then, of course, the
thing is endless. The glazier will have $250 more to spend with other
merchants, and these in turn will have $250 more to spend with still
other merchants, and so ad infinitum. The smashed window will go on
providing money and employment in ever-widening circles. The logical
conclusion from all this would be, if the crowd drew it, that the little
hoodlum who threw the brick, far from being a public menace, was a
public benefactor.

"Now let us take another look. The crowd is at least right in its first
conclusion. This little act of vandalism will in the first instance
mean more business for some glazier. The glazier will be no more
unhappy to learn of the incident than an undertaker to learn of a death.
But th shopkeeper will be out $250 that he was planning to spend for a
new suit. Because he has had to replace a window, he will have to go
without the suit (or some equivalent need or luxury). Instead of
having a window and $250 he now has merely a window. Or, as he was
planning to buy the suit that very afternoon, instead of having both a
window and a suit he must be content witht the window and no suit. If
we think of him as part of the community, the community has lost a new
suit that might otherwise have come into being, and is just that much

"The glazier's gain of business, in short, is merely the tailor's loss
of business. No new "employment" has been added. The people in the
crowd were thinking only of two parties to the transaction, the baker
and the glazier. They had forgotten the potential third party involved,
the tailor. The forgot him precisely because he will not now enter the
scene. They will see the new window in the next day or two. The will
never see the extra suit, precisely because it will never be made.
They see only what is immediately visible to the eye."

This is from Henry Hazlitt's "Economic in One Lesson". The lesson?
"The art of economics consists in looking not merely at the immediate
but at the longer effects of any act or policy; it consists in tracing
the consequences of that policy not merel for one group but for all

See, the trouble with your position is this. The money you use to do
your thing has been taken from people. (In the best possible cases) the
thing you've done seems to have had some visible benefit; but what is
invisible is the other stuff people could have done with the money you
took off them in taxes. Think about it.

>Your thesis about self-actualizing safety nets is interesting and may
>even be valid to some extent. What concerns me, however, are all the
>people who lack the knowledge, skills and abilities to self-actualize
>themselves. The increase each year in the number of individual
>bankruptcys speaks for itself. Don't we have an obligation to help each

We certainly do - a moral obligation. And how, may I ask is that obligation discharged when
money is extorted from us in taxes and used by *somebody else* to help
others? Since the money is not given voluntarily (just try to withold
it!) we cannot be acting morally when we are handing over our well
earned dosh, can we? And this despite the fact that (again, in the best
possible case) it is going to be used to help others.

And there is the further consideration that very little of it will
*actually* be used to help anybody. Most of it wil be used to pay the
wages of people like you. Well, it's no wonder you've got an interest
in the continuation of statism, is it?

But I tease. Really, it does you credit that you are concerned enough
about other people to go out and do something about it. My beef is,
because of the above-described scenario of "what is seen and what is not
seen" (the original title of an essay by Frederic Bastiat, from whom
Hazlitt took the story of the broken window), you are doing it in a way
that destroys more than it creates - much as someone who should putty up
the cracks in the windows of his house, while leaving the front door wide

The unacknowledged *principle* behind the *manner* in which you are
going about helping people is so corrupt, that you are in effect taking
one step forward and two steps back.

Guru George