Backgrounder: A Council Learns a Lesson — Almost

July 12, 2017

by Craig Ladwig

A rare enlightening discussion broke out at my council meeting last night. A councilman repeatedly challenged an opponent on an economic-development issue to say how he would have cast a hypothetical vote in the past. “Answer the question,” he demanded, trying to pin the councilman as being against a popular civic venue, a baseball stadium.

The other councilman responded that it was easy to hold up “shiny new objects” as successes but it was difficult to see how their funding had been stolen from other “unseen” efforts. The discussion then quickly returned to the standard councilmanic mundane with members blithely and overwhelmingly approving millions in new taxes.

That was too bad, because the one councilman had broached an almost 170-year-old concept, one that forms a basis of modern economics.

First stated in Frédéric Bastiat’s 1850 essay, “Ce qu’on voit et ce qu’on ne voit pas or” (What is Seen and What Is not Seen), it entered the popular American discussion with Henry Hazlett’s 1946 work, “Economics in One Lesson.” Hazlett reduces economics to just one paragraph, which is:

“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 merely for one group but for all groups.”

If we back up to the specific argument of the council meeting, it was the most perfect point that could have been raised in advance of this particular vote. To be decided, you see, was whether my council should impose a tax increase to finance a supposed economic-development project, a riverfront development and promenade that promised to make our city a tourist “destination point.”

Nobody, of course, can be against being turned into a destination point. Bastiat, Hazlett and the one councilman, however, first would have wanted to know: 1) compared with what; 2) at what cost; and 3) on the basis of what hard evidence. Nor had serious thought been given to which groups would benefit or be punished as the tax increase and consequent spending wound its way through the political mysteries of the next decade or so.

Those questions, sadly, were unanswerable, or at least unanswerable in the time the council members had allotted for discussion of eventually spending someone else’s $20 million to $60 million (the exact figure being uncertain).

Nonetheless, it would have been interesting to know the answers. Perhaps the council will appoint a committee to look into it. Or perhaps the wrong councilman was demanding, “Answer the question.”

Craig Ladwig is editor of the quarterly Indiana Policy Review.


Leave a Reply