Scaling geologic time to (say) one year, homo sapiens has existed for less than an hour. In that twinkling of an eye, we have developed some capacity for foresight – an enormous evolutionary leap in one of nature’s creatures. The basic theory of evolution excludes a role for it, with nature falling back on the more mundane learning process of experience, with its multiple trials and errors.
But what exactly does foresight mean?
A useful starting point was identified by the French economist, Frederic Bastiat. He argued that longer-term policy insights, as opposed to immediate impressions, come from one of two masters: experience and foresight.
In his words, “Experience teaches effectually, but brutally. It makes us acquainted with all the effects of an action, by causing us to feel them.”
Bastiat invited us, where possible, to substitute the gentler teacher, foresight, with the objective of sparing us the worst consequences of ill-judged actions.
By this, he means considering what is ‘not seen’ (for example the longer-term series of effects of a specific government policy), to help put into context what is ‘seen’ (the immediate impact of a policy perturbation to the status quo ante).
His Parable of the Broken Window showed how immediate effects may bring small benefits but mask a future large evil. Conversely, good government decision-making may well come at a small immediate cost but bring substantial benefits to society at a later stage.(Here he Is re-expressing a central argument in Burke’s Reflections on the Revolution in France.)
More generally, foresight is about looking for the connecting chains that link events. It may be a challenging activity, but seeing these connections is what can help us to avoid the worst effects of the tougher master, experience.
Bastiat was writing in tumultuous times, the first half of the nineteenth century. He would have been acutely aware of contemporary upheavals in society. Given the much shorter life expectation of that era (Bastiat himself died at 49 years of age) it might be thought natural that short-term thinking would dominate his approach. Yet he had enough foresight to step back and look beyond the news, inviting us to consider the potential longer-term and wider impacts of change on society.
Today, we are confronted with what amounts to a new wave of societal challenges to established routines. One example is the threat to free trade from a new wave of tariffs. Another is re-invigored militarism. What might Bastiat have advised?
In his Parable of the Mayor of Énios, the local mayor concludes that, as tariffs are alleged to be positive for France to protect employment, they must also be good for the local town. Thus, he suggests to the townsfolk that they impose tariffs on all ´foreign´ imported goods (French or otherwise). The regional governor is not amused, over-ruling the idea and arguing that only the nation-state can impose such restrictions on trade. Énios should stay narrowly focused and enjoy the benefits of free trade with its surrounding towns, forgetting the bigger picture. The twist is, of course, that the governor is forced to defend free trade within the country while opposing it at the national level.
The message in the story goes beyond trade. Narrow and inconsistent thinking is little more than the blind leading the blind, with everyone losing sight of the bigger picture. In a modern context and with reference to the GFC, the Fellows of the British Academy referred to the phenomenon as “a failure of the collective imagination”, which as we know led to devastating unforeseen consequences.
Bastiat also opposed the colonization and military interventionism of the great powers at the time, noting the ‘unseen’ connection between military spending and taxation. He argued that taxation amounted to the hidden enemy:
“There is then, only one means of diverting from this country the calamities which menace it – that is to equalise taxation. To equalize it, we must reduce it. To reduce it we must diminish our military force. For this reason, amongst others, I support with all my heart the resolution in favour of a simultaneous disarmament (of the UK and France).”
To be clear, this was not passivism in disguise – Bastiat argued for a smaller, specialised army and a well-equipped citizen´s defence force. It was the deadweight loss (too often literally) of military expansion (especially to Algeria) that he opposed.
History does not repeat itself, but as Mark Twain noted, it often rhymes. Moreover, today´s world is arguably more complex than the world of two centuries ago. That said, complex problems do not necessarily imply we cannot employ some foresight to help us. In that vein, it might just be worth a re-read of a set of Bastiat´s parables in Washington, given its roots in the French liberal tradition – it might even help to foresee and avoid some of the castigations of that rougher teacher – experience.