In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.
There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.
Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil.
Frédéric Bastiat, "That Which Is Seen and That Which Is Unseen"
Posts
And thus my disgust for companies that push for the "quarterly stock report" which is the small present good, often followed by "great evils".
ReplyDeleteIn the case of industrial facilities this can turn into deferring maintenance to bump 4th qtr stock prices, risking catastrophic failures (including human lives) in the not-so-distant future.