French economist Frédéric Bastiat (1801–1850) wrote a pamphlet titled Ce qu’on voit et ce qu’on ne voit pas (What is Seen and What is Not Seen) where he demolishes the make-work fallacy in economics. When Jacques Bonhomme’s child breaks his window, paying for a replacement will circulate money in the economy, and stimulate the glassmakers’ trade. This is the visible effect. Bastiat urges us to consider what is not seen, i.e. opportunity costs, such as other, more productive uses for the money that are forgone due to the unexpected expense. This lesson is still relevant. The cost of repairing New Orleans after Katrina, or cleaning the Gulf after Deepwater Horizon, will cause a temporary boost in GDP statistics, but this is illusory and undesirable, another example of how poorly conceived metrics can distort thinking.
Another example is that of electric cars. Advocates for the blind have raised a ruckus about the dangers to blind people from quiet electric cars they cannot hear or dodge. Nissan just announced that their Leaf electric car will include a speaker and deliberately generate noise, in part to comply with the Japanese Transport Ministry’s requirements. To add injury to insult, the sound selected is apparently a sweeping sine wave, a type of sound that is incredibly grating compared to more natural sounds, including that of machinery.
Unfortunately, this is illustrates the fallacy Bastiat pointed out. Authorities are focusing on the visible (well, inaudible) first-order effect, but what is not seen matters as much. Most urban noise stems from transportation, and that noise pollution has major adverse impact on stress levels, sleep hygiene, and causes high blood pressure and cardiac problems from children to adults to the elderly. According to the WHO, for 2006 in the UK alone, an estimated 3,000+ deaths due to heart attacks can be attributed to noise pollution (out of 100,000+).
These figures are mind-boggling. For a country the size of the US, that probably comes around to five or six 9/11 death tolls per year. Quiet electric cars should be hailed as a blessing, not a danger. There are other ways to address the legitimate concerns of the blind, e.g. by mandating transponders on cars and providing receivers for the blind.