Tuesday, August 04, 2020

Bastiat's Broken Window Fallacy (Super Succinct Video)

Re-posted by Nicholas Stix
366,368 views
•Jun 23, 2011
Learn Liberty
234K subscribers

Does destruction create jobs? After natural disasters, terrorist attacks, and wars, some people argue that these disasters are good for the economy, because they create jobs and prosperity. Learn more: http://bit.ly/1HVAtKP

As Prof. Art Carden of Rhodes College explains, this is an example of the "broken window fallacy," a term coined by Frederic Bastiat. When a shopkeeper's window is broken, he will spend money on a new window, which gives income and jobs for glaziers. This activity is "seen," but the "unseen" is just as important: the money spend on a new window could have been spent on other things. Wealth has not increase, but only reallocated from some people to others, and society is worse off by one window.





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1 comment:

Anonymous said...

But doesn't insurance pay for it?The question is,does the store owner's premium increase--and offset the window replacement?Can he get insurance at all--to stay in business?
--GRA