Or, is this what will be left when he's done?

Or, is this what will be left when he's done?

Thursday, March 5, 2009

Because he doesn't understand the broken window fallacy.


Let's say that we have a nice suburban area sort of like we have here in Washington, DC, out in Chevy Chase. And we have some guy there who has a nice picture window, and some kid goes by, a hoodlum, and throws a rock through that window, breaks it. And let's say that it costs $500 to replace that window. Well, our first reaction might be: What a horrible thing. Let's catch the perpetrator." But what if somebody else came up and said, "Wait a minute. The window's been broken, some time has elapsed, we haven't caught the guy, but maybe we shouldn't catch him to throw him in jail. Maybe we should catch him to pat him on the back. Because I've observed what's happened in that house and what's happened is this: He broke the window, but the guy who had the window broken called up the glassmaker and the glassmaker put the window in and installed it for $500. Then the glassmaker took that $500 and bought a DVD player. He also bought a couple DVDs. And then he bought a reclining chair to sit back and watch the movies, all with that $500. So that broken window has generated business and now we have more DVD sales, more reclining chair sales, and it's generated business all around town. So isn't this a good thing?"

Where's the problem with this argument? The valid point here is that the guy whose window was broken also might have wanted to buy a DVD player and a reclining chair. Or he might have wanted to buy a suit of clothes and some insurance. So that guy, and the tailor, is out $500 because instead of buying a suit and a shirt, he now had to pay for the window. You never generated real business because the guy who had the window broken is out $500 and the guy who had replaced the window is up $500, but the guy who had the window broken would have also been spending $500. So there's really no net gain. Hazlitt called this the broken window fallacy.

http://www.academia.org/campus_reports/2002/summer_2002_3.html

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Please keep it clean. If you are a liberal, please try and restrain yourself from using the fear, racism, and other Chicago-style tactics currently in use to advance your unholy cause. Better yet, browse on over to monster.com and get a job - it's not possible for everyone to be on welfare.