Argumentation & Debate

Re: The Broken Window Fallacy

Ned Netterville — Thu, 09 May 2013 21:21:28 GMT

Right you are. And instead of a suit, the butcher might have hired the glazier for the same $100 he would have spent to fix the broken window and instead use it to replace the old windows in his home with new energy efficient windows. The exact same results would flow from hiring the glazier to fix the broken window as will flow from purchasing new windows for his home instead. Now, however, not only will he have his store window intact, but the new windows at his home will save him money that would otherwise be spend on heating bills. With the money saved he may start a small computer business in his garage, which will grow into Apple computer employing millions, boosting the productivity of hundred of thousands, enriching the pension plans of tens of millions more and increasing GDP exponentially--all because the snarky little socialist spared the window and missed out on creating the non-existent multiplier effect that statists believe in..

Re: The Broken Window Fallacy

nhsingh — Thu, 02 May 2013 04:49:33 GMT

[quote user="Malachi"]Its not a fallacy, it just describes how markets make everyone richer even when bad things happen. The fallacy is thinking that bad things wont happen.

[/quote] The Broken Window "Fallacy" actually describes the case of misguided thinking that because of the economic chain of events of repairing damage, communities benefit.

Logically we need to define it and exemplify it: Let's Monroe throws a brick at the local butcher shop and breaks a window. Some townspeople might crowd around castigating him. Suddenly another townsman raises his voice in the group and says "Hey! Don't you see that the butcher will use money to get a glass repair man? And that repair service will pay the glass makers and the truck manufacturers? The money flow will keep going, and our community will be better off because of it! We need to be praising this kid for breaking the butcher's window!"

Well what is wrong here? Remember Bastiat's old assertion "That Which Is Seen..."? Well, he asserted that there are always unintended consequences - other realms of possibilities that were taken away because of some incident. Think of it like this, let's say the butcher's window wasn't broken (and the money spent on window repair was $100.00). The butcher could have used that $100.00 to buy... a suit! And the money spent on the suit would flow to the tailor...which would flow to the weaver... or the materials manufacturer etc etc.

In the first situation, where the window was broken by Monroe, the butcher spends $100.00 to fix the window. In the second, the butcher doesn't need his window fixed...plus he buys a suit!

Situation 1: Butcher has window Situation 2: Butcher has window + suit!

Which situation is ultimately more beneficial? Situation 2!

Under the Broken Window Fallacy, natural disasters like Super storm Sandy would be a good thing! with all the repair needed to be done, why not right?! But as we have just logically unraveled, the unseen benefits are eliminated with this disaster. It's all about allocation of resources...

Re: The Broken Window Fallacy

Ned Netterville — Thu, 02 May 2013 02:41:33 GMT

Naah. Read it again. It's a fallacy.

Re: The Broken Window Fallacy

Malachi — Sat, 03 Nov 2012 18:48:53 GMT

Its not a fallacy, it just describes how markets make everyone richer even when bad things happen. The fallacy is thinking that bad things wont happen.

The Broken Window Fallacy

wallstreetatheist — Fri, 02 Nov 2012 07:35:36 GMT

Debate on the broken window fallacy!