The Broken Window Fallacy
August 30th, 2004 by 
independence
After Hurricane Charley, and doubtless after Hurricane Frances should it prove destructive, we will be told in the press about the economic benefits of the damage, in that spending on repairs is considered an economic stimulus.
This is, of course, nonsense - the destruction creates great economic loss for society as a whole, although of course the repair industry benefits. This chestnut continues to reappear time after time, despite its continued rebuttal. The most famous essay on this subject is by Frederic Bastiat, dating from 1850. Enjoy. That Which is Seen, and That Which is Not Seen
Posted in Economics, The Economy | 