The Broken Window Fallacy

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This fallacy technically says that destruction helps the economy. For example, a hooligan decides to throw a brick at the window of a bread shop, and in result, forced by the circumstances, the baker will have to buy a new window. Hence, it will mobilize money, because now the man of the window will be able to buy crops with that money, and the man with the crops will be able to buy something else, etc. As good as this sounds, it is illogical to imagine a whole city burning and call it prosperity.

The second part of this fallacy explains that the baker would have bought a new suit instead of a new window, if the hooligan wouldn’t have broken the window. This means that what is not seen is the prosperity that would have been created if the window wouldn’t have been broken. A society grows with the acquisition of goods, not with the destruction of them.

What is seen is the broken window, what is not seen is the suit. Not only would the baker have his window, but also his new suit, making him richer in goods. Nonetheless, even without the broken window there would have been economic growth.

This happens in almost every area of society, if not in all. For example, people are always worried about the fact that technology is growing. They say that robots will substitute humans, and therefore jobs will be lost. What they don’t see is the cheaper prices went, because of the facility of obtaining more for less. In one side they want more jobs, but in the other side they want cheaper prices. It has been proven that more jobs doesn’t necessarily mean greater economy. As a matter of fact, it has been proven that a better developed work area increments the economy more than hundreds of jobs.

Think about this, what if making water bottles was to its highest potential, the prices would go booming down. Yes, some lost their jobs, but they would inevitably find another one. A society with technology creates entrepreneurs. Technology gives us the chance to innovate. Instead of doing the same thing every day, sticking to your same job for the rest of your life, you are given the chance to create something that can improve society. This is why it has become easier to obtain things that were almost impossible to reach, or why you can get from one place to another faster. Admit it; we prefer a faster, more productive, cheaper society, and technology has given us that chance.

Technology and the window are not the only things that are seen and unseen, but a whole big gap of the society has this. We have been accustomed and raised to only see what may seem obvious, hindering our creativity and learning ability. We must get out of the nest or that bubble that stops us from truly growing, and we must go back to the origin.

Categories: Economics | Tags: , , , | 1 Comment

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One thought on “The Broken Window Fallacy

  1. Pingback: Taxes on the Broken Window Fallacy | JADAS BLOG

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