Sunday, April 18, 2010

Is there profit in the destruction caused by the Volcano? Here is a reminder from Bastiat about that...

Frederic Bastiat wrote about "The Broken Window Fallacy" in the mid-1800's.  It is still applicable today and it STILL is misused by politicians, and the public alike, to equate damage/destruction to "encouraging industry". Be on the look-out in the media for suggestions that "there may be profit in destruction".  I am certain you will see many references...
Have you ever been witness to the fury of that solid citizen, James Goodfellow,*1 when his incorrigible son has happened to break a pane of glass? If you have been present at this spectacle, certainly you must also have observed that the onlookers, even if there are as many as thirty of them, seem with one accord to offer the unfortunate owner the selfsame consolation: "It's an ill wind that blows nobody some good. Such accidents keep industry going. Everybody has to make a living. What would become of the glaziers if no one ever broke a window?"

....From which, by generalizing, we arrive at this unexpected conclusion: "Society loses the value of objects unnecessarily destroyed," and at this aphorism, which will make the hair of the protectionists stand on end: "To break, to destroy, to dissipate is not to encourage national employment," or more briefly: "Destruction is not profitable."
What will the Moniteur industriel say to this, or the disciples of the estimable M. de Saint-Chamans,*3 who has calculated with such precision what industry would gain from the burning of Paris, because of the houses that would have to be rebuilt?
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