View source for Important classes of exceptions to the broken window fallacy.
From Critiques Of Libertarianism
Jump to:
navigation
,
search
<!-- you can have any number of categories here --> [[Category:Mike Huben]] [[Category:Broken Window Fallacy]] {{DES | des = [[Frederic Bastiat]]'s [[Broken Window Fallacy]] claims to show that claims of benefits to destruction are wrong. But there are plenty of reasons why there can be strong benefits to destruction: so strong that rational economic actors destroy things all the time. | show=}} <!-- insert wiki page text here --> == Suboptimal Usage == A simple example is my neighbor's house. It was razed to the ground, and then rebuilt to huge benefit. My neighbor sold the house to a contractor for $400,000. The contractor spent $400,000 more to demolish the house and build two enormous condos on the site. He sold the two condos for $600,000 each, making a total of $400,000 profit. If a firebug had burned the house down instead, the economics would be much the same: maybe even less if it saved costs for the demolition. One of the assumptions in the Broken Window parable is that the window is replaced with the same window. But it could be replaced with a better window: nowadays one that is more energy efficient. That could easily pay for the value of the broken window by itself. So we don't need to expect waste from a broken window unless for some reason we think it is already an optimal window. Suboptimal usage of resources is all around us: throwing them away and replacing them with more efficient usage is often rare enough that a "broken window" situation might improve things. My neighbor could have used her property for the two condos for decades: the land was underutilized. There are tons of appliances such as lightbulbs, refrigerators and heaters that are so inefficient that their replacements would easily pay for themselves. Yet consumers tend to be ignorant, satisfied, or not willing to make the investment until government programs encourage them to. Other examples of this principle (fixing suboptimal usage) include: * Any renovation. * "Creative destruction" in capitalism, where existing firms are destroyed in competition. * Redistribution of land to those who will use it, as during the American Revolution. * Redevelopment of Europe after WWII destruction. == Externalities And Risks == A simple example is a building that cannot be brought up to fire codes. It imposes risks (which are also externalities) on other adjacent buildings and also risks to firefighters. It might well be optimal to demolish the building even if it will not be rebuilt: and indeed we see examples of that in numerous cities. * Requiring environmental safeguards (emissions controls, etc.) * Safety requirements for employees.
Template:DES
(
view source
)
Return to
Important classes of exceptions to the broken window fallacy.
.
Navigation menu
Views
Page
Discussion
View source
History
Personal tools
Log in
Search
Search For Page Title
in Wikipedia
with Google
Translate This Page
Google Translate
Navigation
Main Page (fast)
Main Page (long)
Blog
Original Critiques site
What's new
Current events
Recent changes
Bibliography
List of all indexes
All indexed pages
All unindexed pages
All external links
Random page
Under Construction
To Be Added
Site Information
About This Site
About The Author
How You Can Help
Support us at Patreon!
Site Features
Site Status
Credits
Notes
Help
Toolbox
What links here
Related changes
Special pages
Page information
Guidelines To Create
Indexable Page/Quote
Indexable Book/Quote
Indexable Quote
Unindexed
Templates
Edit Sidebar
Purge cache this page