Despite “Expert” Analysis Destruction Can’t Stimulate Economic Growth

Now that Hurricaine Irene has passed we can fully see the destruction she has left behind. But along witt he physical destruction comes a destruction of academic thought through the distortion of the parable of the broken window. The parable of the broken window shows in simplistic terms how physical destruction of property can never be beneficial to the community as a whole.

The parable tells the story of a community focused around the recent destruction of the front window of a bakery. The baker is distraught over the destruction of his property, but the politician sees the opportunity to secure a vote and steps in. The politician explains that even though the window is broken the community as a whole will benefit from the destruction. The glazier will have to repair the window, generating a job for the glazier. The glazier will then take the money he made and spend it, furthering the economic stimulus. The politician now exclaims that although this was a tragedy there will be more jobs, more production, and more economic stimulus because of the broken window. And in every tragedy we hear this same myth repeated.

“Ghastly as it may seem to say this, the terror attack, like the original day of infamy, which brought an end to the great depression could do some economic good” said Nobel Prize winning economist Paul Krugman shortly after 9/11.More recently there are examples of the same sentiment like the Aug 28 article in Politico “Hurricane Irene an Economic Blow or Boost”, in which a case is made for short-term GDP growth in hurricane affected areas.

Although this argument is very prevalent in the media, it is rarely questioned. Everyone agrees that the massive destruction that was WWII brought America out of the great depression. But it didn’t, and destruction can never bring prosperity. The problem that these economists, advisors, experts, and politicians have is the unseen costs of stimulus. Going back to the parable of the broken window, our politician pointed out that the money spent by the baker fixing his window will stimulate the economy, and he’s right. But if the window were never broken the baker could have spent his money on a new suit, and still have a working window. But because of the destruction of his window he can no longer buy that new suit which takes a job away from the tailor, and so on. After all is said and done the community lost one working window.

If destruction and war caused economic growth then the simple solution to the recession we’re in would be to build millions of tanks and planes and sink them in the ocean. After all isn’t that what war does? It takes limited resources and destroys them. If Hurricane Irene helped the economy then it stands to reason that it would have helped five times more if it were a category five hurricane. And it’s here that we can see the lunacy of those who proclaim that growth can come from destruction.

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