The Blessing of Broken Windows in the Wake of Japan’s Devastating Earthquake - Page 2
Henry Hazlitt, in his profound book on the nature of opportunity cost called Economics in One Lesson, explains the broken window fallacy by teaching us that the apparent benefits of a broken window, which are the profits of a glazier and the trickle down of created employment, are the direct result of the lost opportunity of the person that has to replace the window and that there is no real economic benefit. In fact, we are worse off since the $250 could have gone towards buying a new suit which means that the textile industry’s future profit has been lost to the glazier. Thanks to the precarious hoodlum that broke the window, the economy is less one suit.
My intention is simply to see that the discourse of global news acknowledge opportunity cost. While I understand that optimism is essential to attracting and maintaining capital investment I believe the purpose of these messages should not be skewed. A news article that reports that “Japan’s economy will be strong in the construction industry due to the reallocation of government spending from future investment projects to restoring infrastructure” affords us the same degree of confidence and gives us a broader perspective of the true cost of disaster.
It would seem clear to me that what Japan would rather some steak from the butcher than broken lives caused by broken glass.