The Broken Window Fallacy

The Broken Window: Presentation

Now that you've finished reading Chapter 2, watch the two-minute presentation below. After finishing the presentation, read Chapter 3.

The Blessings of Destruction

In Chapter 3, Hazlitt talks about post-war arguments that the destruction caused by World War II was a good thing. As he writes, this "is merely our old friend, the broken-window fallacy, in new clothing, and grown fat beyond recognition." It's obvious that a broken window isn't going to increase a town's wealth, so it should be even more obvious that the destruction of an entire town won't increase wealth.

Hazlitt's example is many decades old, but this fallacy is still prevalent today. After Hurricane Sandy, economist Peter Morici argued that, although many individuals would have their lives disrupted, the damage caused by the hurricane would create many positive outcomes. It would provide work for the construction industry and would allow businesses to rebuild in a more attractive manner. Old, shabby restaurants would become new, vibrant eateries, and small homes would be rebuilt as larger houses. You often hear many similar arguments after natural or manmade disasters.

These are just dressed-up versions of the broken window fallacy. Perhaps it comes from a desire to look on the bright side of things, but there is no bright side to disaster and destruction. Writing about how the destruction of their homes will help the construction industry is no comfort to families stricken by disaster. Our efforts are best directed toward offering the victims tangible help rather than attempting to show them a nonexistent bright side of disaster. Yes, they may still have other blessings in life, and they may very well fully recover and eventually be better off than before—but these things will happen in spite of the disaster, not because of it.

As you read about the broken window fallacy and watched the presentation, you may have thought that it was incredibly obvious that a broken window was not a good thing. Why would we waste so much time explaining that fact? Hopefully, after reading Chapter 3, you can see why it's important to understand why such an obvious truth is, in fact, true. As situations become more complex, it can be easy to forget the simple truths that apply to those situations. When we understand basic truths and what makes them true, we can more easily apply those truths in complex situations.