Rating is available when the video has been rented.
This feature is not available right now. Please try again later.
Published on Jun 23, 2011
Does destruction create jobs? After natural disasters, terrorist attacks, and wars, some people argue that these disasters are good for the economy, because they create jobs and prosperity. Learn more: http://bit.ly/1HVAtKP
As Prof. Art Carden of Rhodes College explains, this is an example of the "broken window fallacy," a term coined by Frederic Bastiat. When a shopkeeper's window is broken, he will spend money on a new window, which gives income and jobs for glaziers. This activity is "seen," but the "unseen" is just as important: the money spend on a new window could have been spent on other things. Wealth has not increase, but only reallocated from some people to others, and society is worse off by one window.
LEARN LIBERTY Your resource for exploring the ideas of a free society. We tackle big questions about what makes a society free or prosperous and how we can improve the world we live in. Watch more at http://bit.ly/1UleLbP