The Broken Window Fallacy
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Can you please assist with the following questions below?
Read Chapter II "The Broken Window" and Chapter III "The Blessing of Destruction"
1. Use your own words to summarize the main idea of the broken window fallacy.
2. Choose three of the economic terms and define what you believe have particular application to the chapters. What are they? Describe how each term relates to the chapter.
3. Which one of the five "big ideas" is represented by the broken window fallacy? Explain.
4. Give a current example of Henry Hazlitt's ideas. What lessons can be learned?
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This answer provides you an excellent discussion on the broken window fallacy
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Can you please assist with the following questions below?
Read Chapter II "The Broken Window" and Chapter III "The Blessing of Destruction"
1. Use your own words to summarize the main idea of the broken window fallacy.
The broken window fallacy was created by Fredrick Bastiat. The fallacy is that when a shopkeeper James Goodfellow saw his saw his son break a pane of glass he became very angry. The observations of most of the onlookers were that the breaking of the glass pane brought business to the glazier and so was good for the economy. The breaking of the pane led to the circulation of money in the economy and so was healthy. What they failed to realize was that the six francs that James spend on getting the glass pane repaired would have been spent otherwise on replacing his old shoes, or would have purchase a book for his library. In short the breaking of the glass pane prevented James from spending money on a book or shoes; the fallacy was committed by the onlookers who only considered the benefits of buying a new window pane. They never thought about the cost to the shopkeeper. The shopkeeper was prevented from spending money on something else. So even though the action of James benefited the glazier it led to the loss of the cobbler or the bookseller.
Overall the idea of the broken window fallacy is that if there is a destructive action, it is perceived to lead to higher production and greater impetus to the economy. However, what the people don't realize is that ...
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- BSc , University of Calcutta
- MBA, Eastern Institute for Integrated Learning in Management
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