“BROKEN WINDOWS” & DANGERS OF POOR UNDERSTANDING OF ECONOMIC PROCESSES… !!!

Frederic Bastiat created a parable that identified what has become known as the “broken window fallacy” wherein he points out why destruction cannot create net economic benefits.

Alas, this fallacy lives on in the minds as is evident in the pathetic suggestion by New York Fed President William Dudley who stated in response to the recent impacts of hurricanes that made landfall in the USA: “The long-run effect of these disasters unfortunately is it actually lifts economic activity because you have to rebuild all the things that have been damaged by the storms.”

Frederic Bastiat

This entry was posted in Uncategorized by christopher. Bookmark the permalink.

About christopher

Content of "Natural Order" attempts to reflect the commitment of Universidad Francisco Marroquin to support the development of a society of free & responsible individuals. The principal commentator for this blog is Christopher Lingle.

Leave a Reply

Your email address will not be published. Required fields are marked *