Recessions, War, and the Parable of the Broken Window

I have had this conversation three times in the last few weeks.  In each conversation, someone has proposed that the United States should escalate the wars we are fighting to help deliver our country out of our unofficial recession.

“Think of all the work a war will provide”, says the person making the argument.

In each instance, I have mentioned Frederic Basiat‘s essay “That Which is Seen and That Which is Not Seen” (1874) or, what is commonly known as, “The Parable of The Broken Window“.

(Loosely described) In the story, a shopkeeper’s window is broken by his son.  A person stops by and says, “What a shame.”  Another answers, “Not really.  Think of all the work created by this destructive act.”  The person goes on to explain how many people can benefit by supplying goods and services to get the shopkeeper’s window repaired.

The moral of the story is that the argument can work the other way, too.  Think of all the things society lost because the shopkeeper had to use his resources repairing the window.

War is not a solution.

“Whence we arrive at this unexpected conclusion: “Society loses the value of things which are uselessly destroyed;” and we must assent to a maxim which will make the hair of protectionists stand on end—To break, to spoil, to waste, is not to encourage national labour; or, more briefly, “destruction is not profit.””

http://en.wikisource.org/wiki/That_Which_Is_Seen,_and_That_Which_Is_Not_Seen#The_Broken_Window

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About Christopher Hessenflow

Christopher Hessenflow is a financial planner in the Chicago area. He works with all sorts of people who are much more interesting than he is. He enjoys his career which lends him time to think and, sometimes, be creative. Chip was born bald.
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