Invest It Wisely

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Stimulate the Economy by Breaking Stuff?

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The video originally comes from the Mises University, and I last saw it at The Daily Capitalist. You can read an article by Frédéric Bastiat on the broken window fallacy at the Mises Economics Blog. “Claude Frédéric Bastiat was a French economist, legislator, and writer who championed private property, free markets, and limited government.”[1]

Further reading on the current economic situation and scares
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Comments

  1. Hi Kevin,

    Thanks for sharing this video, it makes sense.
    It looks like the Fed is taking baby steps towards new stimulus. Markets are opening lower today, sort of a baby crying for this stimulus…We are going through interesting times indeed….

  2. Understanding the broken window fallacy is the beginning of economic wisdom. It is nicely described along with a lot of other commonsensical economics in “Economics in One Lesson” by Henry Hazlitt, available for free on line. Just Google “Economics in One Lesson”.

    • Thanks for sharing that, Robert! Indeed, when it comes to economics and liberty, there are a great number of books available online, and for free; some of the best things in life are free 😉

Trackbacks

  1. […] Kevin at InvestItWisely shares an interesting video about the Broken Window fallacy. […]

  3. […] The one lesson is very simple: It’s all about looking at the unseen, as well as the seen. It’s about considering the opportunity costs. When considering any economic policy, we must not only look at the short-run effects on some groups, but we must also look at the long-run effects on all groups. One prominent example of this is the broken window fallacy. […]