Stimulate the Economy by Breaking Stuff?

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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  1. says

    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. says

    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”.

    • says

      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 😉


  1. […] 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. […]