Broken window Fallacy Was: Far Left Group Opposes a Return to the Moon

Basically I agree. But there are other aspects. Economies are like
organisms. They work by many simple, decentralized rules. And
therefore they need continous exercise and training. If no new windows
are needed for a long time (say 50 years), the art of creating window
glas will be lost. The supply chain will stop to exist.

The first window produced after that break will be extremely expensive
and difficult to obtain. Which in turn might cause people to use
different techniques. Maybe it will turn out to be easier to use
plasic windows. If that is more economic in the long run (e.g. plasic
windows may age faster) is another question.

There is some kind of hysteresis effect in economies. Things tend to
stay the way they are. Its easier to stay in the market than to become
established in a market. If the market breaks down completely, new and
better ways of doing things have a better chance to succeed. In my
optinion this is an important aspect of the post-WWII Western Germany
economical success.

To stay with the example: you do not replace windows because better
windows are available. Its less trouble to keep the old window. To pay
hundred Dollar now to gain two hundred Doller in five years is a risky
decision. What if the window breaks next year, before it payed for
itself? So I better wait until it really breaks.

Even if I have the money for the new window now, I probably would
prefer not to spend it now. I might decide to save it for the day the
window breaks. So having the ressources to re-start the economy is
also an important aspect (buzzword: Marshall plan).

What's my point? Well, things are more complex. Even if you leave out
politics.

Rand Simberg wrote:
On Sat, 03 Jan 2004 23:11:09 GMT, in a place far, far away, Michael
Walsh made the phosphor on my monitor glow in
such a way as to indicate that:



But it only makes economic sense if the savings are enough to offset
the cost of the new windows, in which case, it would have made sense
to replace them even if they weren't broken. It's not the act of
breaking things that's good for the economy, it's the investing in
things that return value, regardless of whether or not those things
*have* to be replaced.

I can think of one place where the "broken window" advantage might
be somewhat true. That is where the thing that is broken should have
been scrapped in the first place and so breaking it is really something
that should have been done by a rational judgment.


That's what I say above, but in that case the window isn't being
replaced because it's broken--it's being replaced because it makes
economic sense to do so. One can't draw from that the conclusion that
breaking windows (or paying aerospace engineers) is intrinsically good
for the economy.