August 2, 2004
Quote of the Day
A second fallacy is the idea of war as an engine of prosperity. Students are taught that World War II ended the Depression; many Americans seem to believe that tax revenues spent on defense contractors (creating jobs) are no loss to the productive economy; and our political leaders continue to believe that expanded government spending is an effective way of bringing an end to a recession and reviving the economy.
The truth is that war, and the preparation for it, is economically wasteful and destructive. Apart from the spoils gained by winning (if it is won) war and defense spending squander labor, resources, and wealth, leaving the country poorer in the end than if these things had been devoted to peaceful endeavors.
Posted by Russell Whitaker at August 2, 2004 12:11 PM | TrackBackNo one ever explained this better for the semi-literate than Frederic Bastiat in 1850 in what has come to be called the "Broken Window Fallacy" (see also Hazlitt, "Economics in One Lesson").
A good summary available at wikipedia:
http://en.wikipedia.org/wiki/Broken_window_fallacy
Posted by: KipEsquire on August 2, 2004 1:58 PMKip, I second those recommendations. I read both Hazlitt's and Bastiat's works during my last year of high school... and my relationship with my teachers became even more argumentative than before.
Posted by: Russell Whitaker on August 2, 2004 2:08 PMIt's almost as if people are looking for additional justifications for war. What they claim are their primary reasons are either too tenuous or don't support the kind of atrocities that are committed in their name. Maybe they imagine that ending the Depression somehow acts as a Karmic balance against firebombing civilians.
What's most upsetting to me is that not only is it not true that war helps the economy, but it wouldn't matter if it was.
Posted by: Bob Tipton on August 2, 2004 8:58 PM