Chapter II, "The Broken Window"
Now let us take another look. The crowd is at least right in its first conclusion. This little act of vandalism will in the first instance mean more business for some glazier. The glazier will be no more unhappy to learn of the incident than an undertaker to learn of a death. But the shopkeeper will be out $250 that he was planning to spend for a new suit. Because he has had to replace the window, he will have to go without the suit (or some equivalent need or luxury). Instead of having a window and $250 he now has merely a window. Or, as he was planning to buy the suit that very afternoon, instead of having both a window and a suit he must be content with the window and no suit. If we think of him as part of the community, the community has lost a new suit that might otherwise have come into being, and is just that much poorer.
The glazier’s gain of business, in short, is merely the tailor’s loss of business. No new “employment” has been added. The people in the crowd were thinking only of two parties to the transaction, the baker and the glazier. They had forgotten the potential third party involved, the tailor. They forgot him precisely because he will not now enter the scene. They will see the new window in the next day or two. They will never see the extra suit, precisely because it will never be made. They see only what is immediately visible to the eye.*
at http://126.96.36.199/vnews.php?nid=435 here.
Economics in One Lesson was voted among the top 10 non-fiction
books of the
excerpts from Chapter XVII, "Government Price-Fixing" are available on the web HERE.
*Optional: write a humorous or sarcastic essay on this
question: Should people who refuse to, or are unable to, think
about the long-term
consequences, unintended consequences and/or invisible consequences of politicians' blunders be allowed to run for public office (or even vote)?
Should control freaks and other people who are afraid of freedom?
Extra credit: In the history of the United States only one President had a degree in economics. Which one was it?