From: Phil Osborn (philosborn2001@yahoo.com)
Date: Tue Oct 15 2002 - 19:03:24 MDT
I think that if I had foreseen which direction this
thread might have taken, I might not have started it.
Has no one read Bastiat? The "Broken Window" fallacy?
Jeez. OK, for the economically dis-informed:
Someone breaks a window. So, now employment is
thereby created for the glazier, the glass
manufacturers, the sand diggers, the window
installers, etc., etc., etc. Logically, then, if we
wanted to get REALLY prosperous, we ought to break
every window in town, and, by extension, burn the
whole place down and maim ourselves in the process so
that the doctors and hospitals would make a whole lot
of money and we would all get rich from the trickle
down. Right?
WRONG. All the people whose work contributed to
replacing the window would have been doing OTHER
productive things with their time. The net economic
effect of a broken window is the cost of one window,
including labor. This is a minus, not a plus.
The net result of most wars is that a whole lot of
property gets destroyed and a lot of people are killed
or injured. Although there has always been an
undercurrent of propaganda to the effect that war
somehow brings prosperity - fueled by the profits that
certain isolated defense sectors of the economy derive
- usually even the victors are much worse off.
One of the propaganda pieces goes that WWII pulled the
U.S. out of the Great Depression. In fact, it was all
the Federal manipulations of the money supply and
their equally disasterous "fixes" that created the
Great Depression and kept us in it for so long. (Oh,
and it was the net losses of WWI catching up with us
that triggered it to begin with.)
When we got sucked into WWII, the expansion of the
money supply finally killed the ongoing deflation that
had prevented anyone from investing in production and
had thereby locked us into a downward spiral, but that
could have been handled other ways, and in fact we
were already emerging from the Depression before the
war, albeit slowly.
I'm reminded of when my boss - reportedly a strong
admirer of a certain Herr Shicklegrubber - allegedly
told some of the new college grads how the Holocaust
death camps had advanced medicine by 50 years, due to
all the unfettered scientific experimentation that
went on. Hey, and they almost had the Bomb, too!
The only real thread of possible truth to this idea
that war somehow brings good in the form of prosperity
or technical advances is in those societies in which a
parasitical ruling class eats up so much of the
production for useless, non-productive luxuries that
little or nothing is left to invest in R & D. Then,
being forced to shift resources into defense and the
related R & D may actually yield a positive net return.
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