Broken Window Fallacy

(also known as: glazier's fallacy)

Description: The illusion that destruction and money spent in recovery from destruction, is a net-benefit to society.  A broader application of this fallacy is the general tendency to overlook opportunity costs or that which is unseen, either in a financial sense or other.

This fallacy goes far beyond just looking for the silver lining, thinking positive, or making the best of a bad situation.  It is the incorrect assumption that the net benefit is positive.

Logical Form:

Disaster X occurred, but this is a good thing because Y will come, as a result.

Example #1:

Dad, I actually did America a favor by crashing your car.  Now, some auto shop will have more work, their employees will make more money, those employees will spend their money, and who knows, they might just come to your store and buy some of your products!

Explanation: I actually tried a variation of this argument when I was a kid -- it didn’t work, but not only did it not work, it is fallacious reasoning, and here is why: by crashing the car, a produced good is destroyed, and resources have to go into replacing that good as opposed to creating new goods.

Example #2:

The holocaust was a good thing overall.  It educated future generations about the evils of genocide.

Explanation: This is a real argument, I kid you not.  People tend to overvalue their own gain (the education) and devalue the losses that are unseen (the unimaginable suffering of the victims and their families). 

Exception: It might be the case when some kind of destruction actually can benefit society -- like in lightning striking the local crack house, and a soup kitchen being reconstructed in its place.

References: {apa}

Russell, D. (1969). Frederic Bastiat: ideas and influence. Foundation for Economic Education.


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