Can the destruction of property ever be considered a good thing?

The French economist Frederick Bastiat wrote a parable about a baker who has his window broken and the economic effects of that event. Pretend this happened today and the baker must now spend $500 getting the window replaced. Some people may actually view this as a positive event that will stimulate the economy.

Discuss: Who are all the people who benefit from this act of vandalism?

The window maker and installer; and those who provide the glass and metal materials to make the window. Their families can now spend the money they’ve earned on what they want.

The baker suffers though. He has to spend some time arranging for the window to get fixed instead of focusing on his business, as well as his money.

Discuss: What might the baker have used the money for if the window wasn’t broken by a criminal?

Perhaps advertising, business expansion, hiring help, and other things that would directly benefit the baker’s business. Or he could have used it to provide clothing and food for his family. All of these actions trickle through the economy benefiting others who provide things of value without the destruction of the worth of property.

Discuss: To carry this to an extreme, which Bastiat did, consider a war that destroys an entire city. Is this a value to society because now so many people will be employed rebuilding the city?

Destruction of property is always a net loss to society. When something of value is destroyed that must be replaced, the capital that had been accumulated might have been used to increase property values instead of being wasted to rebuild the value that was there previously.

One parallel here is when special interest groups petition government to give them some of society’s accumulated wealth for their projects. Money could have been used to benefit the business owners but instead is used for things that may not succeed because the price wasn’t paid to build the business based on market demands (For example, Solyndra).

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About the author : Oak Norton

Father of 5 children, husband to 1 amazingly patient woman, entrepreneur, and education advocate.

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