What is The Parable of the Broken Window?

Some people argue that  natural disasters and other acts of destruction create wealth and employment as we repair the damage they’ve caused. Professor Dan Russell explains that this fallacy fails to take into “opportunity costs” into consideration. Whenever we use a resource for one purpose, like  fixing a window, we give up the opportunity to use that resource for another purpose. We only know if the use of a resource has created value if we compare it with the  the alternate uses we had to forego. forego.  

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LEARN MORE:
The Broken Window Fallacy (video): Art Carden explains the broken window fallacy The Broken Window Fallacy
Louisiana Floods Reveal Age Old Broken Window Fallacy (blog article): Don Boudreaux explains how many fell for the broken window fallacy in response to the recent flooding in Louisiana http://www.learnliberty.org/blog/loui...
How a 19th century French pamphleteer preempted two centuries of economic fallacies (blog article): Christopher Todd Meredith explains Frederic Bastiat’s contributions to economics and political science, including the broken window fallacy http://www.learnliberty.org/blog/how-...

TRANSCRIPT: The full transcript can be found at http://www.learnliberty.org/?p=8503

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