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This paradox was resolved by economist Bastiat in 1850 https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window https://en.m.wikipedia.org/wiki/Parable_of_

This paradox was resolved by economist Bastiat in 1850 https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window

FeepingCreature 4y ago
Well, it's not really a fallacy if you account for political impediments to just giving people money. In other words, war can compensate for a "demand shortage," notwithstanding that in a sensibly run economy, such a thing should never be expected to exist.
- eru 4y ago
  It's pretty easy to print money.. (Yet, sometimes like around 2008 countries still fail.)
  - marcosdumay 4y ago
    What is not easy is getting that money on the hands of the people, instead of a few rich folks.
    - eru 4y ago
      If the rich folks spend it, it gets into the hands of other people. If the rich folks keep it, then it doesn't contribute to anything (eg not to inflation), and you can just print more. In fact, the latter is much better: you can have your central bank gradually buy up the rest of the world without any inflation nor devaluation of your currency.
      - FeepingCreature 4y ago
        If the rich folk spend it, it gets in the hands of other people exactly insomuch as the other people are required to make something that the rich people want. That is increasingly not a given. And of course, it also burns some portion of those people's economic output on Rich People Interests. If the rich people "X" it and it gets in the hands of other people without burning those people's economic output on RPIs, then X is called "donating", not "spending". And in that case, we might as well cut out the middleman, cough UBI cough.
lucideer 4y ago
I was very careful in my comment not to directly use the term "economically beneficial", as wars are provably detrimental to the economy holistically. It's only beneficial to the abstracted idea of "economy" many modern economists and GDP-discourse folk subscribe to. Bastiat's parable alone is not particularly convincing in itself as it chooses to deal exclusively with currency (something that's provably debunkable by looking at economic systems even slightly more complex than the oversimplified whims of one shopkeeper), and not with the allocation of resources to society in general, which is much more negatively impacted by war / broken windows.
- FeepingCreature 4y ago
  I think wars can be straightforwardly economically beneficial, but only if spending is politically constrained.
  - lucideer 4y ago
    How???
    - FeepingCreature 4y ago
      The idea is if you can spend money on a bomb, you have some money that flows through a production chain, giving people employment, and at the end you get an item (the bomb) and you destroy it. It would be strictly better if you did anything else with the money, that resulted in the same employment spending but you'd have less value left at the end to destroy. But say that you live in a militarized society where it's easy to agree to fund bombs but very hard to agree to fund social services. Then the bomb may be your only option, and it's still better for your economy to build the bomb than not. It's the broken-window effect, if your political system is captured by a glassmakers' lobby.
      - lucideer 4y ago
        You're ignoring what the bomb does. > it's still better for your economy No. It's not. It's always worse in every way other than pure monetary terms.
marcosdumay 4y ago
20th century economics has a thing or two to add over those simple ideas.
- rhn_mk1 4y ago
  What things?
  - marcosdumay 4y ago
    There is a huge amount of complexity created by price-stickness and other non-rational behavior. There exist (with quite a lot of empirical validation) some situations where moving the money around improves the society, even if the reason the money is moving is a slight loss.
- cuteboy19 4y ago
  Are you saying that going around breaking random windows is actually good for society?
  - marcosdumay 4y ago
    It may be, it may not be, depends on some factors. It's not as simple as "spending money on wasteful things doesn't benefit anyone", but it is always the case that if you would gain even from breaking windows, you would gain even more from spending on something useful.
rhn_mk1 4y ago
With spending money being a proxy for labour, I'm disappointed that the article mentions labour only once.

This paradox was resolved by economist Bastiat in 1850 https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window

FeepingCreature 4y ago

Well, it's not really a fallacy if you account for political impediments to just giving people money. In other words, war can compensate for a "demand shortage," notwithstanding that in a sensibly run economy, such a thing should never be expected to exist.

eru 4y ago
It's pretty easy to print money.. (Yet, sometimes like around 2008 countries still fail.)
- marcosdumay 4y ago
  What is not easy is getting that money on the hands of the people, instead of a few rich folks.
  - eru 4y ago
    If the rich folks spend it, it gets into the hands of other people. If the rich folks keep it, then it doesn't contribute to anything (eg not to inflation), and you can just print more. In fact, the latter is much better: you can have your central bank gradually buy up the rest of the world without any inflation nor devaluation of your currency.
    - FeepingCreature 4y ago
      If the rich folk spend it, it gets in the hands of other people exactly insomuch as the other people are required to make something that the rich people want. That is increasingly not a given. And of course, it also burns some portion of those people's economic output on Rich People Interests. If the rich people "X" it and it gets in the hands of other people without burning those people's economic output on RPIs, then X is called "donating", not "spending". And in that case, we might as well cut out the middleman, cough UBI cough.

lucideer 4y ago

I was very careful in my comment not to directly use the term "economically beneficial", as wars are provably detrimental to the economy holistically. It's only beneficial to the abstracted idea of "economy" many modern economists and GDP-discourse folk subscribe to. Bastiat's parable alone is not particularly convincing in itself as it chooses to deal exclusively with currency (something that's provably debunkable by looking at economic systems even slightly more complex than the oversimplified whims of one shopkeeper), and not with the allocation of resources to society in general, which is much more negatively impacted by war / broken windows.

FeepingCreature 4y ago
I think wars can be straightforwardly economically beneficial, but only if spending is politically constrained.
- lucideer 4y ago
  How???
  - FeepingCreature 4y ago
    The idea is if you can spend money on a bomb, you have some money that flows through a production chain, giving people employment, and at the end you get an item (the bomb) and you destroy it. It would be strictly better if you did anything else with the money, that resulted in the same employment spending but you'd have less value left at the end to destroy. But say that you live in a militarized society where it's easy to agree to fund bombs but very hard to agree to fund social services. Then the bomb may be your only option, and it's still better for your economy to build the bomb than not. It's the broken-window effect, if your political system is captured by a glassmakers' lobby.
    - lucideer 4y ago
      You're ignoring what the bomb does. > it's still better for your economy No. It's not. It's always worse in every way other than pure monetary terms.

marcosdumay 4y ago

20th century economics has a thing or two to add over those simple ideas.

rhn_mk1 4y ago
What things?
- marcosdumay 4y ago
  There is a huge amount of complexity created by price-stickness and other non-rational behavior. There exist (with quite a lot of empirical validation) some situations where moving the money around improves the society, even if the reason the money is moving is a slight loss.
cuteboy19 4y ago
Are you saying that going around breaking random windows is actually good for society?
- marcosdumay 4y ago
  It may be, it may not be, depends on some factors. It's not as simple as "spending money on wasteful things doesn't benefit anyone", but it is always the case that if you would gain even from breaking windows, you would gain even more from spending on something useful.

rhn_mk1 4y ago

With spending money being a proxy for labour, I'm disappointed that the article mentions labour only once.