I still think you wrong. 1. Even if a competing company picks up that business wealth is still lost; Sure the other company may earn more money but the total w

I still think you wrong. 1. Even if a competing company picks up that business wealth is still lost; Sure the other company may earn more money but the total wealth in the world has gone down. That other company could've productively produced some other good, and now has to produce what the other did. Also, the construction workers rebuilding it is just bastiat's broken window fallacy (http://en.wikipedia.org/wiki/Parable_of_the_broken_window http://en.wikipedia.org/wiki/Parable_of_the_broken_window). If the factory didn't burn down the construction workers could have built new things, not merely replacing old. 2.I may have not stated this one clearly enough; when a factory looses it's competitive edge due to mismanagement it's losing wealth. If they were able to properly manage the company everyone would be richer on average. 3. When you build too much of a good that isn't needed then you've lost wealth overall. The housing example might be too complicated, it has a lot of interrelated factors, but lets assume I make action figures. If I produce 100 Billion of them and there are only 1 million people that want them -- we've lost wealth... The time and energy producing the extra ones has now been squandered. Sure the market may expand to 10 million people with deep discounts but wealth was still lost.