The latest edition of Liberty Discussion featured deliberation over “The Broken Window fallacy”, first coined by 19th century economist Frederic Bastiat on February 24, 2017 was on. The fallacy tries to bring forward the idea of silver lining (a positive aspect seen in a difficult situation) in any sort of physical destruction in terms of economy that can begin right from where the destruction had occurred. The discussion was held among young participants with diverging views for and against the fallacy along the lines of wars and natural disasters.
One group regarded this fallacy to be quite assertive in boosting a passive economic scenario. They believed that destruction can be a good reason to gain economic momentum as there needs to be economic activities to mend the destruction and build it back to the original state. One of the participants of this view point reiterated the renowned logic that recognized the destruction and the rebuild after World War II to be assertive in reviving from the Great Depression of the 1930s.
On the other hand, another group regarded this fallacy to be illusionary. They believed the economic activities that have been mobilized in bringing back the affected resources could have been used in generating new capital resources after all. Speaking on the same logic regarding World War II, this group believed that all the expenses that were being made to revive from the destruction of World War could have been invested in building relatively new technologies. They argued that development as of now could have come earlier had we not spent wealth in coming back from the world wide destruction of the war.
The discussion also brought forward the applicability of such diverse viewpoints on natural disaster by connecting it with the recent earthquake that was witnessed in Nepal on April 2015.