Economics in One Lesson, Chapter II – Henry Hazlitt

Part 2 – The Lesson Applied, Chapter II – The Broken Window

Imagine yourself seeing a vandal breaking a baker’s window. The vandal runs off and you suddenly feel the need to rationalize the act from a social perspective. You realize that the baker will have to replace the window in the next couple of days. To replace it he’ll have to buy a window from a glazier for, let’s say, 250$. That glazier will have 250$ to spend with other merchants, and these will have 250$ to spend with still other merchants, and so ad infinitum. The smashed window will go on providing money and employment in ever widening circles. Was the vandal then, in fact, a public benefactor?

From the first perspective the vandal definitely seems like a benefactor for the society. But let’s look at it from a different perspective. Let’s say that the shopkeeper was planning on using his 250$ (now lost on replacing the window) to buy a suit that very afternoon. Then the tailor will be in the same position as the previous glazier and produce the same effect. Instead of having a window and a suit, the baker now only has a window and now that suit will never come into being. The tailor, as well as the community, is now one suit poorer that it would have been.

In short, the glazier’s gain of buisness is merely the tailor’s loss of buisness. During your philosophical reflection you had forgotten the third party involved, the tailor, precisely because he was not there. In the following days you might see the window replaced, but you will never see that new suit,  precisely because it will never be made.

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