Tuesday, February 17, 2009

Destruction creates jobs?

Conventional wisdom says that there's a silver lining to natural disasters and war—yes, there's a lot of destruction, but think of the jobs that will be created during the rebuilding process! Hazlitt debunks this fallacy as well:

The people of Europe [post-WWII] built more new houses than otherwise because they had to. But when they built more houses they had just that much less manpower and productive capacity left over for everything else. When they bought houses they had just that much less purchasing power for something else. Wherever business was increased in one direction, it was (except insofar as productive energies were stimulated by a sense of want and urgency) correspondingly reduced in another.

Each person recognizes that the destruction of his own property is a bad thing. So how then does large-scale destruction become a social good?

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