preview

The Broken Window Essay

Decent Essays
Open Document

Topic: The Main Principle of Economics
When people talk about the general status of society, they usually throw into the conversation a frequently misunderstood word: economy. Ironically, its definition is not what confuses people; the problem for them is understanding economics itself. Understanding economics, the study of how the economy works, is much less complicated than most people would think. As Henry Hazlitt aptly states: “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”
The Broken Window is a classic example of economics. Let us suppose that a young hoodlum …show more content…

It should be because it has all been true so far, but the story has not finished playing out yet. In fact, there is another character that has not been mentioned yet: the carpenter. Originally, the shopkeeper had been planning to buy a nice table for his home with the $200, but now that he must pay for the broken window, he cannot get the table. He could have had a window and a new table, but now he must be content with just the window. In viewing the shopkeeper as part of the community, the community itself has suffered a net loss because, if it was not for the broken window, the community would now also have a …show more content…

There is also Old Dave who just got a job producing the machine, Billy Harrison who works the machine, and Jerry Picker who can now buy fabric he could not have afforded beforehand. Most importantly, because of the lower price of fabric, other businesses who relied on fabric can expand and reabsorb all the people who lost their jobs plus a little more. The real benefit, therefore, far outweighs the momentary loss of jobs. Hence, the real question is where the greater evil lies: in hundreds of people losing their jobs or in thousands being kept from getting a

Get Access