Earthshaking Economics, Part 1

Dave Killion — March 13, 2011

Natural disasters, such as the recent earthquakes in Japan and New Zealand, will almost always prompt comments displaying poor understanding of economics. One such comment takes the form of someone saying the disaster has a silver lining, because it will spur growth, while new construction and infrastructure will increase productivity and economic competitiveness.

I could explain why that’s wrong, but I could never hope to do better than Frédéric Bastiat did when he he explained the the difference between what is seen and unseen (The first 20 paragraphs are all you need to read for now). I will, however, ask this: if those people think earthquakes, hurricanes, and tornadoes bring prosperity, then why aren’t they burning down their own houses?

Bonus – I will award 10 Libertaripoints to the first person who can cite for me an example of  this fallacy  in recent news reports. Collect 100 Libertaripoints, and win a free drink!

Comments

Missy says

like burning your house down to collect the insurance?

— March 19, 2011

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