Some researchers point to post-war Germany as a perfect example of the potential positive effects of armed conflicts. The period from 1939 to 1945 was obviously marked by unparalleled atrocities. Millions of people from various nations perished. Hundreds of cities and production facilities were razed to the ground. Yet, in the ensuing decades, the Federal Republic of Germany witnessed remarkable economic growth. One of the reasons behind it\u2014besides the necessity of rebuilding the country\u2014was the opportunity to build more advanced and efficient manufacturing plants. You could compare this to building a new home instead of completely renovating an old building, and evaluate the costs in both instances. The former is usually the cheaper option, with the added advantage of implementing up-to-date solutions (including energy-efficient technologies).<\/p>\n\n\n\n
No less than for Germany, World War II was also beneficial for the United States. A surge in public investments became the driving force of the American economy, and the country became an undisputed world leader (at the expense of the former global powers\u2014Great Britain and France\u2014which lost their colonies and most of their overseas properties). So maybe the war did boost economic growth after all?<\/p>\n\n\n\n The writers at the prostaekonomia.pl blog argue that the myth of war-triggered benefits is just another version of the parable of the broken window. The concept was conceived by 19th-century French economist, an advocate for the free market and a critic of socialism, Claude-Fr\u00e9d\u00e9ric Bastiat. He came up with a story of a townsman, named James Goodfellow, whose underage son broke a window pane. When the dismayed father lamented that a new window would cost him as much as six francs, someone from the onlooking crowd protested and said that there was nothing wrong with that, because the broken pane became the opportunity for the glazer to make a profit (otherwise he wouldn\u2019t be hired to fix the window). The glazer then would spend the earned money somewhere else, e.g., at the inn, and the innkeeper would in turn buy from the nearby merchant, and so on, and this would boost the local economy. Following this logic, one could absurdly argue that the boy did nothing wrong\u2014on the contrary, he supported local commerce.<\/p>\n\n\n\n Bastiat conducted a thorough analysis of the problem. From James Goodfellow\u2019s point of view, the situation looked like this: he initially had six francs, and a window pane. After the mishap, he had only a new window pane bought with the money he planned to spend on new shoes. Thus, in reality there was no genuine \u201ceconomic boost,\u201d the gain of the glazer mirrored the loss of the shoemaker.<\/p>\n\n\n\n American journalist and economist Henry Stuart Hazlitt claims that similar fallacies are very common. For instance, when news analysts assert that damages caused by a flood will invigorate the construction sector, they overlook the fact that prosperity in one industry translates into depression in another one. According to Hazlitt, misconceptions of this type appear because people often fixate on the immediate ramifications of an event, neglecting its broader, indirect consequences.<\/p>\n\n\n\n![\"war\"](\"https:\/\/holistic.news\/en\/wp-content\/uploads\/2023\/08\/Holistic_News_rebuilding_ruined_city_after_war_colourful_illust_72de94af-51fa-4c54-86e6-041be7d249e7-1024x574.png\")
A Broken Window is Bad for Business<\/strong><\/h2>\n\n\n\n