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Broken window fallacy

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Broken window fallacy
The theory of the “Broken window fallacy” says that destruction and the costs incurred along with it do not reap any kind of benefits to the economy. If any kind of destruction occurs, there are many parties that are going to be affected, if it’s a natural disaster it would affect the business of the economy and the economy is hit badly. If everything was working on normal pace, the business could have flourished and would have new avenues, but on the event of the destruction all those extra opportunities are lost by the business. Instead, the economy has to invest money into getting the destruction rectifies or repaired. And this destruction not only affects the economy and the country it affects the other intermediaries as well. The theory says that in a way this kind of destruction may help a few but on the whole, it destroys more than it could benefit. And the cost of repairing or rebuilding will be more of a maintenance cost which would be high.
For example: For a common man, if a natural disaster occurs and destroys a commercial building. There is heavy loss incurred. People lose their jobs. The profits of the company go down and this impacts the economy as a whole. Whereas, on the other hand this gives business to the construction companies. They will profit by some else’s loss.
But according to the French economist, Frederic Bastiat, if the commercial building did collapse then it would be doing some much more business and would progress at a faster rate. And the cost of rebuilding does not stimulate production activities that would profit the business.
This theory is not true, because natural and man-made disasters are beyond the control of anyone. If disaster strikes then the government cannot sit quiet and let it continue to affect the economy. The government will have to take a stand and try to rectify things. Even though, the economy has suffered losses and someone has suffered it will definitely come up with the help of the government. This will

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