WotManic wrote:well, that's Broken Window Economics, and it's actually kinda counter-productive.
Actually no. Broken Window Economics works fine, if your current problem happens to be that labor is going unused rather than a shortage of glass.
When the windows get broken, people get hired to make and install new windows. Then there are more employed people and thus more potential consumers, so other people get hired (or have their hours extended) to provide shoes and meals and handjobs and whatever to the newly employed. The total wealth of society is increased, because the fact that the window repairing people transform from unemployed people to consumers puts more resources to work than the mere resources required to fix the windows themselves.
The Broken Window Fallacy is only a fallacy in a
planned economy. If the government is willing and able to put all the unemployed people to productive labor and continually ensure that every man and woman in the economy is a consumer who is working to their limits, then breaking windows pulls construction workers off of building new things to fix old things. As long as you have a free market and unemployed people, there will always be a place for Broken Window Economics.
ISP wrote:So if I am an Identity Thief and I hack your bank account, withdrawing all your savings, and go spend it at the mall, this is boosting the economy. That is absurd.
Of course that would boost the economy. If I take money out of my bank account and spend it at the mall, the economy is boosted. If
you take the money out of
my account and spend it at the mall, the economy would be boosted by exactly the same amount. There's nothing absurd about that at all.
You seem to be conflating
morality with
wealth. The two are not particularly related. GDP goes up whenever there is productive labor or commerce. It doesn't only go up in the cases that said productive labor or commerce happens to be ethical or legal. If I came over to your house and killed your dog and sold the meat on the open market for twenty dollars, then GDP would have increased by twenty dollars.
When we talk about "the economy" we are talking about GDP. When we "boost the economy" we are talking about increasing GDP. That means that the
total incomes of every single person have increased. If I steal a dollar from you, then
my income has gone up by one dollar and
your income has gone down by one dollar - that's zero sum. But if I spend that dollar to buy a cup of coffee at the mall, then the income of that coffee shack has gone up for that year by one dollar. The total is now +1 dollar over you getting to keep your dollar (assuming you weren't planning on spending it during this period). If the guy at the CoffeeShack spends the dollar on something else, the total would be +2 dollars for the year. And so on. The fast money moves, the more the "economy is boosted".
But whether boosting the economy is a good thing or not is entirely dependent on what it's being boosted
with. The assumption of a market society is that people will normally be making Pareto-Efficient exchanges and thus everything people choose to buy or sell makes everyone happier. But this is not in fact the case. There are externalities. If I buy some Moldovan sex slaves, both people carrying out the transaction are happier (me and the Romanian human trafficker), but there are other people who didn't exchange any money in that transaction who are made less happy (the slaves themselves and also the family members who never see their daughters and sisters again). It is in fact
trivially easy to imagine scenarios that increase GDP and nevertheless are a net loss for society. Many of these things are considered immoral or illegal or both.
But not all of them are. Right now, it's still considered basically OK to sell people harmful and addictive drugs like tobacco that destroy their internal organs and make them die young. This taxes the healthcare system, but of course
that boosts the economy too!
Note: the vast majority of things included in GDP are not especially morally reprobate. It's actually a pretty good figure for the overall health of the economy. The fringe weirdness is nonetheless there.
-Username17