The Fallacy of the Broken Window

Image

The following excerpt is taken form Henry Hazlitt’s book, Economics in One Lesson, though the origins of the concept of “opportunity cost” are attributed to French theorist, Frederic Bastiat. I chose to quote verbatim because he does an excellent job of portraying the parable in a readable and relatable form. The significance of this teaching cannot be overstated – too much of today’s thinking involves such terrible and short-sighted thinking, even outside the field of economics. While there is truth to the notion of “creation from destruction,” how it can be rightly applied to human systems is much more limited than is typically thought. It would serve us well to remember this parable often. Surely, I will refer to it in posts to come.

A young hoodlum, say, heaves a brick through the window of a baker’s shop. The shopkeeper runs out furious, but the boy is gone. A crowd gathers, and begins to stare with quiet satisfaction at the gaping hole in the window and the shattered glass over the bread and pies. After a while the crowd feels the need for philosophic reflection. And several of its members are almost certain to remind each other or the baker that, after all, the misfortune has a bright side. It will make business for some glazier. As they begin to think of this they elaborate upon it. How much does a new plate of glass window cost? Two hundred and fifty dollars? That will be quite a sum. After all, if windows were never broken, what would happen to the glass business? Then, of course, the thing is endless. The glazier will have $250 more to spend with other merchants, and these in turn will have $250 more to spend with still other merchants and so on ad infinitum. The smashed window will go on providing money and employment  in ever-widening circles. The logical conclusion from all this would be, if the crowd drew it, that the little hoodlum who threw the brick, far from being a public menace, was a public benefactor.

Now let us take another look. The crowd is at least right in its first conclusion. This little act of vandalism will in the first instance mean more business for some glazier. The glazier will be no more unhappy to learn of the incident than an undertaker to learn of a death. But the shopkeeper wil be out $250 that he was planning to spend for a new suit. Because he has had to replace the window, he will have to go without the suit (or some equivalent need or luxury). Instead of having a window and $250 he now has merely a window. Or, as he was planning to buy the suit that very afternoon, instead of having both a window and a suit he must be content with the window and no suit. If we think of him as a part of the community, the community has lost a new suit that might otherwise have come into being, and is just that much poorer.

The glazier’s gain of business, in short, is merely the tailor’s loss of business. No new “employment” has been added. The people in the crowd were thinking only of two parties to the transaction, the baker and the glazier. They had forgotten the potential third party involved, the tailor. They forgot him precisely because he will not now enter the scene. The will see the new window in the next day or two. They will never see the extra suit, precisely because it will never be made. They see only what is immediately visible to the eye.

*  *  *  *  *

One evening at the University I was attending, I was walking with a friend who, when she had pulled out her last cigarette, crumpled up the box and threw it on the ground of the parking lot. I looked at her in shock for her brazen littering. Quick to see my environmentalist outrage she quickly began to rationalize her own version of the broken-window fallacy. “Littering is good because it will create a job for someone to clean it up.” My rebuttal was an unsophisticated, near inarticulate, diatribe about how we need to take better care of the Earth and our shared human spaces – I even had to pick up the cigarette box and threw it away in the receptacle not far from where we walked. Had I known then what I know now, I could have argued more effectively and in a manner that was to her self-interest. I could have said, “Yes, that is true. But, if you throw it away yourself, that job will go unneeded and the money to pay that person a salary can be saved. Eventually, this savings can be passed on to us by lower tuition because the University has one less employee to pay; or, similarly, they could afford to pay higher salaries to better teachers thus improving the quality of our education, or some other more productive project.” Yet one of many “I should have said” stories I have. But the lesson has been learned, and my argument awaits new specious reasonings.

There is no shortage of similar sophistries in contemporary American life. My hope is that if we are mindful, we can identify and counter them. Maybe in this way, our individual efforts will be more effective in improving our lives and society.

Equality — Which?

Image

A recent academic debate has both disturbed and motivated me. Disturbed because of many reasons but the most relevant, intellectually, is that very smart individuals speak of equality but seem unclear as to what it means, exactly, and how it translates operationally into the various social arrangements. And it has motivated me to inquire and expound upon a concept that I think we all take for granted in thinking that we know what it means.

Let us begin with basics: denotative definitions. The Oxford English Dictionary (OED) defines equality in several ways:

  1. The condition of being equal in quantity, amount, value, intensity, etc
  2. The exact correspondence between magnitude and number in respect of quantity, the existence of is which is sometimes expressed by the sign =
  3. The condition of having equal dignity, rank, or privileges with others
  4. The condition of being equal in power, ability, achievement, or excellence
  5. In persons: fairness, impartiality, equity; In things: due proportion, proportionateness

The first definition is the essential meaning, it describes the condition/relationship between two objects and their identicalness, correspondence, or sameness. I will call this Platonic Equality in that it describes the purest, most fundamental essence (or form) of equality – all other descriptions of equality have this essence contained within its meaning. The second definition is Mathematical Equality in that it refers to quantity and/or magnitude. It bears little significance to the upcoming discussion but is worth mentioning.

The third, fourth and fifth definitions are all related in kind but differ in degree. For that reason I will refer to them as Aristotelian Equalities given that they have an operational relevance in politics, economics, and society in general. Moreover, each definition in turn can be further classified by their functioning within human social systems. For example, the third definition describes what can be considered as the basis for liberal democracies. In this way, people are equal to each other in that they all have the self-evident, inalienable human rights codified in the Declaration of Independence and the Declaration of Human Rights, and as such an equal share in directing their sociopolitical system(s). For this reason, I will refer to this as (AristotelianPolitical Equality.

The Fourth definition refers to the capability or capacity of an individual. These abilities are those we are each born with or develop over time, which helps to make us unique. When people say that “we are not all equal” it is usually this equality to which they refer – “Not everyone can play basketball like a MIchael Jordan; not everyone can lift weights like Arnold Schwarzenegger; and not everyone is an Einstein.” And while this is true, most certainly, there are equalities even in ability. For many of us make the same grades as others; or score identically on IQ tests; or even have the exact same top running speed or high jump. Indeed, one need look no further than statistical standard deviations to see the truth of this. This definition is problematic because it is often cited to highlight inequalities more than equalities, and thus seems to contradict the tenet of equality. However, as I’ve pointed out, even though the extremes of any deviation referred to are rare, most of us fall within similar deviations/categories and are equal in that respect. Given the contradictory and counterintuitive nature – and use – of this definition, I will refer to this as (Aristotelian) Statistical Equality.

The fifth definition refers to a judicial system. Under this meaning, equality means equality under the Law. This means that all are culpable (or commendable) for their actions; whether President or pauper, if one breaks the law, one is subject to punishment. In other words: No one is above the law; we are all equal under it. For this reason, I will refer to this equality as (AristotelianLegal Equality. It should be noted that there are other specific forms of equality, like gender equality, that are manifest but I find, so far, that they fall under one of these mentioned categories. Gender equality would fall under the Aristotelian Political (and Legal) Equality, for example.

*  *  *  *  *

The context of the debate that sparked this inquiry was a discussion about Vladmir Lenin and the establishment of the U.S.S.R.. Under Lenin’s system there were essentially two castes: the vanguard (and later the Politburo) and the masses – both inaccurately subsumed under the term, the Proletariat. In Communism, all were equal workers entitled to the means of production and what was produced. However, Lenin established an inner circle of cronies, with himself at the center, who received more – in all ways possible – than those outside of it. This two-tier system is perfectly exemplified in the memorable phrase, and Animal Farm commandment, in George Orwell’s novella about Leninism/Stalinism: “All Animals Are Equal, But Some Animals Are More Equal Than Others.”

Here emerges a new type of equality. It is a hypocritical equality, a contradiction, and utter nonsense – for there is no such thing as more equal. Yet, this was the way that Soviet Russia operated under its dictatorship of the proletariat, and this “logic” was accepted and enforced. But, again, this is nonsense. But fear is a powerful motivator, and history is rife with examples of human beings accepting illogic as logic, and inequality as equality, all due to fear. This definition of “equality” is not given in the OED but I think it should be. I will refer to this conception of a two-tier equality – really just another form of inequality, but accepted as its opposite – as (Aristotelian) Orwellian Equality.

The argument was made that Orwellian equality was equality proper, despite the fact that all the participants to the discussion knew this to be a false equivalence. Several times the contradiction was pointed out, and several times it was denied, even though everyone knew it to be otherwise. Then there came a new argument:

Soviet Russia was a “closed system.” There was an authority that determined “truths,” and his cronies were responsible for disseminating it. All the rest were equal in their submission to it; and the inner circle insisted that itself, too, was equal to those outside of it. But this was not the case; clearly, the inner circle had privileges the masses did not. And by definition, this is no type of equality other than Orwellian equality, which is, in fact, a contradiction of equality. I understood the analogy, it was accurate in describing the social system developed by Lenin, but it was in no meaningful (or literal) way, equal.

*  *  *  *  *

So, why make these distinctions; why write out this inquiry; and why try to clarify? In short, because it is important. First, and in the context of the discussion mentioned, it is important because what the Soviets practiced was not proper equality (nor was it Communism in the Marxist, denotative-philosophical sense). It was a practice very similar in our times of people calling themselves Christians but living very unChristian lives – just because one calls oneself something or claims to live under certain principles, does not mean that that is, in fact, the case. In order to determine the veracity of such statements, they must be judged according to the standard of its definition(s) or practice(s). Equality is equality only if it satisfies the condition of sameness; and a Christian is a Christian only if (s)he satisfies the doctrine, i.e. definition, of Christianity.

Second, it is important because the world is getting more complex and yet our language (or maybe it’s our thinking) is not evolving with it. And this matters because the more precise our language the more our ideas, and ultimately our lives, approximate truth (about what we talk and think). Without this precision, we cannot be sure that we are talking about the same thing, thus confusing terms and keeping ourselves unnecessarily divided and powerless. This phenomenon is prevalent in modern-day politics, so much so that it has an official term: double speak. Politicians use words like “freedom,” “equality,” “fairness,” “liberty,” “capitalism,” and “free markets” but, like Lenin and his comrades, they often mean different things than what those who hear these words think. This is a major problem with American society today: ignorance, and exploitation of that ignorance through tactics such as double speak.

It is absolutely critical that we develop this linguistic precision so as to communicate more effectively, and, ultimately, shape our world with these words and ideas; and even hold those accountable who lie to us in such duplicitous ways. By doing this way, we maintain the vigilance that is a citizen’s duty; earn our intelligence as rational agents; and develop our humanity as conscious beings.