Why breaking things is not profitable (wars, destroyed production, repair costs) : stocks


It has come to my attention that at least some users here don’t understand why the broken window fallacy is a fallacy. For those who have been misled into thinking war is somehow good for the economy it is time to take a reading field trip to Investopedia.com

When money and productivity have to be spent to replace things or repair something that should already be working then they are lost. That money is not creating something new or invesing in the future. If that thing that is broken or needs replacement was intentionally damaged then that is a cost and not an investment.

If suddenly Amazon warehouses spontaneously ignite and need to be repaired that is not a benefit to AMZN nor the American economy nor the world economy. If someone went around destroying delivery trucks around AMZN distribution centers that would not be creating jobs for the economy and would not be adding to anyone or anything it would be reducing overall productivity. Instead of AMZN expanding distribution it is delayed while trying to fix what it already had.

The broken window fallacy argues that there is no economic gain from fixing the destruction caused by a certain event. Even though capital will be spent to repair any damages, that is only a maintenance cost that does not spur the economy in the long run, as it is not a true increase in economic output. The money and time spent on repairing damages could be spent on more productive goods and services. In war, resources are diverted to creating weapons as opposed to using those resources to invest in areas that could increase actual economic output.

https://www.investopedia.com/ask/answers/08/broken-window-fallacy.asp



Source link

Related articles

Permian basin helps 940,000 U.S. jobs, drives billions in financial impression

(WO) — The Permian basin continues to strengthen its place as a key driver of U.S. power manufacturing and financial progress, supporting greater than 940,000 jobs nationwide and contributing billions of {dollars} to...

Microsoft is disabling Workplace 2019 for Mac subsequent month

Microsoft’s Workplace 2019 apps for Mac will cease working subsequent month, as a result of the corporate isn’t renewing a certificates that validates Workplace licenses. House owners of Workplace 2019 for Mac are...

FX possibility expiries for 10 June 10am New York lower

There are only a couple of expiries to pay attention to on the day, as highlighted in daring under.They're each for USD/JPY on the 160.00 and 160.50 ranges. Very like earlier than, the...

argenx SE (ARGX) Presents at Goldman Sachs forty seventh Annual International Healthcare Convention 2026 Transcript

ObservePlay Earnings NamePlay Earnings Name argenx SE (ARGX) Goldman Sachs forty seventh Annual International Healthcare Convention 2026 June 9, 2026 4:00 PM EDT Firm Contributors Arjen Lemmen - Vice President of...
spot_img

Latest articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

WP2Social Auto Publish Powered By : XYZScripts.com