My homeowners association is hosting a community yard sale today, and we’re participating. It’s not going to be the most profitable yard sale possible. We’re learning Frédéric Bastiat’s broken window fallacy in the most literal way possible, which blows because I already understand this and don’t need the experience.
One item (previously) for sale was a bookshelf. It had a pleasant $30 price tag on it, ready to go to a good home. That was until the moment the wind gusted and carried it into one of the side windows of my neighbor’s car. To fix the broken window and the dent will cost us approximately $500.
The economically illiterate will suggest that this is good, because now the glass installer will make a sale he would not have received. Good for him, but I am most certainly not better off, and am unhappy to be participating in this unnecessary charade. I’m still unemployed without a contract. Money is going out without coming in to replace expenditures. The money now going to pay for this window is money that might be needed for items I might need more than new glass for my neighbor’s car. Like food.
It won’t come to that, of course, so Whole Foods has nothing to worry about. But what about the new company I might invest in but now must live without that last $500? What if I might’ve used that $500 to buy sport suspension on a new MINI (when I land a new contract)? Would MINI USA like to have that $500 instead of the local glass installer?
So, yeah, money is circulating in the economy. That’s wonderful. But there’s more than what is seen. I might start doing this.