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The parable of the broken window was introduced by French economist Frédéric Bastiat in his 1850 essay "That Which Is Seen, and That Which Is Not Seen" ("Ce qu'on voit et ce qu'on ne voit pas") to illustrate why destruction, and the money spent to recover from destruction, is not actually a net benefit to society.
Chapter 2, "The Broken Window", uses the example of a broken window to demonstrate what Hazlitt considers the fallacy that destruction can be good for the economy. He argues that while the broken window may create work for the glazier, the money the shopkeeper has to spend on replacing the window means that he cannot spend it elsewhere in the ...
Claude-Frédéric Bastiat (/ b ɑː s t i ˈ ɑː /; French: [klod fʁedeʁik bastja]; 30 June 1801 – 24 December 1850) was a French economist, writer and a prominent member of the French liberal school. [1] A member of the French National Assembly, Bastiat developed the economic concept of opportunity cost and introduced the parable of the ...
The essay was influenced by John Locke's Second Treatise on Government and in turn influenced Henry Hazlitt's Economics in One Lesson. [1] It is the work for which Bastiat is most famous, followed by the candlemaker's petition and the parable of the broken window.
Knightian uncertainty – Lack of quantifiable knowledge in economics; Map–territory relation – Relationship between an object and a representation of that object; Moral hazard – Increases in the exposure to risk when insured, or when another bears the cost; Parable of the broken window – Parable by French economist Frédéric Bastiat
G. I. Joe fallacy, the tendency to think that knowing about cognitive bias is enough to overcome it. [66] Gambler's fallacy, the tendency to think that future probabilities are altered by past events, when in reality they are unchanged. The fallacy arises from an erroneous conceptualization of the law of large numbers. For example, "I've ...
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