Even those with a casual interest in economic theory are familiar with the broken window fallacy. The idea pushed by proponents of this fallacy is that the money spent to fix things which are broken - such as broken windows - stimulates the economy because it goes to the people/companies who repair such things.
The problem, of course, is that this assumes that the money being used for the repair wouldn’t have entered the economy anyway. Which is the fallacious part of the theory. Most of the time, were it not for the “broken window” or whatever it is that needed fixing, a person would have spent the money used for the repair on something else. Usually something more advantageous to himself and/or his family. Things such as food. Clothing. A vacation. Education. And on and on.
The idea that a “broken window” is good for the community is wrong-headed because it doesn’t take into account the cost to the individual with the broken window.
Now, pretend that global warming is the “broken window” in question and that people who want to spend tax dollars - our money - to fix it are the ones thinking that the expenditure of this money is a good thing.
Facing up to the twin dilemmas of our times — high energy costs and global warming — will require a new kind of economy: a greener economy. And if this new economy is to be built, shouldn’t we take another shot at the poverty problem?
Van Jones thinks we should. “A green economy should connect people who need the jobs most to the jobs that most need to be done,” he told an overflow crowd at a breakfast event in St. Paul last week.
Jones, age 39 and a Yale law school grad, is the founder and president of Green for All, a Bay Area-based organization that wants to make sure that the emerging green economy includes those the waning carbon-based system has left behind. His view is that climate change and poverty should be tackled together.
Mr. Jones thinks it will be a good thing that the money spent to “fix” global warming (whether or not that’s a problem - or even if it is one we can or should fix - is a topic for another post) will create jobs. And he’s right. It will probably create jobs, but at what cost to the individuals who will be providing the tax dollars to do this fixing?
Most of the time when an individual expends money they get something in return. Like food, entertainment, medical care or an education. Something that has value. But what value are they given when their money is taken from them and used to fix some problem that isn’t even impacting them in the first place?
Mr. Jones’ thinking is predicated on the same sort of absurd logic that socialist wealth redistribution theories are. The idea that we can confiscate wealth from some and use it to enrich others is a recipe for rampant corruption and eventually totalitarianism. Because someone has to control the redistribution.
People like Mr. Jones like this because they see themselves as being in charge of the redistribution. But for those of us who are having our wealth redistributed it isn’t such a good deal.
Each individual should act for themselves, and amass as much wealth as they can individually, instead of waiting around for someone to bring it to them.