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No, Burning Down Buildings Will Not Stimulate the Economy

Check this out! 

Recently, this clip of a rioter has been circulating around twitter. In the clip, the rioter says burning down businesses is a “symbolic act”…

Wait, what?

Last I checked, burning down buildings is much more than “symbolic” to the property owner, the business owner, and the employees who work for the business.

It is a shame we have so little respect for private property that we are now reducing ruining peoples livelihood to “a symbolic act.” However, when the interviewer points out the fact that burning down a business is actually really destructive (um… duh?) The rioter responds:

“Yeah… but when you burn down the building you have to hire a bunch of people to rebuild it, so it stimulates the economy.”

By now it shouldn’t shock me that people actually believe that destroying private property will stimulate the economy, but it still does. How can anyone think punishing small business owners somehow creates economic growth? But then again, these are the same people who think raising the minimum wage and increasing taxes will also stimulate the economy.

*Sigh*

Sadly, this is a common idea amongst people who subscribe to the theories of Keynesian economics. They see the money the property owner will use to rebuild as new money entering the economy—not as money the property owner could have used to build, for example, a new building to hold another business… which, ya know, would actually help grow the economy.  They also choose to completely ignore the money lost by the business owner in the time the business had to close down.

This is called the Broken Window Fallacy and it is such a widespread misconception that we dedicated an entire book to it!

In one of the books from our teen Choose your Consequence series, The Tuttle Twins and The Case of the Broken Window, we walk readers through the Broken Window Fallacy, giving them the choice to choose different solutions with different economic consequences. It is a great way for teens (ahem, and adults) to tangibly understand economic principles.

One of the reasons I started writing the Tuttle Twins books was to push back against the economic illiteracy the world seems to be slipping towards (and quickly!). Videos like the one above make that mission even more real to me.

Economic theories have real life consequences, like businesses being burned down. Let’s partner together to make sure the next generation isn’t so misled.

—Connor

31. Without Government, Who Will Build the Roads?

Many people believe that without government, we wouldn’t have access to things that are usually classified as “public goods.” From libraries to roads, many like to use this argument to prove the government’s growing presence in our lives. But we are surrounded by examples of private companies and individuals providing the same services that governments have historically provided, only the private sector often does it much better.

Terms:

  • Crony Capitalism: When successful businesses use government power in order to gain control in the marketplace.
  • Incentive: Something that motivates or encourages one to do something.
  • Monopoly: A business that does not have any competition

Links:

Books:

30. Should We Always Believe What We Hear on The News?

These days, it’s hard to always believe what you hear on the news, especially since the information is different depending on what channel you’re watching. But with so much misinformation out there, how can we be sure that the news we are getting is true?

People:

27. Why Do We Fight with Other Countries?

Why do wars and foreign conflict happen? Today, Connor and Brittany explain why countries sometimes fight and how a principle known as the Golden Rule can help make our world more peaceful.

Books:

Terms:

  • Blowback: the unintended consequences, unwanted side-effects, or suffered repercussions of military operations that fall back on those responsible for the aforementioned operations.
  • Non-aggression principle:  initiating or threatening any forceful interference with an individual or their property, is inherently wrong. BUT if someone initiates force or violence against you, you have the right to defend yourself. 

Links:

26. What is Inflation?

Did you know that candy used to cost as little as a penny? Seeing a movie in a theaters used to cost as little as $5. But over time, costs have gone up. In this episode, Connor and Brittany discuss the “Creature from Jekyll Island” and why this ghastly creature is causing prices to go up.

Links:

24. Without the Government, Who Would Take Care of People?

There is a common belief that people need government to take care of the less fortunate. Some even argue that without government, or with limited government, people would not be able to get the help they receive. But the free market is full of examples of private charities and communities coming together to help those in need.

People:

Books:

Links:

Terms:

  • Bureaucracy: a system of government in which most of the important decisions are made by state officials rather than by elected representatives.

23. Why Is Space X So Cool?

This Summer, Elon Musk’s Space X made history by sending two astronauts to the International Space Station inside SpaceX’s Crew Dragon. Today, Connor and Brittany discuss why this was so important and how it shows us that we don’t need government to fund space exploration.

Links:

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