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