Re: Yes, hurricanes/war/broken windows do hamper economic growth
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Originally Posted by brantonli
You forget one crucial detail though. Imagine an economy where the whole economic activity revolves around that tower, it can actually be a sustainable economy as long as the tower itself contributes some revenue/utility in that year between it being built and it being knocked down.
I'm not saying it's a very smart model obviously, but oddly enoguh if you really want to, you can continue building and knocking it down as long as you can derive some use from it.
If you had an entire economy that revolved entirely around 1 tower, how could knocking down the tower be good for that economy in the aggregate? All the money/time/labor/resources used rebuilding the tower could have been used expanding on it, building additions onto it, or creating a 2nd tower. Or whatever the people wanted to spend their money on.
Re: Yes, hurricanes/war/broken windows do hamper economic growth
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Originally Posted by ripthekik
I'm not watching a 7 minutes video, but I'm guessing it's like this:
RE-building is actually inefficient, because you're redoing something that has already been done. If you were building something new, it'd be productive. However here you're just building something that has been broken down. You go from 0 to -3 (destroyed) and back to 0 (rebuild).
Just imagine if someone keeps on building a tower, and knocking it down. Then build it again, knock down forever. People keep having jobs, but it's a total waste of time and money. Each time something is destroyed, value is lost.
That time spend re-building could be spent building new architecture, manpower go into other projects which help the city. That new opportunity cost is lost. Rebuild is just going around in circles.
Yes you're right, but you couldn't imagine how many people (professional economists included) cannot grasp what you just said. Hence why even our history books tell us World War 2 was good for the economy for similar reasons as they are saying Hurricane Sandy was good for the economy.
Re: Yes, hurricanes/war/broken windows do hamper economic growth
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Originally Posted by joe
Yes you're right, but you couldn't imagine how many people (professional economists included) cannot grasp what you just said. Hence why even our history books tell us World War 2 was good for the economy for similar reasons as they are saying Hurricane Sandy was good for the economy.
?? I dont remember seeing/hearing this back in school or economics class.
Aren't wars/natural disasters factors that cause hyperinflation? Which is the worst thing that can happen to an economy.
I haven't seen or read anything in a book that says the opposite.
Re: Yes, hurricanes/war/broken windows do hamper economic growth
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Originally Posted by ripthekik
I haven't seen or read anything in a book that says the opposite.
The massive destruction of industrial Japan and Germany during the second world war definitely were a factor in them becoming the big economic powerhouses they were a couple of decades later. And there are many studies and professors who would tell you that.
It's just "a" factor though, and one that could easily go the other way. It's not necessarily a recipe for success. And of course the population of those countries had to go through many bad years to reach that point. But no one is claiming otherwise.
Re: Yes, hurricanes/war/broken windows do hamper economic growth
Quote:
Originally Posted by joe
If you had an entire economy that revolved entirely around 1 tower, how could knocking down the tower be good for that economy in the aggregate? All the money/time/labor/resources used rebuilding the tower could have been used expanding on it, building additions onto it, or creating a 2nd tower. Or whatever the people wanted to spend their money on.
I never said its a good or smart use of resources, I said its viable, but completely stupid way of maintaining an economy.
Re: Yes, hurricanes/war/broken windows do hamper economic growth
Quote:
Originally Posted by joe
Are people really that bummed on the video because it's 7 minutes long? I eat hour long speeches like it's candy! I thought 7 minutes was a super reasonable length for a video to dispel such a common myth. ha. That's actually why I posted this one, because it was so short that I thought some of you might actually watch it. Notice how I proudly typed the video length in the OP. . ha
It says something similar to that.. but it's nice to hear the full reasoning I'd say.
Not all of us are jobless and hang out in our parent's basement all day. We have shit to do beyond wacko you tube videos.
Re: Yes, hurricanes/war/broken windows do hamper economic growth
. ha
