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SilasBarta comments on Broken window fallacy and economic illiteracy. - Less Wrong
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Comments (13)
Understanding the broken window fallacy doesn't just mean recognizing that you shouldn't break stuff just to give your resources more to do; it means recognizing that a social policy of breaking stuff is stupid, even if it benefits specific people.
Considering how many people support policies isomorphic to breaking windows, with isomorphic justifications, I think it's fair to say must people do commit this fallacy, even if they wouldn't commit a different version of it in a different domain.
Also, there's serious debate at the academic level (that I don't take seriously) about whether it even is a fallacy. Some Keynesians believe (according to Wiki) that breaking windows can alleviate a recession.
(I think this is similar to our earlier debate about whether it's a failing of an economic theory that it regards obviously-stupid policy A as "better than nothing", if it also regards not-obviously-stupid policy A' as "better than A".)
Yes, I agree.
This is why I specified "domains where they have decent experience". My point is that I don't think there's a gigantic need to learn these concepts to improve business practices etc. . I do think there's a gigantic need to learn these concepts to improve public policy and charity (for the reasons given in The Myth of The Rational Voter).
People do a decent job of knowing these things on near topics, but not far topics.