Recently I was around a bunch of people, several of whom were sick with colds and whatnot.
After getting home, I decided to look up the incubation period for the common cold to get an idea of when I might be in the clear.
Wikipedia says it’s 1-2 days.
Wikipedia goes on to say:
Common colds interfere with school attendance and can cause lost days on the job, resulting in considerable costs to the
economy. In addition, much money is spent on over-the-counter and
home remedies.
Suppose that Wikipedia had gone on to say:
The economic stimulus of these sales helps to offset the lost productivity of days at work.
QUESTION: Who can tell me why I would have had to delete that sentence?
FIND OUT MORE ABOUT THE COMMON COLD.
Because of the broken windows fallacy.
Sure money can be made by selling cold medicines, but the energies and materials gone into producing such medicines could have been put to other, better uses.
You would not have to delete it; it is true as written. The qualifiers “help” and “offset” are sufficiently broad to support the truth of the assertion. Besides, it’s not like code-remedy bottlers ever say “Gee, people are getting fewer colds. Good, now we can get back to finding a cure for cancer.” People spending money fleeing sniffles provides cash-flow for other drug research. Bring on the germs!
The purchase of the cold medicine actually increases the cost of the cold.
The fact that the purchase of the cold medicine provides economic activity does not equal a net economic benefit. The only way you could say it does is if those resources (capital, man-hours) would not have been utilized had the event not occurred.
Or as a previous poster put it, the broken window fallacy.
I wouldn’t trust anything you read on Wikipedia. I did some exploring there the other day and was absolutely shocked by what I found about how it works. Anyone can just go and edit a page and put up anything and the changes appear instantly. There’s no one checking the information out at all.
So for many controversial topics you just have bunch of edit wars where people are constantly undoing the changes of others.
Just check out the history of entries for “George W. Bush”, “Israel”, “Abortion”, “Catholic Church”, “Pope John Paul II” etc.
The Opus Dei page had some pictures of “torture devices” the other day and older versions of that page went into depth about how St. Escriva was a “Nazi” who secretly worked for “Franco”.
Other pages grossly misrepresent Catholic teaching and some of the articles on the Holy Father contained pornographic elements.
I tried to delete some of the nefarious bits myself, but somebody had come on and put them back up within 30 seconds! Arg. What a joke of a site.
Sounds a little like the Bastiat’s Broken Window Fallacy.
http://en.wikipedia.org/wiki/Parable_of_the_broken_window
By the way, I love your writings James, I’ve been reading them since maybe 1996 or so.
Chris Meisenzahl
http://amateureconblog.blogspot.com/
If that were true, it would be somewhat like what I hear when we have hurricanes, the logic is that the destruction is good for the economy as people rebuild. The mistake made in this thinking is that real wealth is lost.
If it were true, wouldn’t it make sense to intentionally demolish all kinds of things so they could be rebuilt? That would be _really_ good for the economy. 😉
Chris
http://amateureconblog.blogspot.com/