The Broken Household Fallacy

Remember the broken window fallacy? In case you don’t, it’s a fallacy that underlies much bogus economic reasoning, according to which, when bad things happen to people (e.g., when a kid throws a rock through your window) it is actually good for the economy because it provides economic stimulus.

Actually, it doesn’t. If your window gets broken you have to pay to get a new one, and that does give money to the window-makers and provide economic stimulus in that area, but in reality there’s a net loss to the economy: If your window was never broken then you’d have both a good window and the money you would have spent to replace it. Unless that money goes to the Land of the Lost, it’ll eventually get spent (by you or your heirs) and thus provide economic stimulus. It might not be given to a window-maker, but it’ll get given to someone.

Say that replacing a broken window costs $50 (to pull a number out of the air). Which is better for you (and society) to have: a broken window and $50 or a good window and $50? More wealth is in existence if you have a good window and $50 than if the window gets broken and $50 has to be spent to replace it. Surprise! Bad things like broken windows really are bad.

Now let’s think about this:

1. A family consisting of a dad, a mom, and children would like more money.
2. The mom decides to get a full-time job outside the home to make that money.
3. Mom makes money!
4. The family has the additional money it wanted.
5. Society benefits by having an additional worker in the workforce.
6. Every family gets the same idea and does likewise.
7. Society benefits economically from "not having half its potential workers out of the workforce."

Right?

Well, think about this (and BE SURE to read the important note at the bottom):

1. BROKEN WINDOW #1: Since mom is working outside the home, somebody has to take care of the children, so they are put in outside-the-home schools or daycare centers. The family pays for this either directly by fees or indirectly by taxes.
2. BROKEN WINDOW #2: The family is not willing to have all of mom’s salary go to paying someone else to be a surrogate mom, but the alternative caretakers are not willing to be paid only a fraction of a normal salary. They need to make a living, too, so they aggregate the children of different famlies together to get economies of scale going. This means each child gets less attention than if mom were the caretaker.
3. BROKEN WINDOW #3: It also means that the children operate in a standardized environment that is less customized to their individual needs than the home would be (e.g., if the slow learners in class set the pace of learning then the fast learners are slowed down and visa versa mutatis mutandis).
4. BROKEN WINDOW #4: By being shipped to child aggregation centers, very young infants end up not being breastfed for the first year of life, with the result that their health suffers..
5. BROKEN WINDOW #5: By being taken care of by someone other than their parents, the influence of the parents over the children is weakened as they become attached to their caretakers.
6. BROKEN WINDOW #6: The children begin to adopt the values and ideology of the aggregation environment, which can never fully reflect the parents’ wishes since it must cater to the needs of children of different families which have parents with different beliefs–and that’s assuming that the caretakers aren’t idealogues trying to push a particular agenda on the children. Further, most of the socialization (raising) is done by child-to-child interaction rather than adult-to-child interaction. In other words, to a significant degree the kids "raise" themselves.
7. BROKEN WINDOW #7: Friction errupts in the home as the values the child has absorbed from the caretakers are brought into conflict with the values of the home.
8. BROKEN WINDOW #8: Many children end up alienated from their parents and doing things that significantly harm themselves (e.g., drinking, taking drugs, having sex). These result in health problems, human suffering, and a rise in the number of children murdered by abortion.
9. BROKEN WINDOW #9: By aggregating children together on a daily basis and by making it hard for them to be pulled out unless they are really sick (e.g., mom has to take a day off to care for a sick child), the kids get sick more often, resulting in higher medical costs and human suffering.
10. BROKEN WINDOW #10: Since mom can’t be in two places at once, she can’t both be at her job and taking care of domestic needs in addition to childcare (cleaning, shopping, cooking, etc.). This means (a) that these must be done after work, increasing her stress level (and likely that of her husband as well as he will want to help if he is at all a person of conscience) or (b) someone else is paid to do them or (c) nobody does them and the family suffers.
11. BROKEN WINDOW #11: Because some domestic needs like food provision have to be done, stressed families will increasingly turn to food that is prepared outside the home and that is quick and convient. Such "for profit" food will be configured to maximize profits for its makers. This means pushing more profitable rather than more nutritious food on the public, as well as pushing more food on the public, leading to health problems, medical costs, and human suffering.
12. BROKEN WINDOW #12: Moms will increasingly feel the stress of juggling job and family, leading many to feel like they are expected to be "superwomen" and effortlessly achieve things that no one person should be expected to do.
13. BROKEN WINDOW #13: At some points in their lives, particularly in late pregnancy, with an infant in the house, or when small children are in the house, women will either put their careers "on hold" or otherwise have the consequences of what is going on in their lives impinge on their work environment (e.g., by cutting back number of hours worked), causing their career to suffer. As a result, more men than women will end up in higher and higher-paying positions, leading to dissatisfaction, charges of discrimination, and lawsuits.
14. BROKEN WINDOW #14: Calls of "equal pay for equal work" will result in the erroding of the family wage idea. Since the norm is now for a family to have two wage-earners, the idea than an individual wage-earner should be able to support a family on the income received will go away as employers begin configuring salary scales predicated on a two-income family. Thus the gains in income by the first generation of moms entering the workforce will be lost in the second generation as incomes fail to grow as quickly in order to accomodate the family wage concept.
15. BROKEN WINDOW #15: Wages are also depressed from where they would be more directly: By doubling the number of people competing for a position, labor is in abundant supply and will have the effect of lowering the salaries laborers can command by a standard supply-and-demand dynamic.
16. BROKEN WINDOW #16: As a result of the above effects, voters will turn to government to provide social programs to ease their difficulties (e.g., government-subsidized childcare). These programs represent an additional cost that the family will have to pay indirectly through taxes.
17. BROKEN WINDOW #17: As families feel the pinch of higher taxes, calls will be made for the wealthy to pay more in taxes than regular folks. This results in the wealthy having less money to invest in the economy because the money is being taken out of the economy and being shuttled through government programs that are inherently less efficient than the market because they are shielded from supply-and-demand considerations. The economy thus shrinks, meaning fewer job opportunities, fewer raises, and more layoffs.
18. BROKEN WINDOW #18: As families turn to the government to solve problems that the family once solved for itself (e.g., how to raise and educate a child), the government becomes more and more intrusive into family life, creating models that try to standardize the handling of situations, leading to a loss of parental freedom (e.g., can you spank your child or is that child abuse? must your child be taught evolution only or can he be taught intelligent design?).
19. BROKEN WINDOW #19: As families feel the pinch of the above considerations, they begin to decide that–in financial, emotional, and time concerns–they cannot afford as many children any more. There are fewer large families and more small ones. Eventually the number of children falls below the replacement level.
20. BROKEN WINDOW #20: As the childbirth rate falls below the replacement level, attempts will be made to cover the gap by increasing immigration, often illegal immigration. These attempts either will fail or will radically change the nature of American culture or both.
21. BROKEN WINDOW #21: As a result of immigration, including and especially illegal immigration, there will be more competition for jobs, depressed wages, and additional costs to the taxpayer (e.g., emergency medical care) that are not covered by the immigrants due to the fact many are illegals not paying taxes.
22. BROKEN WINDOW #22: As a result of increased immigration, and especially illegal immigration, a nativist movement will emerge resulting in friction between the nativists and the immigrants.
23. BROKEN WINDOW #23: Because birth rates begin to fall among the immigrants, and because birthrates are falling world-wide, immigration proves not to be a long-term solution to the problem, leading to proposed other solutions to keep the economy from shrinking–like extending the retirement age. That means many people will have to work longer before they get to retire. (And which also is likely not to solve the problem.)
24. BROKEN WINDOW #24: As the working population begins to shrink the burden of caring for retirees (by Social Security, Medicare, Medicaid, and direct personal care of family members) begins to grow for each two-income family. This causes further pressure to keep the number of children down since, by government mandate and human compassion, more resources must go to caring for the retirees.
25. BROKEN WINDOW #25: Because of the increase in the burden of caring for the elderly, increased deaths through euthanasia occur.
26. BROKEN WINDOW #26: Because of the pressure families are under, the divorce rate goes up, harming everybody in the family.
27. BROKEN WINDOW #27: Because of the rise in family break-ups, the out-of-wedlock birthrate goes up (harming children and single mothers, particularly), but it is not enough to offset the overall shrinkage of the population.
28. BROKEN WINDOW #28: As the birthrate continues to shrink, the economy shrinks, leading to a generational depression (because it will take a generation to turn it around by conceiving and raising the workers needed to get the economy growing again).
29. BROKEN WINDOW #29: Because of the interlinkage of the global economy, a global generational depression happens.
30. BROKEN WINDOW #30: Because of economic shrinkage. the United States starts being less generous with the rest of the world and is less able to serve as global policeman.
31. BROKEN WINDOW #31: An increase in warfare occurs as nations compete for scarcer-resources due to the depression and due to the lessened stabilizing role of the United States.
32. BROKEN WINDOW #32: A civilizational crisis explodes and the situation gets dramatically worse until a restructuring of societal values along more traditional lines (especially having more babies!) is achieved.

IMPORTANT NOTE: The above represents a line of economic reasoning rather than moral reasoning. In particular:

• It is not a policy proposal.
• It does not suggest that there should be no two-income households.
• It does not suggest that women should be driven from the workforce.
• It does not suggest that immigration should be stopped (I myself have worked very hard to facilitate the immigration of a particular individual).
• It does not suggest that no children should be cared for or educated outside the home.
• It does not suggest that the two-income family is the only source contributing to the problems mentioned above.
• It does not suggest that the two-income family will lead to the death of western civilization. Not all of the items mentioned in the above scenario may occur (especially the more futuristic ones) and alternative solutions may be found to some of them (e.g., another technological revolution equivalent to computers and the Internet increases productivity and keeps the economy growing).
• It does not even suggest that the costs of the two-income household outweigh the benefits of it.

What it does do is point out that the idea that by having two-income households be the norm does not automatically benefit the economy. There are economic and other costs (the broken windows) associated with having a society with nuclear families where both parents work outside the home. How many of those costs a society should be willing to bear and thus what degree of two-income families there should be is an entirely separate question (which gets to the morality subject).

What it also does is point out that raising and educating children in the home is itself work! It is work that makes a valuable contribution to society and, if someone is not available in the home to do it then it has to be handled another way. That means that the advent of the two-income household is not simply an economic gain to the family or to the economy as a whole. It also has significant costs that have to be weighed in determining whether or not it should be pursued.

That calculus, of what benefits one is willing to pursue and at what costs, is what economics is all about.

Author: Jimmy Akin

Jimmy was born in Texas, grew up nominally Protestant, but at age 20 experienced a profound conversion to Christ. Planning on becoming a Protestant seminary professor, he started an intensive study of the Bible. But the more he immersed himself in Scripture the more he found to support the Catholic faith, and in 1992 he entered the Catholic Church. His conversion story, "A Triumph and a Tragedy," is published in Surprised by Truth. Besides being an author, Jimmy is the Senior Apologist at Catholic Answers, a contributing editor to Catholic Answers Magazine, and a weekly guest on "Catholic Answers Live." View all posts by Jimmy Akin