I was heartened to discover through RNZ podcasts that Frederic Bastiat’s Broken Window Fallacy made an appearance back on the 17th. Shamabeel Eaqub was there to begin a regular appearance on the afternoon programme talking economics, and for his first visit he talked about the fallacy of disaster economics:
The idea there is an upside to natural disasters – that they are good for the economy - is ‘a figment of our imagination’, economist Shamubeel Eaqub says.
We shouldn’t celebrate natural disasters or war or things that are destructive because ultimately what we find is the net impact is we are worse off than we would otherwise have been.
Eaqub told Afternoons there is a tendency to think there is a net-economic gain as a result of natural disasters such as earthquakes, because they prompt lots of visible economic activity such as cleanup, construction and repairs.
He says it's akin to digging a hole and then filling it up again.
“It frustrates me a great deal because it is a figment of our imagination.”
Great to hear good sense and Bastiat on the local wireless.
LISTEN HERE: The fallacy of disaster economics [audio] - RNZ