Tim Harford uses Bastiat’s “broken window fallacy” to explain the economics of urinal cakes:
Dear Massimo,
When I read the first sentence of your letter, I was wondering where you were going with this. Not to worry: your question is easily answered. The 19th century French economist and essayist Frédéric Bastiat anticipated it with his famous “broken window fallacy”. A broken window seems good for the economy because it creates work for the glazier. But Bastiat pointed out that the money that the window-owner pays to the glazier is money he can’t spent on something else. The glazier is richer, but the tailor or the restaurateur or the escort girl is poorer. The broken window hasn’t stimulated the economy at all.
In short, don’t think you’re doing anyone a favour by aiming squarely at the urinal cake in front of you. And don’t even think about aiming at the urinal cake in front of someone else.
