We heard over and over from President Obama and now President Biden that our “investment” in green-energy sources will not only help to save the planet from warming but create lots of really good jobs to boot. You’d have to be a true reprobate not to want that wonderful combination.
Not so fast. What if those jobs entail the waste of resources, making us poorer rather than wealthier?
In this AIER article, Duke professor Michael Munger argues that the “green energy creates jobs” claim is just another instance of Bastiat’s broken-window fallacy.
Here’s a slice:
Frederic Bastiat famously showed that destroying wealth creates jobs, in his discussion of the broken window fallacy. But there was a broader context for Bastiat’s observations on the seen and the unseen: a serious proposal that all of Paris should be burned down. Yes, because it would create jobs. Really.
Bastiat referred to research (“studies show!”) done by a fellow Frenchman on this score:
“What will you say, disciples of good M. Chamans, who has calculated with so much precision how much trade would gain by the burning of Paris, from the number of houses it would be necessary to rebuild?” (From The Broken Window)
Now, it appears that Bastiat was having a little fun; Auguste Louis Philippe de Saint-Chamans (1777–1860) was a viscount and a high-level French government official. Viscount de Saint-Chamans had argued that London’s “Great Fire” (1666) had led to substantial net economic gains; he had not said anything about Paris.
As with so much of the economic nonsense uttered today, Bastiat anticipated it by a century and a half.
Read the whole thing.