Frederic Bastiat addressed this common question in 1850, exposing the fallacy at the core of the argument. Still, we see it all the time today. It's thus worth the time to read what Bastiat wrote over 150 years ago and see how well truth and reason stand the test of time. What follows is the crux of his arguments pulled from the larger work:
Have you ever witnessed the anger of the good shopkeeper, James B., when his careless son happened to break a square of glass? ... every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation - "It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?"Destruction, even the partial destruction by restriction, does not net a positive. And this argument, taken to its logical conclusion, shows that restrictions such as taxation, regulation, and government "spending" are just so many partial (or full) destructions of value, making all of society worse off than it was before by violating the individual rights of citizens all along the way.
Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions. [And still does! --C. A.]
Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier's trade - that it encourages that trade to the amount of six francs - I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.
But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, "Stop there! your theory is confined to that which is seen; it takes no account of that which is not seen."
It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.
When we arrive at this unexpected conclusion: "Society loses the value of things which are uselessly destroyed;" and we must assent to a maxim which will make the hair of protectionists stand on end - To break, to spoil, to waste, is not to encourage national labour; or, more briefly, "destruction is not profit."
The reader must take care to remember that there are not two persons only, but three concerned in the little scene which I have submitted to his attention.
It is this third person who is always kept in the shade, and who, personating that which is not seen, is a necessary element of the problem. It is he who shows us how absurd it is to think we see a profit in an act of destruction. It is he who will soon teach us that it is not less absurd to see a profit in a restriction, which is, after all, nothing else than a partial destruction. Therefore, if you will only go to the root of all the arguments which are adduced in its favour, all you will find will be the paraphrase of this vulgar saying - What would become of the glaziers, if nobody ever broke windows? [all emphasis added]
- One of them, James B., represents the consumer, reduced, by an act of destruction, to one enjoyment instead of two.
- Another under the title of the glazier, shows us the producer, whose trade is encouraged by the accident.
- The third is the shoemaker (or some other tradesman), whose labour suffers proportionably by the same cause.
Breaking windows does not stimulate the economy; neither does taking a pane of glass from one man's window to fix another's. The glazier profits, but others lose, and the net result is "Society loses the value of things which are uselessly destroyed." Wealth redistribution is not profit. Stimulus spending is not profit. Destruction is not profit.