Have you heard the parable of the
broken window? It's a wonderful example of unintended consequences that applies
not only to businesses activity and government regulations, but to individuals
as well. Fans of the book "Freakonomics" are given a front row
seat to watch the dramatic and always surprising (they are
"unintended" after all) effects of unintended consequences.
But in our haste to laugh and condemn the short-sighted
thinking of others, we often don't see the unintended consequences we are
creating in our own lives.
The broken window fallacy, as it is
often called, was introduced by French economist Frederic Bastiat in 1850 in
his essay, "That Which is Seen and That Which is Unseen." The parable
is about a shopkeeper's boy who accidentally breaks a window at his father's
store. A bystander commiserates with the shopkeeper, but explains that the
broken window is actually a blessing because now the window replacement company
gets to earn money replacing the pane. read more...
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