Save the Economy: Nuke a City

Yes, dear reader, the title of this article is not a misprint.  I am advocating that we take one US city and level it.  Think of all the economic activity that will result as the country bends its time and resources to rebuilding the city.

Now, to be sure, I don’t mean that we do this unannounced and without warning.  There could be a national lottery wherein one city, chosen at random, would be slated for total demolition.  The citizens would be given ample time to pack up their belongings, family pets, and the like.  Spaces for them in nearby cities and suburbs would be secured where these lucky ones wait until their new homes are ready.  Once the city was cleared, a bomber could fly overhead and drop a small nuclear weapon onto the heart of the downtown district.

Once the heat and radioactivity have faded, tens or hundreds of thousands of workers, who had spent the intervening time studying under government sponsored job-retraining programs, can swoop in, clear out the remains, and rebuild the city.  In relatively short order, the residents could return to a brand new, shiny community ready for action.

Note the abundance of economic activity this city-revitalization would spur; how numerous industries would see an influx of revenue.  Local transportation and rental housing (homes, hotels, motels, campgrounds, or whatever) would see a spike in demand during the outflow of the population prior to the extreme makeover.  The military-industrial complex would also get a piece of the action since they would be responsible for the bombing run, which would keep munitions manufacturers and aerospace corporations profitable.  Of course, the greatest win-fall goes to the construction and materials companies whose job it is to rebuild the new and gleaming metropolis.

Hmmm…..

Sounds ridiculous doesn’t it.  Who in their right mind would ever advocate wanton destruction just for the flurry of activity that would result?

Take a peek at some of the places where this idea rears its ugly head.

In our first example in the circus of the economic bizarre, consider, if you will, the possibility of space aliens attacking the planet as a rallying cry for economic production

In this space alien piece, from 17 to 30 seconds, the ‘host’ of the show literally says:

Wouldn’t John Maynard Keynes say that if you employ people to dig a ditch and then fill it up again, ah, that’s fine, they’ve been productively employed…

How strange of a definition he presents for ‘productively employed’.  How is digging a ditch only to fill it up again productive?  Makes the ‘nuke a city plan’ sound positively brilliant.

Our second offering in our gallery is more whimsical.

Taken from the movie ‘The Fifth Element’, this scene mocks the idea that destruction ultimately leads to progress.  But an idea has to exist in the first place to actually be mocked and this particular idea seems to have been around for quite some time.

Perhaps the best argument against this kind of thinking comes in ‘The Broken Window’ parable written by Frederic Bastiat in 1850.  In this short essay, Bastiat examines the unseen costs (lost opportunity costs) of having a perfectly fine window broken and the vapid thinking that says that that destruction is beneficial to society.

Of course, a little destruction may be beneficial when it removes a valueless or costly thing out of the way of a new thing that actually brings value to society, but that we need to be very sure that the thing being replaced is valueless.  As Henry Hazlitt says in his book ‘Economics in one lesson’

It is never an advantage to have one’s plants destroyed by shells or bombs unless those plants have already become valueless or acquired a negative value by depreciation and obsolescence. ... Plants and equipment cannot be replaced by an individual (or a socialist government) unless he or it has acquired or can acquire the savings, the capital accumulation, to make the replacement. But war destroys accumulated capital. ... Complications should not divert us from recognizing the basic truth that the wanton destruction of anything of real value is always a net loss, a misfortune, or a disaster, and whatever the offsetting considerations in a particular instance, can never be, on net balance, a boon or a blessing.

- Henry Hazlitt

It seems to me that the key phrase ‘unless those items [sic] have already become valueless or acquired a negative value by depreciation and obsolescence’ is conveniently omitted from the regular dialog.

Trained economists, no doubt, know and understand this subtlety, but if they do they like to keep it to themselves.  The average level of discourse in the media is well typified by the two clips above.  It seems to me that we should be very cautious in concluding that an object is truly valueless and that destruction is the correct course of action.  I’m not saying that such a conclusion should be rare but rather that it should always be highly scrutinized.  When we get to the point of saying that it would be better to have people dig ditches just to fill them back up then we’ve run out of good ideas.  And when we’ve run out of good ideas, nuking an entire city starts to look a lot more attractive.

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