I was very careful in my comment not to directly use the term "economically beneficial", as wars are provably detrimental to the economy holistically. It's only beneficial to the abstracted idea of "economy" many modern economists and GDP-discourse folk subscribe to.

Bastiat's parable alone is not particularly convincing in itself as it chooses to deal exclusively with currency (something that's provably debunkable by looking at economic systems even slightly more complex than the oversimplified whims of one shopkeeper), and not with the allocation of resources to society in general, which is much more negatively impacted by war / broken windows.

I think wars can be straightforwardly economically beneficial, but only if spending is politically constrained.

How???

The idea is if you can spend money on a bomb, you have some money that flows through a production chain, giving people employment, and at the end you get an item (the bomb) and you destroy it. It would be strictly better if you did anything else with the money, that resulted in the same employment spending but you'd have less value left at the end to destroy. But say that you live in a militarized society where it's easy to agree to fund bombs but very hard to agree to fund social services. Then the bomb may be your only option, and it's still better for your economy to build the bomb than not.

It's the broken-window effect, if your political system is captured by a glassmakers' lobby.

What does "economically beneficial" means in this context?

I agree that some measures of economy (GDP? unemployment?) would get better in this scenario, but the whole effort wouldn't serve any other purpose than to increase those values, making it a little pointless.

I guess if this is what you're trying to say, then it is indeed an indictment of how we do economy.

Yeah I guess I view the economy as a system for maximizing value. This largely happens through consumptive spending. So this entire thing is a weird backdoor mechanism for giving people money for consumptive spending and burning their labor in exchange.

Could you just give people the money without burning their labor in spectacular explosions? Yes. But we don't. :shrugs:

Wow this is basically Keynesian gold digging but perverted to an even higher degree. Keynes idea was that we burry bank notes and tell people to dig them up as proof of work. Of course Keynes mentioned building houses and the like would be a better idea but if the political environment wouldn't allow it (guess what hasn't changed?) then any crackpot idea that brings money into the hands of those desperate for employment would be better than doing nothing. I guess you can take this idea too far. If the political environment got so bad the only way to justify further employment is (preparing for)war we should take a step back and really think about what we should be doing instead.

You're ignoring what the bomb does.

> it's still better for your economy

No. It's not. It's always worse in every way other than pure monetary terms.

> You're ignoring what the bomb does.

I mean sure, but that's contingent, not required. For instance, imagine two nations going to war with combat robots that can be perfectly recycled. The only effect is direct consumption of labor. However, due to the militarized society, the labor would be worthless otherwise.

Well, it's not really a fallacy if you account for political impediments to just giving people money.

In other words, war can compensate for a "demand shortage," notwithstanding that in a sensibly run economy, such a thing should never be expected to exist.

It's pretty easy to print money..

(Yet, sometimes like around 2008 countries still fail.)

What is not easy is getting that money on the hands of the people, instead of a few rich folks.

If the rich folks spend it, it gets into the hands of other people.

If the rich folks keep it, then it doesn't contribute to anything (eg not to inflation), and you can just print more.

In fact, the latter is much better: you can have your central bank gradually buy up the rest of the world without any inflation nor devaluation of your currency.

If the rich folk spend it, it gets in the hands of other people exactly insomuch as the other people are required to make something that the rich people want. That is increasingly not a given. And of course, it also burns some portion of those people's economic output on Rich People Interests.

If the rich people "X" it and it gets in the hands of other people without burning those people's economic output on RPIs, then X is called "donating", not "spending". And in that case, we might as well cut out the middleman, cough UBI cough.

With spending money being a proxy for labour, I'm disappointed that the article mentions labour only once.

20th century economics has a thing or two to add over those simple ideas.

What things?

There is a huge amount of complexity created by price-stickness and other non-rational behavior.

There exist (with quite a lot of empirical validation) some situations where moving the money around improves the society, even if the reason the money is moving is a slight loss.

Are you saying that going around breaking random windows is actually good for society?

It may be, it may not be, depends on some factors.

It's not as simple as "spending money on wasteful things doesn't benefit anyone", but it is always the case that if you would gain even from breaking windows, you would gain even more from spending on something useful.