“More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly.”

-       Woody Allen.

In Frédéric Bastiat’s parable, a shopkeeper has a window broken by his son and is obliged to pay, say, six francs to fix it. Some onlookers reason that breaking windows is a good thing, since it causes money to circulate – in this case, into the hands of a grateful glazier. But Bastiat points out that since the shopkeeper has had to spend six francs on getting his window repaired, he has been deprived from spending the money on anything else. The benefits of purchasing a new window are illusory, since they ignore the cost to the shopkeeper.

Consider, alternatively, the fates of Japan and Germany at the end of the Second World War. The economies of both defeated powers were shattered. Japan and Germany as nations may have lost the war, but their economies won the peace. Japan rapidly modernized into a robust industrial economy. Ditto Germany, which enjoyed what ‘The Times’ in 1950 called a Wirtschaftswunder, an economic miracle, as it emerged from the ashes. This has led some strategists to suggest, not entirely facetiously, that it would be in the best interests of an ailing industrial economy – Britain’s, say – to have its factories and economic infrastructure routinely and totally destroyed, every so often.

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