Hazlitt begins with the story of a broken pane of glass at a bakery. Certain people take the view that the breaking of this glass is of social benefit because the smashed window will provide employment for a glazier and money which he can spend with other businesses, and so on, ad infinitum.
However, let’s look at things from the point of view of the baker. He will be out of pocket. Perhaps he was planning to spend on a new suit. So, instead of having an unbroken window and a new suit, he is out of pocket, suit-less and has a mere replacement window. In that act of destruction, what is the glazier’s business gain is the tailor’s loss: no new employment has been generated.
The difficulty is that the public will see the new window but they will never see the new suit because it will never be made.
See also this superb Learn Liberty video: