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Some economists argue for the advantages of destruction; however they confuse need with demand. Demand requires not just need but purchasing power. This does not mean printing money: the more money created, the less it is worth in relation to goods and services.

Yes, the destruction of war did make more business for the producers of specific things, but what took place was a diversion of demand to particular products from others. As Hazlitt rhetorically attests:

No man burns down his own house on the theory that the need to rebuild it will stimulate his energies.

Those who support destruction theory forget that supply and demand are two sides of the same coin. They are the same thing looked at from different directions. Yes, there is a need to replace older equipment or machinery, but there is always an optimum rate if replacement and a best time for it.

However, these replacements can only be made with savings or capital accumulation, which war destroys.

Comments & Responses

One Response so far.

  1. Benjamin Barton says:

    But societally recessions are a good thing. It stops us being wasteful and complacent, which is beneficial to all of us. We simply need to ensure that when Capitalism falls, the withdrawls of its benefits to society are not felt as keenly or as sharply as they have been. Surely to go about deliberate economic destruction is a bad thing, but the fact that, from time to time, recessions occur within the natural order of things, can only be a good thing.