From Coordination Problem:
The Economics of the Undead
One of the more fun projects I've worked on recently was Economics of the Undead, edited by Glen Whitman and James Dow. That book just came out and all of the chapters are tongue-in-cheek looks at the way in which economic ideas might be applied to vampires, zombies, and all the rest. It's a great teaching tool for undergraduates, and a great deal of fun. It even has its own website, and the table of contents is here. Check it out!
My chapter "Eating Brains and Breaking Windows" is co-authored with Sarah Skwire, because while I know a lot about the broken window fallacy, I don't (or didn't) know much about zombies. Dr. Skwire, however, does. We tried to show that claims the zombie apocalypse would be good for the economy are examples of the broken window fallacy. Here's some excerpts from that chapter:
The night is dark and full of terrors. You cower in your basement, behind a barricaded door, shotgun and ax at the ready. You pray they will not find you. But you can hear them coming inexorably closer. Blood-curdling moans rend the eerie hush of a city gone into hiding. The limping drag of clumsy footsteps scrapes the floorboards above your hiding place. Relentless, rhythmic thuds warn you that the basement door is about to give way. And the crash of breaking glass, as more and more of them surround your home and fight to enter, announces in no uncertain terms, the arrival of the zombie apocalypse.A panicked economist hiding from zombies in the basement would find the sound of that breaking window evocative....However, seeing the zombie apocalypse as only a shift in types of spending disguises the actual loss in wealth that’s taking place. Consider Bastiat’s homeowner. If the window isn’t broken, he has both a functioning window and the new suit he purchases with the $100. But if the window is broken and then repaired, he must spent his $100, as in the first scenario, but this time he has only a functioning window. He doesn’t get to buy the new suit. And the tailor doesn’t get to sell it to him. The breaking of the window destroys wealth by forcing the homeowner to spend resources to get himself back to where he was before instead of increasing his well-being by acquiring the suit.....MORE
