The Unbroken-Leg Fallacy

Tyler Durden's picture


Submitted by Robert Higgs via The Mises Economic blog,

In recent years, many people, at least in certain circles, have become familiar with Bastiat’s broken-window fallacy and have come to recognize that Keynesian macroeconomic policy amounts to little more than this fallacy writ large.

Perhaps even more important is what we might call the unbroken-leg fallacy. This is the presumption, which underlies all sorts of state intervention, both macroeconomic and microeconomic, in the market system, that the participants in markets are perfectly capable of acting more productively but, owing to various “market failures,” are not doing so on their own and require state action to repair the situation. The fallacy is that this reasoning completely ignores the countless ways in which the state’s own intrusions and engagements in the economic system in effect “break the legs” of private-sector actors by distorting prices (including interest rates), penalizing productive actions, and subsidizing destructive actions. Having invaded the economic order like the proverbial bull in a China shop, the state’s kingpins, functionaries, and intellectual bootlickers then have the chutzpah to blame “market failures” for the wreckage they themselves have created — an ever-changing hodgepodge of bad incentives, misdirected state efforts, and ominous fears about further unsettling state actions to come.

Owing to the built-in feedback that occurs in a genuinely free, profit-and-loss-based market system, people do not systematically err and fail in their multifaceted efforts to coordinate their own economic activities — unless, that is, the state runs amok, breaking their legs willy-nilly and crippling the operation of the price system. Economic analysis and policy-making that disregard this reality rest on a fallacious foundation.

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 04/30/2014 - 16:58 | 4713718 NotApplicable
Wed, 04/30/2014 - 17:03 | 4713736 Colonel Klink
Colonel Klink's picture

"A little while later a neighbor said he saw him leaving his nearby apartment while dressed in black exercise clothing."

It must have been Lululemon's line of assault exercise clothing.

Wed, 04/30/2014 - 17:31 | 4713839 James_Cole
James_Cole's picture

Considering a certain recent princeton study demonstrated a near one to one relationship between big business interests and .gov policy in the US one must wonder whether the problem is the institution of government itself or perhaps how and who it is run for?

Thu, 05/01/2014 - 15:32 | 4717289 Anusocracy
Anusocracy's picture

Governments have stolen, killed, enslaved, and destroyed since it developed.

That's a real long time before .gov created corporations.

Wed, 04/30/2014 - 17:17 | 4713783 DIgnified
DIgnified's picture

Coincidentally, PNC Financial is under investigation:


Wed, 04/30/2014 - 16:59 | 4713720 DOT
DOT's picture

My windows aren't broke -but is there a subsidy ?  I can break 'em.

Wed, 04/30/2014 - 17:04 | 4713729 lakecity55
lakecity55's picture

"Comrades! We are close to the end of our transformation of the USA into the USSA! Central Planning has been a success for our grip on Power as a Party! This week I have begun to dismantle Pro Basketball! Comrade Johnson will kick back 40% of the gross to the Party coffers! Soon, the Ashkenazi who thought they had me under their grip will feel the strong ebony steel of Black Power!"

Forward, Soviet!

Wed, 04/30/2014 - 17:02 | 4713730 davidalan1
davidalan1's picture

did he say penal? ize 

Wed, 04/30/2014 - 17:02 | 4713732 AnAnonymous
AnAnonymous's picture

Funny how 'americans' love to refer to Bastiat when he frowned (to say the least) so much on land grabbing.

Whatsoever, public/private, what matters is 'american'.

The 'american' private sector, the 'american' public sector, both are 'american'.

Wed, 04/30/2014 - 17:10 | 4713763 NotApplicable
NotApplicable's picture

You've got to be the most pathetic troll I've ever seen on the internets.

Wed, 04/30/2014 - 17:19 | 4713796 BigJim
BigJim's picture

He's even more of a non-sequitor merchant than FlakMeister and James_Cole, which is saying something.

Wed, 04/30/2014 - 17:23 | 4713817 James_Cole
James_Cole's picture


Wed, 04/30/2014 - 17:37 | 4713860 kurt
kurt's picture

He's "special" in the current usage.

Wed, 04/30/2014 - 20:28 | 4714347 Intoxicologist
Intoxicologist's picture

I think FourthStoogeing refers to it as "Non-sequiturd." 

Make me laugh!

Wed, 04/30/2014 - 21:40 | 4714561 TheFourthStooge-ing
TheFourthStooge-ing's picture

I've hammered a countless number of times that discontinuity is none between kick the can, do not address the reality at hand, find someone else to pass the bucket, the great communauty of crime, the quest for symetry when it is so obviously asymetrical, devolution to the bottom.

Leg brokeness or unbrokeness, still is kicking the can in row z...

Useless to depict it as a humanity issue, sacrifice for the welfare/advance of humanity. Only a consenting person who wants to believe the lie while knowing it is a lie can accept that drivels.

Completely surreal, you know, reality does not care. That is the bit with mattering relativeness.

Wed, 04/30/2014 - 17:21 | 4713807 Yen Cross
Yen Cross's picture

      I'll second that opinion and raise you +1...

Wed, 04/30/2014 - 17:02 | 4713734 Stoploss
Stoploss's picture

Desperately searching for something we don't already know..


On to the next post!

Wed, 04/30/2014 - 17:03 | 4713737 goldhedge
goldhedge's picture

As long as your 3rd leg is working you will be fine.

Wed, 04/30/2014 - 17:04 | 4713738 1stepcloser
1stepcloser's picture

Why can't tyler have the Big Titty Policy article...I didn't need to see that

Wed, 04/30/2014 - 17:11 | 4713769 NotApplicable
NotApplicable's picture

Makes me afraid to go back to the main page.

Wed, 04/30/2014 - 17:06 | 4713746 0b1knob
0b1knob's picture

I thought the unbroken-leg fallacy was something like:  My leg has never been broken.  Therefore my leg is unbreakable.  

Wed, 04/30/2014 - 17:08 | 4713753 Frank N. Beans
Frank N. Beans's picture

looks like that hockey stick recovery...ouch


Wed, 04/30/2014 - 17:09 | 4713759 Rainman
Rainman's picture

somebody has to say it  .  Joe Theisman .

Wed, 04/30/2014 - 17:25 | 4713819 Colonel Klink
Colonel Klink's picture

Except that must be Joe Ankleman's break.  OK I was stretching with that, just like the ankle.


Wed, 04/30/2014 - 17:24 | 4713821 1stepcloser
1stepcloser's picture

He selling reverse mortgages now?  Oh oh right pro beta prostate

Wed, 04/30/2014 - 17:27 | 4713832 Stuck on Zero
Stuck on Zero's picture

Funny.  I don't think even Keynes recommended massive government intrusion in the economy and record deficits when the economy was growing. 

Wed, 04/30/2014 - 17:35 | 4713854 kurt
kurt's picture

If you buy da protection we dona breaka da leg.

Do NOT follow this link or you will be banned from the site!