error_outline Economic Fallacies
Common errors in economic reasoning
format_quote Quotes
"In the economic sphere, an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects unfold only subsequently; they are not seen. Between a bad and a good economist, this is the whole difference: one confines himself to the visible effect; the other takes into account both the effect that can be seen and those effects that must be foreseen."
menu_book That Which Is Seen, and That Which Is Not Seen
View Full Quote"The General Theory was not truly revolutionary at all but merely old and oft-refuted mercantilist and inflationist fallacies dressed up in shiny new garb, replete with newly constructed and largely incomprehensible jargon."
menu_book Keynes, the Man
View Full Quote"He had the tactical wit to dress up ancient statist and inflationist fallacies with modern, pseudoscientific jargon, making them appear to be the latest findings of economic science."
menu_book Keynes, the Man
View Full Quoteauto_stories Books
That Which Is Seen, and That Which Is Not Seen
Famous essay introducing the concept of opportunity cost and the broken window fallacy, arguing economists must consider both immediate visible eff...
Read MoreEconomics in One Lesson
Classic introduction to economic thinking, demonstrating that good economics considers both the immediate effects and the longer-term effects on al...
Read MoreKeynes, the Man
Rothbard's critical mini-biography of John Maynard Keynes, portraying him as shifty and manipulative and arguing that his celebrated 'General Theor...
Read Morepsychology Concepts
The Broken Window Fallacy
A logical error in economic reasoning first described by Frédéric Bastiat in his 1850 essay Learn More
The Cantillon Effect
The Cantillon Effect is an economic concept explaining how newly created money does not affect everyone equally. When new money enters the economy,...
Learn MoreCorrelation-Causation Fallacy
The error of concluding that because two variables move together, one must cause the other. A statistical correlation between two series (for examp...
Learn Morebalance Sophisms
A Dividend Is Not Money Destroyed
"Billionaires prefer paying shareholders over hiring: for every euro spent on jobs, LVMH spends 239 euros on shareholders."
Read the rebuttalA Low Rate on 'Economic Income' Is Not a Gift
"Billionaires are rich thanks to tax giveaways: the 378 wealthiest households pay only 2% of their economic income in tax."
Read the rebuttalJob Counts Are Not the Measure of Prosperity
"Billionaires don't create jobs: large corporations cut 173,000 positions while small and mid-sized businesses added 1.9 million."
Read the rebuttalInheriting Capital Is Not Stealing It
"Billionaires have no merit: 80% of their wealth is inherited."
Read the rebuttalNo Detectable Bump Is Not 'They Don't Invest'
"Billionaires don't invest: companies whose shareholders were subject to France's wealth tax (ISF) did not invest more once it was abolished."
Read the rebuttalA Correlation Is Not a Recession Machine
"Billionaires cause economic recessions: for every extra percentage point paid to the top 20%, GDP falls by 0.08%."
Read the rebuttalSpeculation Is Not the Opposite of Usefulness
"Billionaires don't finance the real economy: 96% of financial transactions are purely speculative."
Read the rebuttalEmployees Aren't the Only Source of Value
"A business owner can only get rich off the productivity of the people he employs."
Read the rebuttalWorking More Doesn't Create More Value
"A boss doesn't work a thousand times harder than his employees, so he doesn't deserve to earn a thousand times more than them."
Read the rebuttalWealth is not a zero-sum game
"There are more rich people because there is more poverty. Zero-sum game."
Read the rebuttal