Steve Horwitz

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 will be out on July 25th (but you can pre-order) 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.

The parallels to the zombie apocalypse are clear. Once people perceive the threat of a zombie apocalypse, the expenditures they undertake to protect themselves or to search for an escape or a cure are the equivalent of payments to the glazier. Even if those expenditures are successful at heading off the apocalypse, or finding a cure once it starts, they do not add to economic well-being. Had there been no zombie threat, the resources spent on staving off the undead could have instead been spent on food, clothing, technology, art, or anything else people wanted. In such a world, we would have both no threat of a zombie apocalypse and all of those consumer goods. Being forced to spend resources to simply maintain the status quo against some external destructive force, whether nature, society, an invading army, or howling hordes of the undead, is not a path to wealth. The same is true of cleaning up from any form of disaster: those expenditures simply get us back to where we were before the disaster occurred.

Given an imminent zombie apocalypse, it is certainly sensible to take precautions, to try to find a cure, and to clean up the destruction. However, that is not the same as saying an invasion of the undead would improve economic well-being. As the economist Ludwig von Mises argued a century ago: “War prosperity is like the prosperity that an earthquake or a plague brings. The earthquake means good business for construction workers, and cholera improves the business of physicians, pharmacists, and undertakers; but no one has for that reason yet sought to celebrate earthquakes and cholera as stimulators of the productive forces in the general interest.” Had the prospect of a zombie apocalypse loomed, Mises might well have included that in his list of disasters not to celebrate. Compared to a world free of zombies, a world plagued by the undead will be a much poorer one. As economists Wayne Leighton and Edward Lopez say of the very similar expenses we undertake to prevent our computers from being infected: “it’s arguably all a waste, because antimalware products would have zero value were it not for hackers.”And were it not for the undead, all of these expenditures would have zero value.

...

In the end, a zombie apocalypse has no silver lining. Should the zombies prevail, concerns about economic well-being will be moot. Should pockets of uninfected humanity somehow survive this unnatural disaster, any remaining resources would be used for rebuilding as they are after more natural calamities. Even these pockets of humanity, managing to truck, barter, and exchange among the broken windows and corpse-pits, will not be what they once were. As one of the final speakers observes in World War Z, “I’ve heard it said that …even those who managed to remain technically alive were so irreparably damaged, that their spirit, their soul, the person that they were supposed to be was gone forever. I’d like to think that’s not true. But if it is, then no one on Earth survived this war.” And even that is not the bleakest version of the zombie apocalypse—because it is important to remember that not all accounts of the zombie apocalypse are as cheerful as Brooks’s vision of cannibalism, smuggling, panic, slaughter, and a surviving world population that is a tiny fraction of the population from pre-zombie days. Scott Edelman’s “The Last Supper” argues that an apocalyptic engagement with an ever-increasing population of nearly indestructible consuming machines, devoid of logic, dead to any desire but the desire for human flesh, can end in no way but in the tragedy of the commons, as the zombies mindlessly over-consume their food source. “The streets were filled with an army of the hungry, devourers who no longer had objects of desire upon which to fulfill their single purpose.” In visions like Edelman’s, when the zombies consume the last human, as they must, there will be no one left to fix the windows.