https://www.techdirt.com/articles/20180613/00240240023/net-neutrality-broken-windows-fallacy.shtml

I've mentioned the idea of the broken windows fallacy -- not to be confused with the long debunked broken windows theory of policing -- twice in the past in reference to net neutrality, including in my recent post about what Ajit Pai should have said about repealing net neutrality. But both times I talked about it, it was kind of buried in much longer articles, and the more I think about it, the more important I think it is in understanding why Pai and his supporters are so far off in their thinking and understanding on net neutrality. What I find most perplexing about this is that people who often position themselves as doing away with overly burdensome regulations -- which is a stance that Pai has staked out pretty clearly -- are usually the kind of folks who talk frequently about the broken windows fallacy. And yet, here, those same folks seem to be missing it.

As background, the broken windows fallacy comes from Frederic Bastiat, the French economist often associated with free market and libertarian thought, and it's his clever and highly evocative way of explaining why destructive behavior -- while it may generate economic activity, is not good for the economy, because it misses all of the other (often hidden) costs, including the opportunity cost of investing that money in more productive activity. Bastiat's version went as follows: