the Keynesian Broken Bridge Fallacy

Frequent Bridge Collapses Help Boost China’s GDP por Brian Micklethwait:

Economic wisdom from a rather surprising place:

Since 2007, 15 bridges have collapsed in China. Only three of them were more than 15 years old at the time of their collapse, according to a report by the Shandong Business Daily.

On Aug. 24, a 330-footlong approach ramp of Harbin’s Yangmingtan Bridge fell over, killing three and injuring five. The bridge had been in use less than a year and is the eighth bridge collapse in China this year. The Harbin administration has so far not openly addressed the case.

Zhao Wenjin, the lead commentator of Lanzhou Daily, commented on the incident, saying, “With each collapse, we need to reflect: why are we chasing GDP?”

According to a Jingyang Net report, Wang Yang, Party secretary of Guangdong Province, said at a provincial Party meeting in 2009: “Sometimes the GDP number looks good, but it didn’t really create wealth for society. It was, instead, a waste of society’s wealth.

“For example, building a bridge creates GDP. When the bridge collapses and is taken down, it creates another addition to the GDP. When the bridge is rebuilt, more GDP is created. As such, one bridge resulted in three additions to the GDP. But it was a tremendous waste of resources.”

Mainland media Chinese Business Daily said that sticks and pebbles were found in the concrete that made up the Yangmingtan Bridge, and the metal wires on the surface were also not tied together properly.