Need is not demand. Effective economic demand requires not merely need but corresponding purchasing power. The inability to produce automobiles, radios, and refrigerators during the war did bring about a cumulative postwar demand for those particular products. But wherever business was increased in one direction, it was correspondingly reduced another.
The war changed the postwar direction of effort; it changed the balance of industries; it changed the structure of industry.
NO man burns down his own house on the theory that the need to rebuild it will stimulate his energies.
Many of the most frequent fallacies in economics reasoning come form the propensity to think in terms of an abstraction and to forget and ignore the individuals who make it up and give it meaning.
Supply creates demand because at bottom it is demand.
There is an optimum rate of replacement of equipment and machine, a best time for replacement. It is never an advantage to have one's plants destroyed by shells or bombs unless those plants have already become valueless or acquired a negative value by depreciation and obsolescence.
The destruction of anything of real value is always a net loss.
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