One of the first things you learn in econ class is that there’s no free lunch. If you want more of one thing you have to do with less of another. More guns, less butter. It’s based on the notion that the economy usually operates near its “production possibility frontier,” beyond which it cannot go.
Mike Konczal and J.W. Mason of the liberal Roosevelt Institute challenged that idea in a guest essay in the New York Times last week, using World War II as an example. We’re taught that Americans had to tighten their belts in World War II to spare resources for the war, “But in reality, at an aggregate level, there was no fall in household consumption during the war years,” they wrote.
