Is Windows a Broken Window?

Joe at Techdirt spots another example of every libertarian’s favorite fallacy:

Back in September, we noted that Microsoft had commissioned a study that tried to demonstrate how much of a boon the release of Vista would be to the European economy. The company bragged about the thousand of IT jobs that would be “created” due to people working on Vista installations. Of course, this was precisely the opposite of what the company should be touting. It would be far more impressive if they could anticipate how many existing positions in IT could be eliminated, freeing up workers to do jobs that produce more value than installing an operating system. Well, it sounds like the US is in for even more fun once Vista is released here. The company says it will create 100,000 jobs, and $70 billion worth of business. Put another way, companies will have to bring on 100,000 more people and spend another $70 billion to deal with the launch, if the figures are accurate. Why are they bragging about this again?

I think the basic insight here is correct, although it depends on what the workers are doing. If most of those 100,000 people are needed just to get Vista up and running, that’s clearly not something Microsoft should be bragging about. On the other hand, if most of those workers are engaged in (for example) creating new software products that rely on new features in Vista, then the number of workers employed might be a reasonable proxy for the amount of wealth created. In either event, Joe is clearly right that the number of workers required to administer a piece of software doesn’t tell us very much about how valuable it is.

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