Frédéric Bastiat, the great economic journalist, wrote in 1850 that although breaking a shopkeeper’s window seemed to generate economic activity, all it really did was enrich glaziers. Shattering shop-fronts does not raise aggregate demand. The British government has yet to learn this lesson. A mooted new scheme to pay consumers up to £2,000 if they have an old car broken up and replaced with a new one would be a wasteful, distortionary subsidy to automakers.

Bastiat’s lesson was simple. Breaking a shop window would mean the local glazier would earn six francs. But the shopkeeper would be forced to spend that six francs on the new glass and other tradesmen with whom he would otherwise have spent that six francs would lose out. The British car-crushing subsidy is equivalent to offering Bastiat’s shopkeeper a few francs and the use of a half-brick to smash in one of his own panes.