The authors who understand the subject really well are able to explain it in simple and easy to understand language. This is what I feel that this book is all about. The author explains the economy in one lesson: policies should take into consideration the long-term consequences as well as short-term, and they should consider the effects on all groups, not just few. Wow, so simple, but unfortunately this is not how our policy makers think.
I think that high school students should read this book before they enroll in economic courses that bore them to death with all the graphs and mathematical calculations. I really appreciate that this book is simple but to the point - even junior high school students would understand it. I highly recommend it.
- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market
If you wanted a crash course in Economic theory, you could do far worse than read Henry Hazlitt's `economics in one lesson'. The writing is an easy style that requires no previous training in economics, it is divided in to easily digested chapters covering a particular economic fallacy and correction, with each following chapter building upon its' predecessor. This is very much from the Austrian economics branch, with a certain theme of more liberty and less Government being a key concept, but unlike say Paul Krugman, Hazlitt does not come down heavy on the politics, preferring empiricism over political ideologies. Hazlitt is able to succinctly tell us why things are the way they are, rather than the tired `if the world were a fair place' brand of left thinking economists. A key ingredient in this book is in training the layman to think the way a good economist would think about things. For example while most people will applaud Governments that create jobs for people to get them off the dole queue, Hazlitt asks us to look beyond the obvious to the domino effect that Governments creating unnecessary jobs are doing. In this case if the Government creates a job that could or is being provided by the private sector, for each job created and paid for by taxpayers' money, someone in the private sector is no longer filling that job role. If they are no longer employed they are on the dole queue and not contributing to the false job recently created by central Government and over the long term this is entirely infeasible, costly and unproductive waste of tax payers cash. There are many more examples littered throughout the book that make you think differently to the norm, it makes you think like an economist, or at least a good economist. No mathematical equations or graphs make this book easy on the eye as you are not stumbling at each chapter's new interpretation of how maths can help in economics. Hazlitt instead uses hidden mathematics, in the form of logical arguments, designed to highlight the truth stripped bare of advanced maths and technical jargon. This was a large part of the books appeal for myself as even though I read many popular economics books in my spare time, the study of academic economics escapes me via my lack of a mathematical degree, though that doesn't stop many people, this makes the perfect book for the economic hobbyist, writer or commentator, as it covers the groundwork with great precision and gives enough to get by in any debate between friends over dinner. Even though this was originally written in 1946, over sixty years ago, the advice Hazlitt imparts seems timeless. If we could make every politician read and absorb this book, we would get more interesting debates and chances are a more positive outlook for Britain. Unfortunately because it is not biased by political agendas, chances are it would be ignored by all parties, which is a shame.
First published in 1946, Hazlitt's slim volume is an all-out attack on Keynesian macroeconomic theory in general and President Franklin D Roosevelt's 'New Deal' interventionist policies in particular. In essence his 'one lesson' has two strands:
* Politicians and economists should consider the long term effects of an act or proposal rather than just the immediate effects.
* Politicians and economists should consider the effects of an act or proposal on all sectors of society rather than just on the particular group(s) that the act or proposal is designed to assist.
Hazlitt's thesis is that state intervention in any particular sector of the economy - to protect its viability, to protect it from foreign competition, to reduce unemployment etc. - is almost always wrong-headed and damaging to the economy as a whole. He accepts that a certain amount of government spending (and therefore taxation) is necessary to perform essential government functions (the legislature and the judiciary; defence, police, fire, coast guard and other emergency services; and a certain amount of public works, including some communication infrastructure); but he is adamantly opposed to a bloated, free-spending public sector.
It is self-evident that the private sector is the one that creates wealth (which Hazlitt measures in terms of goods and services created and not in terms of money) and that the public sector merely consumes wealth; ergo, the larger the public sector and public spending, the poorer the country as a whole.
Hazlitt discusses a range of `economic fallacies' to attack a variety of economic policies that are applied from time to time, or persistently, almost universally. So, he argues, the wealth created by government spending will never compensate for the wealth destroyed by the taxes imposed to pay for that spending; government credit (grants, subsidies or low-cost loans) to aid specific industries diverts production and distorts markets; new technologies (often decried as causing mass unemployment) should be welcomed as creating extra profits - extra wealth - that will ultimately create new employment; spread-the-work schemes, tariffs and quotas, 'price stabilisation' and `price fixing' policies, rent controls, minimum wage laws, restrictive practices by trade unions, artificially low interest rates, over-generous welfare programmes; public housing schemes - all are systematically deconstructed to show the evils they cause in terms of wealth destruction and price inflation.
Hazlitt's book is clearly written in laymen's terms. It is objective and impartial, though complex economic problems are sometimes over-simplified. It is a highly readable, interesting book with, perhaps, a fatal flaw: it lacks any sort of compassion for the human miseries that are caused by economic recession or depression which, of course, FDR's New Deal programmes sought to alleviate. Many - most? - people nowadays demand a level of interventionist social spending by government. Hazlitt's work simply spells out the irrefutable consequences of such policies, simple truths that are simply ignored by politicians who just want to get re-elected.
This is a very readable book, written without jargon. Mr Hazlitt argues against some popular beliefs about the benefit of government interventions (e.g. public spending, price-fixing, credit guarantees, export-subsidies, import-tariffs) as means of job-creation or job-protection. He considers the unseen people who pay for the interventions. The unseen people pay directly e.g. via taxes or higher prices, and indirectly by not getting what the money would otherwise have been spent on, and by having fewer choices. The interventions appear to work because their targeted, immediate beneficiaries do benefit in the short term. But the community as a whole is worse off in the long term. The long term cannot be flippantly dismissed because we are all now living in what was once someone else's long term.
Mr Hazlitt accepts that economics is "hounded by fallacies" because of the "special pleading of selfish interests". Despite the abuse flung around by their spokespeople, these selfish interests cannot be isolated as pariah groups, because "each one of us has a multiple economic personality". We are both producer and consumer and tax payer. But even if your personalities have already settled on a view, then this book will help you. If you like big government it will give you a clear target to aim at. If you like small government, it will help you state your case.
The book was first published in 1946 at the start of an exponential rise in population and consumption. It does not address current issues like pollution, which, ironically, is something else that affects those who aren't immediate beneficiaries of a transaction. The 1946 edition is online at [...]
If you like this book, you may also like "Attacking faulty reasoning" and "The Richest Man in Babylon".
For most of my life I have paid little attention to theoretical economics and I suspect this is true for most people. However the current disastrous financial dilemmas awoke my interest. I quickly came across the Austrian school of economists and Hazlitt can be classed with them. The writing here is succinct and non technical and full of common sense, a quality missing from almost all economists and politicians.
The economic theory advanced here is illustrative of a persuasive broader philosophy which argues against the interference of the state in our daily lives. I suggest that if this book is to your taste you explore his other works which (in the absence of availability on Amazon) can be obtained at the Ludwig Von Mises Institute in America with the other Austrian school writers.
This book is a great introduction to economics. Hazlitt's writing is concise and devoid of academic jargon. Although much of this book was written sixty years ago - though he did add some new stuff in the late seventies - his lesson is still very relevant. Sadly, governments seem incapable of heeding this advice.
Opportunity cost is perhaps the central theme of this book, or the fact that there's no such thing as a free lunch. Every benefit governments choose to dole out on our behalf has a cost and needs to be paid for out of the proceeds of production. If more people took account of these hidden costs and long-term consequences we'd live in a better world.