All politicians need to read. | Economics in One Lesson: The Shortest and Surest Way to Understand Basic...

A Great Lesson | Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics | Henry Hazlitt

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	• Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics Henry Hazlitt Three Rivers Press, 1988 - 218 pages average customer review:based on 115 reviews view larger image
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highly recommended

Critical Review of Economics In One Lesson

"Economics is a science of tracing consequences", depicts Henry Hazlitt's idea on the economy. Hazlitt claims that today's economists forget the most frequent fallacy committed by professionals, the fallacy of short-term effects on specific groups rather than society as a whole. Hazlitt utilizes multiple examples of past economic policies that have failed, and what initially brought those policies to closure. After thoroughly reading Economics In One Lesson, my thoughts on the economy have transformed from little knowledge of the subject to a complete understanding of past economic failures.
The premises on production, inflation, and wages carry true statements, but seem outdated. Statistics and numbers used for basic economic explanations are recorded prior to 1980. For economic interest the premises remain true, but need updating for today's economist.
Hazlitt illustrates excellent reasoning to the fallacy of short-term effects on specified groups through many simple ideas. The first reason describes means of production and societies resistance to work for low wages. For companies to produce, workers are needed as producers. If company A's output increases, workers wages increase. If company A has an increase in production consequently company B suffers. Company B's output decreases, and the workers receive no wage increase. Society will only see the benefits of company A, not the monetary losses by Company B. Secondly, prices, profits, and costs to society. Hazlitt relates prices to the law of supply and demand. When consumers demand more of a product that is available from a certain business, people will buy more of the product. Both the price and profits will increase for the business. If the demand is met, the supply increases production meaning consumers increase their buying from that particular company. If consumers only buy from that particular company, other related businesses lose the profits for their product. Hazlitt's arguments remain deductively valid throughout the explanations of the prior fallacy.
Economics commits multiple fallacies if not carefully followed through with each policy and system. Hazlitt outlines many fallacies with the main point representing the fallacy of short term effects on one particular group rather than the long term effects on all groups, or the fallacy of over looking secondary consequences. Hazlitt briefly describes other fallacies, such as, the broken window fallacy and overlooking the general consequences fallacy. Although Hazlitt depicts several fallacies, I failed to see where he committed fallacies of his own.
Economics can be broken down into many parts and Hazlitt thoroughly describes each piece of those parts. Hazlitt's points are made exceptionally clear and to the point. Hazlitt's ideas are simple for the unclear mind but involve a considerable amount of thinking for today's economist. As stated before, economists often fail to realize secondary consequences to their actions.
The economic fallacy claims are fairly consistent throughout the book. The central fallacy of overlooking secondary consequences constitutes a major portion of the book. Hazlitt uses several illustrations to back up his claims of the failure to see secondary consequences and the impact they had on economic policies. Almost every economic policy commits a fallacy, and Hazlitt easily describes the fallacies and failures to the readers.
The arguments that Hazlitt conveys provide a complete understanding for economic fallacies and the impact they have on policies today. All evidence that Hazlitt uses on economic fallacies relates policy failures to overlooking secondary consequences. If today's economist only see the benefit of company A or product 1 rather than the suffering of company B or profit losses of product 2, economic policies will continue to fail. Hazlitt brings all aspects of the fallacy of overlooking secondary consequences into account for the purposes of this book. Hazlitt's arguments seem fair and support all views of economic progressions and failures in the mid 1900's. The presentation of both sides creates equal representation for all readers. The opposing views carry strong arguments, but do not change the weight of the writer's outlook. Hazlitt's opinion illustrates the truth of economics, and the impact of policy failures on society.
The key points of Hazlitt's book touch on several different economic stabilizers. Hazlitt begins with a strong introduction about the fallacy of overlooking general and secondary consequences. It is made clear that many professionals commit this fallacy over and over again. If economists and other professionals thoroughly verify the benefits and losses by the whole group rather than the benefits or impacts on one group, policies enacted will continue to work and increase profits, production, and costs in the economy today. Other fallacies are used to demonstrate the power of overlooking secondary consequences. The broken window fallacy, illustrates the benefits and losses within three parties. If a window is broken in Company A, but the owner wanted a product from Company B, the owner's situation becomes complicated. Now A has to buy a window from Company C instead of the needed product from B. Company A loses money to C, which should have supported B. Company C benefits, but Company B suffers. Hazlitt uses great ideas to support all of his arguments, and can be easily understood by all readers.

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All politicians need to read.

Despite having been written in the mid 20th century, this book is even more important today than when it was published. Every politician in the country should have to memorize the first chapter, as it explains the basic problems with almost every piece of legislation passed in the last 100 years.

A Great Lesson

This is simply the best introduction to the fundamentals of economics ever written. The book is divided into two parts. Part one, which takes all of four pages, is the basic lesson of the title. Part two, the remainder of the book, consists of applications of that lesson to all types of economic issues. It clearly shows the folly of many modern economic policies, including rent controls, minimum wage laws, government subsidies, and protective tariffs.

Hazlitt is a great writer, so much so that he somehow manages to make what is usually a dry, unexciting subject fun to read. (A little-known fact: the philosopher Bertrand Russell liked Hazlitt's style so much that he wanted him to be his biographer - until, that is, Russell decided to write his life story himself.) As a result, Hazlitt really succeeds in driving home his points. Economics has never been so interesting or so easy to understand.

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A students point of view.

Being an Economic and Philosophy student both, I found this book intriguing. I set out to kill two birds with one stone, however found myself rather surprised. While it applied to economics and taught and reiterated my class at school, it really drove home the ideas of philosophy. This book related to my philosphy and critical thinking class, because Henry Hazlitt makes a claim in the first chapter of the book and the following twenty five are the lesson being applied in economic terms. He makes sure you understand and can apply his claim/lesson to the real world, all while showing you the faults many economist make. All of his supporting stories are relevant and make since, they are all clearly written making sure his own view is shown, and they are complete, taking into consideration all points of view.
The book points out the fallacies of claims made by economists, and in doing so teaches you economics, and how to think correctly as one. He does not, however, take a typical approach to this economics thing. He throws you right in and teaches you the lesson right away. His lesson asks you to remember one thing.
"The art of economics consists in looking not merely at the immediate but at the longer effects of any act of policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."
This claim was something I was taught in my economics class, and I gladly related to it while reading. Some of my favorite chapters had to do with the broken window fallacy, minimum wage laws, and the mirage on inflation. All breaking down the faults of our government and the faults in our reasoning. Every chapter in the book brings home the main message of looking past the up front realities. To look outside of the box.
I felt Hazlitt took on a fair view of the people. He stated many times,"if we have trained ourselves to look beyond immediate to secondary consequences." I think this applies to many people. The word if leaves it open, covering all individuals. He also puts in his lesson, "not merely for one group but for all groups." He does look at it for all groups, mentioning all people who would feel the effects of whatever program is put into place.
I honestly liked reading the book. If you are an economics or philosophy major, both of which I am not, the book is worth more closer review. I would recommend it to anyone looking to find faults or learn economics.

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Understanding Economics and Debunking the Many Myths

Author Henry Hazlitt is definitely a member of the non- government interventionist society, when it comes to economics. He doesn't advocate the elimination of all levels of government in the economy, only those that are undeniably counter- productive and even destructive. He definitely would not get along very well with Keynesian economists.

I like the examples that Hazlitt uses in this book, because they make it very easy to understand exactly what he is talking about. This is very helpful to readers who may not have much understanding of economics.

Hazlitt avoids talking about statistics and he doesn't utilize graphic illustrations. I think some graphs would have been helpful, because it makes the points easy to visualize. But I think the reason that Hazlitt avoids graphs and statistics is because he wanted this book to be timeless. True, the book has undergone several revisions over the years, but the basic information and the debunking of economic myths that held true 50 years ago still hold true today.

Another thing that makes this book and easy one to read is the way Hazlitt divides the book into so many short chapters. The total length of this book is only 214 pages, yet it includes 26 chapters. That makes each chapter only about 8 pages in length, on average. Some are very short, like chapter 2 (the one on the broken window) which is only 2 pages in length. Keep in mind that Hazlitt didn't intend this book to be an argumentative analysis on the pros and cons of government intervention. He only meant to show the reader exactly what happens, when government sticks its ugly head into areas where it doesn't belong, and how these actions are detrimental to the overall economy over time. They might seem helpful in the short run, but they are destructive in the long run.

If there is one lesson that Hazlitt tries to drive home in this book, it's the tendency of people to be short- sighted when they evaluate the ramifications of government involvement in the economy; and the almost universal tendency to only see one side of the issue. For example, with tariffs, we are all fooled by politicians into supporting them because we think about the jobs that will be saved. We don't even think about the higher prices that will result from the tariff, which must be borne by the people who purchase the product. We don't think about the jobs that will be lost by other industries that would have received our extra money, had we not been forced to pay the higher price that the tariff resulted in. We see the trees, but not the forest.

Overall, this is a good book to read by anyone who would like to see these common economic myths proven wrong. Don't be misled by the book's title. This is not a basic economic theory book. It's a book about the negative effects of government intervention in the economy, and it does an effective job in exposing these myths.

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