Economics in One Lesson was recommended reading in my Econ 101 class in college and because it was short, I actually did skim it. I’m not sure how much I learned from that cursory glance with 20-year-old eyes, but when I reread it a few years ago, I kept feeling as though the book could have been written yesterday. You could insert today’s headlines into Hazlitt’s pages. I think everyone should read it. Fortunately, thanks to the Foundation of Economic Education, you don’t even need to spend money to read it.
I’ve given you a sampling of what Hazlitt wrote, but you can read the entire book in an afternoon or a couple of nights. It’s only 200 pages. The clear writing provides simple examples that refute many of the myths perpetrated by politicians and self-interest groups. Hazlitt’s clear insights are relentlessly applied until he erodes the myths promoted by pundits, politicians and economists alike.
One chapter is devoted to public works. Keep in mind that the following was written more than 60 years ago:
There is no more persistent and influential faith in the world today than the faith in government spending. Everywhere government spending is presented as a panacea for all our economic ills. Is private industry partially stagnant? We can fix it all by government spending. Is there unemployment? That is obviously due to ‘insufficient private purchase power.’ The remedy is obvious. All that is necessary is for the government to spend enough to make up the ‘deficiency.’
Vast amounts of economic literature is based on this fallacy. As so often happens with doctrines of this sort, it has become part of an intricate network of fallacies that mutually support each other.
Hazlitt goes on to clearly show the fallacies underpinning the thinking. We tend to look at things in isolation instead of as a whole, and, as Hazlitt concludes his book, seeing them in the whole is the goal of economic science.
I can’t recommend this book highly enough. No one who reads it will ever think about economic policy analysis in the same way again.