Economics In One Lesson – Henry Hazlitt

I have just reread Henry Hazlitt’s Economics In One Lesson, published in 1946. This very good, but short book, is about basic economics. This book should be mandatory in every public school. It takes about 2-3 hours to read and is illustrated with examples from real life. It’s my favourite book in economics and I cannot recommend this book enough. The book is perfect for students who dislike reading long and theretical books. The chapters are very readable. Hazlitt is straight to the point with easy examples. Most of the topics are what we read about in the newspapers every day: tariffs, minimum wage, rent controls, taxes, unions, profits & savings, credit, unemployment, banksystem etc. You need to read this book in order to understand the real consequences of actions your government wants to take.

The main point in the book is that all regulation/politics has a secondary consequence, namely what you do not see. For example, everyone can see the farmers losing their jobs and income without subsidies, but noone “sees” the new jobs created elsewhere in other industries because the same money (the subsidy) is instead spent and/or saved elsewhere. Paying subsidies has to mean that someone else is worse off – it is as simple as that. I summarize by this excerpt from he introduction:

“This book is an analysis of economic fallacies that are at last so prevalent that they have almost become a new orthodoxy…..There is not a major government in the world at this moment, however, whose economic policies are not influenced if they are not almost wholly determined by acceptance of some of these fallacies.”