Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics by Henry Hazlitt (PDF)

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With over a million copies sold, Economics in One Lesson is an essential guide to the basics of economic theory. A fundamental influence on modern libertarianism, Hazlitt defends capitalism and the free market from economic myths that persist to this day. Considered among the leading economic thinkers of the “Austrian School,” which includes Carl Menger, Ludwig von Mises, Friedrich (F.A.) Hayek, and others, Henry Hazlitt (1894-1993), was a libertarian philosopher, an economist, and a journalist. He was the founding vice-president of the Foundation for Economic Education and an early editor of The Freeman magazine, an influential libertarian publication. Hazlitt wrote Economics in One Lesson, his seminal work, in 1946. Concise and instructive, it is also deceptively prescient and far-reaching in its efforts to dissemble economic fallacies that are so prevalent they have almost become a new orthodoxy. Economic commentators across the political spectrum have credited Hazlitt with foreseeing the collapse of the global economy which occurred more than 50 years after the initial publication of Economics in One Lesson. Hazlitt’s focus on non-governmental solutions, strong — and strongly reasoned — anti-deficit position, and general emphasis on free markets, economic liberty of individuals, and the dangers of government intervention make Economics in One Lesson every bit as relevant and valuable today as it has been since publication.

User’s Reviews

Reviews from Amazon users which were colected at the time this book was published on the website:

⭐With the postulated simple criteria: “economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all the groups”, that in first instance might even be of appeal to socialists, but when applied with simply common sense to each specific case the politicians have put forward in the last hundred years, we see that reveal clearly the fallacies of those policies. The interventions of the state to rise (or lower) wages, prices, save industries, boost exports, lead only to the oposite intentions, to the cost of raising taxes, inflation, and eventually assaulting savings to finance politicians deficits, have to be payed sooner or later, at a much higher costs. A lesson that we seem not to learn, and fall over again in a recursive trap. The Austrian school with minimal state intervention proposed the solutions to those problems, for nearly a century now, but failed to make an appealing case to politicians, so far.

⭐This little book is essential to understanding economics. I read this book several times, in Spanish and English as well, finding something new all the time. In the tradition of F. Bastiat, Mr. Hazlitt does a suberb job of describing and debunking so many economic myths that, even today, continue to be propagated as self-evident truths. His approach to the subject: paying attention to what is seen and not seen, the individual scenarios to explaining the economic activity, and the fundamental explanation of elementary principles by deduction are mechanisms that make the reading of something as distant and as close to the common human being as the economy more pleasant. Recommended.

⭐This book, first published in 1946, explains common fallacies (a false or mistaken idea) that are particularly common in the field of economics and public policy. At the very start of the book Mr. Hazlitt explains:Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine — the special pleading of selfish interests. While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for then plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.In addition to these endless pleadings of self-interest, there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences.At first it seems as though not much has changed since the end of World War II. What has changed, though, is the scope of the dangers Mr. Hazlitt identifies. That’s because government is much expanded and more assertive today than when this book was written. In 1946 the New Deal was not very old, and the tremendous expansion of government social programs was still in the future. We should take these lessons as even more important today.It is the overlooked consequences that cause harm. They are overlooked sometimes because they are difficult to see, as in the broken window fallacy explained by Frederic Bastiat and also in this book. They are also “overlooked” because, as Mr. Hazlitt tells us, one group wants special favors from the government, and although there is no way to grant these favors without harming some other group, the favor-seeking group will seek to hide, obfuscate, muddle, or minimize the bad effects. At the same time they promote the policy as good for everyone. This is largely the job that lobbyists perform, and billions are spent on it each year. That’s because a powerful government has the ability to bestow valuable favors, those favors being paid for by someone else, someone often not easily seen.An example of overlooked secondary consequences is government spending. When government spends, it means it must tax or borrow. What government spends is not available for individuals to spend. When we see magnificent public works (say a new downtown arena in Wichita), we don’t see all the things that would have been bought had the government not taxed to build the public work. We see the jobs created by the public work — all the construction workers that will be building the new arena — but we don’t see the jobs destroyed because people had to reduce their spending elsewhere.Foreign trade is a case where people often fail to grasp the complete picture. We often see exports as something good for our economy, while imports are seen as bad. Imported things are things that American workers can’t compete with, and so American jobs are lost, it is often said. But as Mr. Hazlitt says: “It is exports that pay for imports. The greater exports we have, the greater imports we must have, if we ever expect to get paid. The smaller imports we have, the smaller exports we can have. Without imports we can have no exports, for foreigners will have to funds with which to buy our goods.” So those wanting restrictions on imports are also — although they do not say this, either because they do not recognize it or it doesn’t matter to them — calling for fewer exports.In recent years we have been told that our is a “consumer-driven” economy, fueled by people tapping their home equity that accumulated from increased home values, or spending by going into debt. It is as though if consumers started saving rather then spending on immediate consumption, the American economy would collapse. But Mr. Hazlitt tells us that “saving is only another form of spending.” After all, what is done with money that is saved? Today, few put their savings under the mattress. Instead, it is loaned to a bank or invested. Then it is spent on capital goods, which businesses use to increase their productive capability. The key fact is that businesses spend it. And, they spend it on capital goods that either expand their capacity to produce, or decease their present costs of production. Either way, that is good for everyone. It means more jobs, and better jobs. But this saving is derided as not being “productive.”As a conclusion Mr. Hazlitt tells us:And this is our lesson in its most generalized form. For many things that seem to be true when we concentrate on a single economic group are seen to be illusions when the interests of everyone, as consumer no less than producer, are considered.To see the problem as a whole, and not in fragments: that is the goal of economic science.This is a very valuable book, which while dated a bit, cuts through the fog and haze of economics and public policy and lets us understand the effects of our government’s policies.

⭐“Economic history,” Austrian economist Ludwig von Mises wrote “is a long record of government policies that failed because they were designed with a bold disregard for the laws of economics.” In a persuasive and readable book I just finished, Economics in One Lesson (originally published in 1946 and updated through the 1970s), business writer Henry Hazlitt—an admirer of von Mises—analyzes the many myths and delusions that lead us, and our political leaders, to constantly seek the proverbial but impossible free lunch.Hazlitt argues that bad economic policies result from a common mistake: looking only at the immediate initial effect of a law or policy—its isolated benefit to one politically targeted group—while failing to consider its effect on other groups or society in general. He credits 19th century French economist Frederic Bastiat for this insight. In an 1850 essay entitled “What Is Seen and What Is Not Seen” Bastiat wrote: “In the sphere of economics an action . . . or a law engenders not just one effect but a series of effects. Of these effects only the first is . . . seen; The others . . . are not seen; we are lucky if we foresee them. [A bad] Economist . . . relies on the visible effect, while the good one takes account both of the effect one can see and of those one must foresee. [F]or it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous and vice versa. From which it follows that a bad Economist will pursue a small current benefit that is followed by a large disadvantage in the future, while a true Economist will pursue a large benefit in the future at the risk of suffering a small disadvantage immediately.”Doesn’t this describe many shortsighted policies and laws that have been adopted over many years, by both political parties in the U.S., in efforts to help one group or segment of society and then another, without considering the effects on society at large? Trade protectionism and tariffs that benefit a few politically influential industries or groups but drive up prices for all consumers. Farm subsidies that drive up food costs and keep inefficient farmers in business, preventing more productive farmers from acquiring land. Minimum wage laws that increase unemployment by forcing employers to terminate (or not hire) workers whose costs would exceed revenues that would be earned by hiring them. Rent controls that help current renters but create blighted slums when owners can’t afford to repair buildings, and housing shortages when unprofitable investment in new housing plunges. Democratic governments constantly adopt laws and policies intended to help one particular group without considering the long-term consequences or effects on other groups or society at large. These laws and policies are not only often self-defeating, failing to accomplish their intended purpose, but injure living standards by suppressing economic efficiency and productivity.Hazlitt notes that such improvidence is not new; in fact, it is built into the so-called “division of labor” noted by Adam Smith. As soon as humans begin to specialize and exchange the products of their labor, each person has a vested interest in obtaining maximum value for the goods or services he produces, while minimizing the value others get for their products and services (for which he must pay out of the value of his own work). Thus, the temptation always exists for groups, through political influence, to strive to obtain special benefits or concessions from government, regardless of the cost to others. “What is not seen,” Hazlitt says, are the indirect and cumulative effects of such political favors; as more and more interest groups obtain benefits from government, and the effects connect into a vicious circle, all consumers (including workers in favored industries) are harmed by higher prices, inflation that devalues salaries and savings, and suppressed living standards.

⭐I read this very quickly and enjoyed almost all of it, the only exception was some areas that were a bit repetitive as similar examples were given of the same point. The key lesson though being that economic policies are often designed for the group most immediately affected, but ignore the long-term, secondary and tertiary effects on everyone else. Some great examples of this are then given. It’s also all written in an engaging and enthusiastic style, making it easy to read even for the non-expert.One point just to make though is that despite the title this is not an introduction to economics for a beginner. Instead this is a summary of his frustrations with common economic proposals, so it’s easier to read if you already have some economics under your belt.Finally I’d mention that the author has some clear ideological views that he tries to push. A lot of this is because he repeatedly refutes arguments because they result in an inefficient economy, taking the view that a perfect world is one where every task is done by the person/country/company that can do that task most efficiently in terms of least capital, resources and personnel. This ignores two key points. Firstly, systems often have to sacrifice efficiency for robustness, and sometimes having inefficient local production subsidised in some way is useful as it is insurance against supply disruption. The other point is that at no point does he mention inequality as a factor. I’d think that there are many trade-offs where aggregate human happiness is greater with a smaller pie, more evenly shared, than a larger pie unequally divided.Overall though a good book, and a nice quick read. Whether you think government involvement in the economy should be increased or reduced this is a good book to read, making the argument for limited government involvement in the economy clearly and concisely, against which the reader can form their own view.

⭐The title is disconnected with reality, you won’t learn much economics from this which was pretty dissapointing. The point of the book is kind of the Thatcher / Cameron / May argument about not spending more than you earn or magic money trees. Of course this is pretty much monetarism 101 which is fine if that floats your boat but not the only game in town. You don’t have to be spendy mcspendface to realise there is a time and place for Keynesianism or government intervention in the economy (lord knows there has been enough of it in the last 15 years). Its fine to be more one side of this particular fence than the other but good to acknowledge the other side exists. Disingenuous analogies between households and the overall economy help no one.

⭐From a simple scenario of a broken window, Hazlitt develops a series of arguments which demonstrate some of the fallacies which we now seem to accept as gospel. Lucid, well written and full of lessons our current crop of politicians (of all parties) should learn, this book taught me more about economics and the laws of cause and effect than most economics texts I have read.If you believe that government is the answer to every problem then this isn’t the book for you – you will disagree with something on almost every page. If you think our government is the problem then buy this now and you will be reassured to discover just how right you are.

⭐Home spun economic philosophy for libertarians. Thing is I’m sympathetic to his philosophy but that doesn’t mean I’m an amoeba. If Mr. Hazlitt or his acolytes believe economic life is that simple then we’d be living in a libertarian state by now. Much like it’s nemesis communism its all very well in theory so long as reality doesn’t get in the way. Or god forbid those messy humans. Don’t bother reading this unless it’s an option instead of a root canal.

⭐I would recommend this book for everyone who is really interested in economy.I choose this rating because it explains the idea of `free market` which is in this case an economy in which government and bureaucrats creating it make as little amount of regulations as possible. In the beginning of the book author says that it is his intention to convey his message to as wide number of people as possible. That is why he decided to use every-day language in its simplest form. I think that he menage to do it. Thanks to the simplicity of the language I could understand his lesson.In this book he gives numerous examples in which he shows government attempt to regulate an economy in the name of …, to make it better and to improve the wellbeing of some groups of interest. He shows how those acts and policies often have unintended consequences which in many cases have derogatory effects on economy as a whole. He reminds as that as with many things there are two sides of the story, one negative and one positive.If you read it then you will be able to notice deceptions and illusions which are created intentionally or not by bureaucrats and politicians and other economist.It is a small refreshing book. In the end of the book you will be rewarded with a nice list of books to read.Everyone can read it, and that is what makes this book amazing. It was pleasure to read it because.If there is a common sense then this book is full of it. You will be surprised how insightful his observations are, just enough to convey the idea without loosing someone in detail.Someone in reviews wrote that this book is not about economics. That person is wrong. It`s all about economics. It is about the world in which we live and our cooperation with each other in it. It shows how that cooperation can improve our lives or not, and what has positive or negative impact on it.

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