Economics In One Lesson

25 Nov

This Book is So Me

Daily Article by | Posted on 11/25/2008

Writing this introduction is a labor of love for me. You know how women sometimes say to each other “This dress is you!“? Well, this book is me! This was the first book on economics that just jumped out and grabbed me. I had read a few before, but they were boring. Very boring. Did I mention boring? In sharp contrast, Economics in One Lesson grabbed me by the neck and never ever let me go. I first read it in 1963. I don’t know how many times I have reread it since then. Maybe, a half-dozen times in its entirety, and scores of times, partially, since I always use it whenever I teach introductory economics courses.

I am still amazed at its freshness. Although the first edition appeared in 1946, apart from a mere few words in it (for example, it holds up to ridicule the economic theories of Eleanor Roosevelt, about which more below) its chapter headings appear as if they were ripped from today’s headlines. Unless I greatly miss my guess, this will still be true another 60 years from now, namely in 2068. Talk about a book for the ages. Other books on Austrian economics, too, are classics, and will be read as long as man is still interested in the subject. Mises’s Human Action and Rothbard’s Man, Economy, and State come to mind in this regard. But those are epic tomes, numbering in the hundreds of pages. This little book of Hazlitt’s is merely an introduction, written, specifically, for the beginner. I wonder of how many introductions to a subject it can be truly said that they are classics? I would wager very, very few, if any at all.

There is nothing that pleases a teacher more than when that expression of understanding lights up a student’s face. The cartoons depict this phenomenon in the form of a light bulb appearing right above the depiction of the character. Well, let me tell you: I have gotten more “ahas” out of introductory students who have read this book than from any other. I warrant that there have been more conversions to the free-market philosophy from this one economics book than, perhaps, from all others put together. It is just that stupendous.

The only thing I regret in this regard is that never again will I read this book for the first time. That, gentle reader, is a privilege I greatly envy you for having.

A word about style. The content, here, we can take for granted. But the number of economists who could really write can be counted upon one’s fingers. Hazlitt is certainly one of them. His verbiage fairly leaps off the page, grabbing you by the neck. In fact, I now venture a very minor “criticism”: the author of this book is so elegant a wordsmith that sometimes, rarely, I find myself so marveling at his presentation that I take my eye off the “ball” of the underlying economic message.

But enough of my personal slavering, drooling appreciation for Economics in One Lesson. Let us now get down to some specifics. The core of this book is, surely, the lesson: “the art of 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 groups.” Coupled with Hazlitt’s suspicion of the “special pleading of selfish interests,” and his magnificent rendition of Bastiat’s “broken-window” example, the plan of Economics in One Lesson is clear: drill these insights into the reader in the first few chapters, and then apply them, relentlessly, without fear or favor, to a whole host of specific examples. Every widespread economic fallacy embraced by pundits, politicians, editorialists, clergy, academics is given the back of the hand they so richly deserve by this author: that public works promote economic welfare, that unions and union-inspired minimum-wage laws actually raise wages, that free trade creates unemployment, that rent control helps house the poor, that saving hurts the economy, that profits exploit the poverty stricken; the list goes on and on. Exhilarating.

No one who digests this book will ever be the same when it comes to public-policy analysis. I cannot leave this introduction without mentioning two favorite passages of mine. In chapter 3, “The Blessings of Destruction,” Hazlitt applies the lesson of the broken-window fallacy (who can ever forget the hoodlum who throws a brick through the bakery window?) to mass devastation, such as the bombing of cities. How is this for a gem: “It was merely our old friend, the broken-window fallacy, in new clothing, and grown fat beyond recognition.” Did Germany and Japan really prosper after World War II because of the bombing inflicted upon them? They had new factories, built to replace those that were destroyed, while the victorious United States had only middle-aged and old factories. Well, if this were all it takes to achieve prosperity, says Hazlitt, we can always bomb our own industrial facilities.

And here is my all-time favorite. Says Hazlitt in chapter 7, “The Curse of Machinery,” “Mrs. Eleanor Roosevelt … wrote: ‘We have reached a point today where labor-saving devices are good only when they do not throw the worker out of his job’.” Our author gets right to the essence of this fallacy: “Why should freight be carried from Chicago to New York by railroad when we could employ enormously more men, for example, to carry it all on their backs?” No, in this direction lies rabid Ludditism, where all machinery is consigned to the dust bin of the economy, and mankind is relegated to a Stone Age existence.

What of Hazlitt the man? He was born in 1894 and had a top notch education, so long as his parents could afford it. He had to leave school. A voracious reader, he learned more and accomplished more than most professional academics. But he remained uncredentialed.

No university ever awarded him its PhD degree in economics. Hazlitt was all but frozen out of higher education. Apart from a few Austrolibertarian professors who assigned his books such as this one to their classes, he was ignored by the academic mainstream.

When it came to publishing and writing, Hazlitt was a veritable machine. His total bibliography contains more than 10,000 entries. That is not a misprint. (As you can see, those who relish Economics in One Lesson will have a lot of pleasant reading in front of them.) He was at it from the earliest age, initially making his way in New York by working for financial dailies. Hazlitt made his public reputation as literary editor for The Nation in 1930. He was interested in economics but not particularly political.

The New Deal changed all that. He objected to the regimentation imposed by the regime. The Nation debated the issue and decided to endorse FDR and all his works. Hazlitt had to go. His next job: H.L. Mencken’s successor at the American Mercury. Some of the best anti–New Deal writing of the period was by none other than our man. By 1940 he had vaulted to the position of editorial writer at The New York Times, where he wrote an article or two every day, most of them unsigned. Then he met Ludwig von Mises and his Austrian period began. Writing for the paper, he reviewed all the important Austrian books and gave them a prominence they wouldn’t have otherwise had.

It was at the end of his tenure there that he wrote this book — just before coming to blows with management over the wisdom of Bretton Woods, and leaving for Newsweek, where he wrote wonderful editorials, while contributing to every venue that would publish him. He died in 1993.

In summary, I feel like a party host introducing two guests to one another, who hopes they will like each other. I hope you will like this book. But more, I hope it will affect your life in somewhat the same way it has mine. It has inspired me to promote economic freedom. Indeed, to never shut up about it. It has convinced me that free-market economics is as beautiful, in its way, as is a prism, a diamond, a sunset, the smile of a baby. We’re talking the verbal equivalent of a Mozart or a Bach here. This book lit up my life, and I hope you get something—a lot—from it, too.



One response to “Economics In One Lesson

  1. Dave

    November 26, 2008 at 7:45 pm

    Fascinating stuff.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: