Economics in One Lesson

by Henry Hazlitt

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429 ratings, 4.29 average rating, 109 reviews (more data...)

rating	frequency	%
5		51%
4		32%
3		10%
2		4%
1		1%

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published

January 28th 2000 by Blackstone Audiobooks (first published 1972)

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Audio CD

isbn

0786199172 (isbn13: 9780786199174)

description

In this presentation you'll hear excerpts from along with quotes from Hazlitt's other works and from the authors who influenced his thought. You'll…more

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Feb 02, 2009

Seth rated it:

(review of isbn 0517548232)

Read in February, 2009

The book uses simple examples of economics between individuals to understand the cost vs. benefit relationships surrounding economic decisions and policies. Examples and principles described are very easy to understand and are relevant to arguments made. Author is a Classic Economist and argues that economic growth is never optimal with government intervention. He shows how saving money is perhaps better to the growth of the economy than is consumption spending. He persuasively argues agains...more

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Feb 26, 2009

Marcus rated it:

(review of isbn 0517548232)

Read in February, 2009

For a book that was written so long ago, this book is amazingly relevant to today. It clearly explains how things like stimulus packages, government subsidies, nationalization, currency inflation etc., aren't, and can't be, magic solutions that fix the economy. It gives examples of times these types of things have been tried in the past and haven't worked and why they won't work today and will never work. If you are skeptical of the hundreds of billions of dollars being printed and shuffled arou...more

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Jun 22, 2009

Jarrod Jenkins rated it:

(review of isbn 0517548232)

bookshelves: nonfiction

Read in July, 2009

This review has been hidden because it contains spoilers. To view it, click here.

Abbreviated Review: stop reading my review and go read “Economics in One Lesson” right now.

Full Review: In the first half of 2009, I visited several law schools before making my selection and, while at Northwestern, I spoke at length with a professor who had recently worked on a paper supporting a national consumption tax. Encouraged by the fact that our positions on the desirability of a sales tax over an income tax aligned, I pushed him to explain his solution for getting out o...more

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Sep 11, 2008

Jeremy rated it:

(review of isbn 0517548232)

Read in October, 2008

recommended to Jeremy by: Kelsey
recommends it for: Economic novices

I can't even count the number of times already that topics discussed in this book have come up in everyday conversation. To me that is the major value of a book like this and an indication of its effectiveness. The "one lesson" is this: to truly understand economics (and make good economic policies) we must consider the short-term and long-term effects of a policy as well as how it affects all people immediately and in the future.

There has been a paradigm shift in my thin...more

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Oct 30, 2009

David Robins rated it:

(review of isbn 0930073207)

Read in October, 2009

If you only read one book on economics, read this one: read it and learn it. (But don't read just one book on economics.) It's astounding how so many fail to grasp the basic truths in this volume, or, more likely, ignore the evidence and rush ahead with their failed schemes of redistribution, inflation, etc. to provide short-term benefit to a favored few.

"Practically all government attempts to redistribute wealth and income tend to smother productive incentives and lead toward g...more

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Oct 12, 2009

Trevor rated it:

(review of isbn 0517548232)

The point of this book is to show that there are facts that economists have worked out over the years that are now all but laws that can be used to determine how we should structure our interactions so as to provide the best possible benefit to the greatest possible number. These laws ought to be followed to the letter as ANY mucking about with them can only lead to tears. Unfortunately, it has always been the case that politicians (and even some economists – particularly economists contamin...more

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Sep 14, 2009

Abe Goolsby rated it:

(review of isbn 0517548232)

bookshelves: economics-finance

Owns a copy — Read in September, 2009

recommends it for: anyone

Economics is one of those topics on which I've intended to get better educated for some time now. The events since the latter half of '08 have definitely bumped that intention up several notches in my list of priorities. The first problem I really had to tackle was figuring out where to start, which is to say, deciding exactly what and whom I should be reading. I knew just enough to determine that pretty much anything from a Keynesian perspective—which, with differences that are in the final a...more Economics is one of those topics on which I've intended to get better educated for some time now. The events since the latter half of '08 have definitely bumped that intention up several notches in my list of priorities. The first problem I really had to tackle was figuring out where to start, which is to say, deciding exactly what and whom I should be reading. I knew just enough to determine that pretty much anything from a Keynesian perspective—which, with differences that are in the final analysis inconsequential, has represented the mainstream positions of both the political right and left for the last several generations—was out. Also out was any nonsense coming out of the far left, i.e. socialism or fascism, unfortunately including a number of Christian writers who have adopted these positions and labored to make them somehow compatible with their Faith.

Eventually I found out about the Austrian School Economists, generally liked what I was hearing from that perspective (with important qualifications noted below) and decided to dive in by first tackling Henry Hazlitt's (1894-1993) well lauded primer Economics in One Lesson. Turns out that it was a great choice. Who would have ever thought that a book on economics could be a page turner on par with an Agatha Christie novel? Far from seeming stale or out of date (the volume was first published in 1946 and last updated by the author in 1979), the material is immanently relevant given our current state of affairs, and delightfully readable to boot. I started off underlining what I thought were key sentences from the Prologue and Chapter One, and then gave up when I realized that the whole thing needed underlining! (Just read the first two-and-a-half pages from Chapter One on Amazon and you will see what I'm talking about.)

Hazlitt's thesis statement, for which the book as a whole is simply a cyclical reiteration is as follows:

…the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. 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.(p17)

In each chapter of the book, Hazlitt re-illustrates this fundamental principle by applying it to matters such as government subsidies, government attempts at manipulating supply and demand via price fixing, controls on imports and exports (including tariffs), rent controls, minimum wage laws, inflation, and a number of other all too familiar phenomena.

To sum up, I really enjoyed and profited from this book, and plan to read further on this topic from other writers of the Austrian School. That said, I don't want to hold forth a generally glowing review without acknowledging that these guys do have their own blind spots and that those are not insignificant. As a Christian, I am bound to affirm that the fear of the Lord is the beginning of all knowledge and wisdom (Proverbs 1:7; 9:10; 15:33). That includes wisdom and knowledge in the area of economics. Through the mechanism of common grace, I believe that the Austrian Economists are generally right-on in their astute observations of how the economic aspect of the world works and are generally far less deluded than other competing schools of thought on the matter. However, their essentially secular viewpoint does leave them open to certain deceptions and shortcomings, the chief of these being the fundamental assumption that man is basically good and that his greatest problem is not sin but ignorance. In addition, I must also bear witness that true and enduring freedom and liberty—in all their various forms, including economic—are blessings that are only found in Jesus Christ. Any attempts to idolize individual freedom and liberty by abstracting them and attempting to construct a comprehensive worldview around them (e.g. Ayn Rand, a noted favorite of both the Austrian Economists and their Libertarian political chums) is just as much doomed to frustration, failure and wretchedness as any other false ideology.(less)

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Sep 13, 2009

Mark rated it:

(review of isbn 0517548232)

Read in September, 2009

In the course of my fairly well rounded education, I've managed to completely avoid any economics courses. Now that I've decided to fill that gap a bit, this book seemed like a good place to start.

Beyond the encouraging title, any book that was written more than fifty years ago, yet still enjoys good sales figures can't be too bad, and I wasn't disappointed.

Haslitt is very firmly in the camp of free-market economics and offers example after example of how attempts to interfe...more

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Jul 24, 2009

Howard rated it:

(review of isbn 0517548232)

ECONOMICS IN ONE LESSON
By Henry Hazlitt

Hazlitt is (or was, he's long dead) a unique figure in American economics: a popularizer of the Austrians ideas about political economy, monetary policy, and the Austrian critique of the socialist and Keynesian ideas that dominated policy making in the West for much of the 20th century. Hazlitt is half-forgotten today, although Thomas Sowell has, intentionally or not, picked up his mantle; but at one time he was a big deal - the NY Times, amo...more ECONOMICS IN ONE LESSON
By Henry Hazlitt

Hazlitt is (or was, he's long dead) a unique figure in American economics: a popularizer of the Austrians ideas about political economy, monetary policy, and the Austrian critique of the socialist and Keynesian ideas that dominated policy making in the West for much of the 20th century. Hazlitt is half-forgotten today, although Thomas Sowell has, intentionally or not, picked up his mantle; but at one time he was a big deal - the NY Times, among other elite media outlets, always gave him space to opine on the evils of inflation, deficit spending, and the false promises of progressive economics.

This is undoubtedly Hazlitt's most popular work, a quick but thorough critique of the New Deal, Keynsian thought, socialism, and government interference in the economy. He first published this book in 1946, but updated it in 1978 (that's the edition that's in print now). You don't have to fear whether anything in it is old-fashioned or out of date; the persistence of progressive economic ideas is such that many of Hazlitt's targets - rent control, deficit spending, inflation, job creation through unionism, economic growth through government "stimulous"- are depressingly au courant.

The book is divided into three parts. The first part is very short and contains the "lesson," to wit: economics is useful only when it studies both the short term and long-term effects of a particular policy. The second, much longer part of the book, applies the lesson to the many cherished war horses of progressive economic thought. For Hazlitt, the problem with Keynes, and the politicians who applied his theories, was that they were only concerned with the immediate, targeted effects of their policies. For example, if the government built a bridge to stimulate employment, the Keynsians would look at the busy bridge builders, and the completed bridge, and declare their policy a success. They did not see, or refused to see, the extra taxes paid, the resources diverted, or whether the objects of government spending were actually neccessary.

Having stated the Lesson, Hazlitt applies it across the spectrum of progressive economic initiatives: rent control, minimum wage laws, unions, deficit spending, inflationary monetary policy, and corporate welfare. All are critiqued in a manner that should be familiar to anyone who ever claimed to be a fiscal conservative. And yet, while reading this is certainly intellectually bracing, it gives one pause to realize how persistent these ideas are despite decades of criticism by the likes of Hazlitt, as well as the accumulated evidence of the damage such policies, when taken together in aggregate, can have across the economy. I mean, Paul Krugman was in diapers when this book was first published, but the ideology he expounds upon is apparently evergreen.

It's not hard to see why this might be. Big Government isn't just about control. It's also about delivering goodies to favored industries and voting blocs. Hazlitt has one chapter called "Saving the X Corporation" that could have just as easily been written about GM and Chrysler. He has another chapter on the absurdities of a farm policy based on pricing parity, so that prices for farm products are brought on par with prices farmers were able to command between 1909 - 1914 (hey! we've got a centenary coming up!). Most important, he debunks the Left's assault on saving, a cry that arose like the Eternal Return when Americans stopped spending in the face of the Great Recession. None of this really matters because the essence of progressive economics is to provide the intellectual rationale for heavy interference in the economy whenever a favored group arrives in DC carting barrels of money and/or grievances.

"Economics In One Lesson" is a rigteous attack on progressive economics, including a lengthy section on the Left's enthusiasm for inflation. While published decades ago, the information and arguments in here are fresh because the ideas that Hazlitt was combatting are still the default policy prescriptions of the Democratic Party. It's a quick easy read, but one that is thought provoking and educational. Yet it is also distressing to realize that the ideas critiqued here have changed so little that this book can retain its currency.(less)

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Oct 27, 2009

Billy Bush rated it:

(review of isbn 0517548232)

Read in September, 2009

A phenomenal synopsis in economic thought. This is a book that everyone ought to read as informed citizens, allowing us all to make wiser economic decisions versus voting for what "sounds" good. Hazlitt writes so all will understand and does a fantastic job at it. That doesn't mean it is the most exciting thing you've ever read, however. It can be a little dry but remains understandable and clear. Hazlitt's examples illuminate economic concepts better than most. He is not distrac...more

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Feb 07, 2009

Peter Namtvedt rated it:

(review of isbn 0517548232)

Read in July, 2008

recommends it for: any one interested in economics

It's sometimes a stretch, trying to understand a book in the terminology of 1946, but aside from a some references to events of that era, this book is eminently readable. Hazlitt covers many nuggets of the essence of economics, the broken window fallacy, the flaw in minimum wages, etc.

He remains relevant, as this quote shows:

"Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more b...more It's sometimes a stretch, trying to understand a book in the terminology of 1946, but aside from a some references to events of that era, this book is eminently readable. Hazlitt covers many nuggets of the essence of economics, the broken window fallacy, the flaw in minimum wages, etc.

He remains relevant, as this quote shows:

"Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to “buy” houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in they long run they do not increase overall national production but encourage malinvestment."

If this paragraph had been written yesterday, I would admire it as a remarkably precise explanation of recent events. But the truth is much more impressive: it is from a book first published in 1946, Henry Hazlitt’s Economics in One Lesson. It is still available in print but also online free of charge.

It is typical among today’s commentators to treat the theorists of laissez-faire capitalism–such as Hazlitt, Von Mises, and Ayn Rand–as somehow refuted by today’s disasters, which are billed as a “failure of the free market.” This would be laughable if the issues weren’t so serious. There has not been a remotely free market in housing and finance, especially over the last decade. And laissez-faire theorists, as Hazlitt illustrates above, have painstakingly explained exactly how government intervention in the economy leads to injustice and disaster.

Laissez-faire capitalism remains, as Ayn Rand once called it, “the unknown ideal.” “The flood of misinformation, misrepresentation, distortion, and out-right falsehood about capitalism,” she wrote, “is such that the young people of today have no idea (and virtually no way of discovering any idea) of its actual nature.” If we are to escape this financial crisis with as little damage as possible, we must learn capitalism’s actual nature by studying the great laissez-faire theorists. There is no better place to start than Rand’s essay “What is Capitalism?”

(less)

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Feb 19, 2009

Jongalt rated it:

(review of isbn 0517548232)

Read in January, 2007

recommends it for: Anyone that has even the slightest interest in economics.

The most basic principle in this book: In order to make economic decisions we must not only look at the immediate consequences but the short term and the long term. We must not only see the groups imediately benefitting from the effects of an economic policy, but also those group that are harmed or those groups overlooked and understand its repurcussions.

After reading this book and applying its lessons (even to ignorant posts in this forum) you definitely gain a greater understandin...more

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Dec 29, 2008

John rated it:

(review of isbn 0517548232)

bookshelves: economics

Read in January, 2009

This is quite frankly the best economics text I have set both my hands and eyes upon. Hazlitt not only clearly states all the important aspects of fundamental economics but applies them with ease to a modern audience.

It's all too easy to begin reading Adam Smith or Frederic Bastait and be taken back with the attitude of "this is out-dated, surely our modern world is different." But the truth of the matter is that the science that is economics has not changed, nor has it's...more

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Aug 31, 2008

Polka rated it:

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Greatest, easiest, most enthusing read. 100-ish pages of analogies and examples to the timeless fallacies of economics. The cutting wit adds to the enjoyment. Written in the forties so there is no semblance of a political agenda. Even the most recent edition only has additions from the seventies.

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Mar 05, 2009

Andrew rated it:

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Like all "_____ in One Lesson" kind of books this is way over simplified and reductive. His argument boils down to "if you try to impose policies that will supposedly better people's lives you just end up hurting another group"-(usually the rich or the privileged or the owners of production)-"so it's best to do nothing and let the free market work its mysterious mojo. We've all seen how well that works. It's pretty boilerplate, in terms of the justifications for the syst...more

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Jan 09, 2010

Michael Daub rated it:

(review of isbn 0517548232)

Owns a copy — Read in February, 2010

recommends it for: taxpayers, voters

This book should be required reading for all elected officials and government policy-makers. It is also highly recommended for all voters, taxpayers, and citizens. Basic economics is presented as simply and clearly as possible. The numbers/statistics are used sparingly. It should not be too difficult to comprehend for most idiot legislators.

The “one lesson” is explained in the five pages of the first chapter. Every act or policy has consequences: not only immediate effects, but a...more

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Mar 17, 2009

John rated it:

(review of isbn 0517548232)

bookshelves: read_2009

Read in April, 2009

I read this book online - http://jim.com/econ/

I learned several important economic lessons reading this book. The information was on a level that the “typical man on the street” could understand it. Even though this book was written right after the great depression and updated in the 1970s the information is pertinent to our current economic situation.

The most important principle I learned from this book is for every action in the economy there are short-term effec...more

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Feb 07, 2009

David rated it:

(review of isbn 0517548232)

Read in December, 2008

If you want to understand why our economy is in the tank, and what should or should not be done to "fix" it, this book provides an excellent understanding of macro-economics. Only with such an understanding can you examine the current situation correctly.

Macro economics can be a very dry subject. I won't say this book makes it exciting, but it is written in such a way that it doesn't really overwhelm you. The first chapter of the book states the lesson. The lesson (and...more If you want to understand why our economy is in the tank, and what should or should not be done to "fix" it, this book provides an excellent understanding of macro-economics. Only with such an understanding can you examine the current situation correctly.

Macro economics can be a very dry subject. I won't say this book makes it exciting, but it is written in such a way that it doesn't really overwhelm you. The first chapter of the book states the lesson. The lesson (and there really is only one) though explicitly stated at this point, did not register in my mind. But it didn't really register fully with me. Chapter 2 puts forth a fictional example that demonstrates the one lesson. Subsequent chapters takes one "issue" (minimum wage, government debt, trade deficits, farm subsidies, etc) and apply that lesson to the issue. It was around the fourth chapter or so that I had my "ah ha!" moment, and correctly understand the lesson. The rest of the book served to reinforce it.

This book was written in 1946, with an update in 1978. Let me leave you with one paragraph and ask yourself if this sounds like anything you've heard of recently:

The advocates of government-guaranteed mortgages also forget that what is being lent is ultimately real capital, which is limited in supply, and that they are helping identified B at the expense of some identified A. Government-guaranteed home mortgages, especially when a negligible down payment or even no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and defray the losses. They encourage people to "buy" houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in the long run they do not increase overall national production but encourage malinvestment.

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Sep 23, 2009

Kenzo rated it:

(review of isbn 0517548232)

Just to clarify, this is capitalist, market-based economics in one lesson, rather than the broader spectrum of economics. And rather than being a complete 'lesson', it is more a clarification of some basic misconceptions about the workings of a market economy. For example, the book makes clear the unintended and potentially negative consequences of protectionist policies. The book is clearly pro-free market, but would also be useful reading for critics of free markets. The book clarifies some ba...more

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Nov 24, 2009

Matthew rated it:

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If you want to read about Austrian economics and hear about how Keynesian economists are out there in the night, conspiring to tax you and build useless bridges for giggles, then read this book. If you know anything about economics and think about what you're reading, you'll see an agenda. Many generalizations and exaggerations are made to portray advocates of Keynesian economics as moronic and simple-minded.
Hazlitt doesn't say the government takes money from the rich and give to the poor;...more

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