Very great and plain in explaining the basic economics principles
Economics, as stated in the last chapter of Economics in One Lesson, is a science of recognizing secondary consequences, of seeing general consequences, of tracing the effects of some proposed or existing policy not only on some special interest in the short run, but on the general interest in the long run. Put in a short way, it is a science of seeing problems as a whole not in fragments. The goal of economy is to increase production and living standard for all people rather than certain groups.

Under this principle and by analyzing final consequences of a specific policy on a nation wide perspective and in the long run , writers on both books object to policies such as "creating jobs as to achieve full employment", "minimum wages to protect certain industry workers", "trade barrier or high tariff to protect certain domestic industries", "government squandering spending as stimuli or saving certain dying industries”,” super low interest rate as to encourage spending".

All those policies were coming from certain economic groups' constant pressure on government about losing their interest or profits and made under such pressure to favor those group. Taking a direct government subsidy for industry A to save it from dying for example, this would be a transfer of wealth to industry A and taxpayers would lose as much as the people in B industry are gaining. Further more , as the industry is dying, it's already showed its incompetence either because of its inability of reducing product cost or of poor quality or of few features to offer. Such subsidy in the short term helps the industry breathing a little more time. On the other side of the coin, other more competent industries would lose the amount of wealth which it would have had to further expand their productions and reduce the cost if the government wouldn't intervene the market. Basically the government is preventing wealth to flow naturally to areas that have more production efficiency and more return in that no more wealth is created with this subsidy than the one would been created in the competent industry, saying B, if the same amount of investment went to B. In a nation's net income point of view, why should A be kept alive by artificial respiration? Perhaps for people that are going to lose their jobs? Again, in the same way, writes argue that this intervention in a practical sense prevents people looking for jobs that pay higher in other prosperous industries(transition period of a particular person might be painful as he has to learn new things, moves or is having a hard time to even get interviews). Further more, for industry B, as the production increase and cost reduction aren't there as they aren't getting the investment they would (assuming B needs the amount to expand production), their customers are paying the same product prices which otherwise would be reduced. In a practical sense again, end customers' purchasing power is not going to be increased as they should if the wealth naturally went to it.

Many logics involves in the books...I got lost a lot and had to reread pages again and again.

Economics In One Lesson gives good examples and analysis of policies favoring certain groups while ignoring other interest of other groups and in the long term not helping increasing nation's net income. It also repetitively educates that purchasing power ultimately depends on how many are produced in the form of dollars than just dollars themselves...Inflation can simply make people have more money.


What amazes me here is that Economics In One Lesson was written almost 60 years ago and it targeted at post war II economy. What it worried and foreshadowed 60 years ago are happening almost precisely today and US is doing almost everything the two books(in a broader sense, austrian economics) are opposing to to get out of the economy bust. What strikes me more into the heart is that as China is copying everything from US in its way toward industrialization and civilization and as such crisis is so painful on a 40-million population scale, what it would be like 10 or 20 years later on a scale of a 150 million people if it is doomed? I'm just saying...anyway I'm ending up nowhere. Maybe an island works.