Abrahamus's Reviews > Economics in One Lesson: The Shortest & Surest Way to Understand Basic Economics

Economics in One Lesson by Henry Hazlitt
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Sep 14, 2009

it was amazing
bookshelves: economics-finance
Recommended for: anyone
Read in September, 2009 , read count: 1

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 Far from seeming stale or out of date (the volume was first published in 1946 and last updated by the author in 1979), the material is immanently relevant given our current state of affairs, and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.
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