Economics in One Lesson

Rating:
Summary: Students Love Hazlitt!
Review: I teach Principles of Microeconomics, and I always use this book for extra credit. Students who hate reading long, boring, stuffy text books always like Hazlitt, and give him high reviews every single semester. The very readable chapters are short (about 3-6 pages in most cases), and told in story form to make Hazlitt's point. This makes it possible for even freshmen with notoriously short attention spans to read the day's chapter.

Hazlitt's "one lesson" is simple, and told in Chapter 1. The rest of the chapters are all stories in which the lesson plays a prominent role. In short, Hazlitt doesn't merely tell us the lesson, he actually shows us the lesson -- over and over and over, until we've got it.

With stories on tariffs, minimum wage, rent controls, taxes. unions, wages, profits, savings, credit, unemployment, and so much more, Hazlitt takes some of the most difficult economic concepts and makes these easily accessible to the lay person who has no economic training, background, or even inclination.

It's one thing for me to recommend this book. It's quite another for my students to recommend it semester after semester. I can imagine no higher praise.

Rating:
Summary: economics for non-economists.
Review: In fact, I think most economists need to read Hazlitt's classic too. And if they've already read it...they should read it again, because I think quite a few of them need to be reminded of some simple truths.

I am a graduate economics student and I have trudged through extremely technical economic literature in my time. Most leading economists these days become hyperspecialized and esoteric in some paltry technical issue to the point where their work is practically useless to the average person. This is a very terrible thing. Because knowledge of economics is so crucially important to our understanding of human behavior and the world, I think it *should* be accessible to more people. For this reason, I am always on the lookout for books that help people understand economics easily. That way, we can have a much better world.

I have found few books better for the beginner than _Economics in One Lesson_. Henry Hazlitt's book here is very highly regarded and for good reason: it's an excellent, simple look at economic issues that teaches an important lesson. That lesson? That good economics entails looking at the long-term effects of economic policies on *everyone*, rather than the short-term effects on one group. With this, we can see that when the government intervenes in the economy, there are always consequences that not immediately evident.

Although the book was originally published in 1946, the topics covered by Hazlitt are pertinent and explore issues that still confront us more than 50 years later. Topics include inflation, tariffs, taxation, price fixing, labor unions, savings, the importance of profits, rent control, and more. Hazlitt writes well and doesn't obfuscate the truths of matters with cumbersome graphs and math.

Please ignore James McDuffie's fatuous review. Most of the "implicit assumptions" Hazlitt makes are unassailable facts of reality established a priori. (Except for the assumption that government can be the *only* provider of some services, like roads, "health officers," police, etc.) Also, mathematics is all but useless in economics. The Keynesian paradigm no longer deserves any serious attention since it has been so thoroughly refuted a hundred thousand times over. Inflation as being beneficial to the economy is a fallacy that is easily destroyed by someone with a basic knowledge of money & credit theory. Alan Greenspan a free market proponent? That's ridiculous -- he definitely was 40 years ago but he has since become anathema to the economic prosperity. In fact he's probably the most destructive Federal Reserve Chairman in history.

Pick up this book and Gene Callahan's _Economics for Real People_ and you'll probably have a better economic education than you will find with any undergraduate degree in neoclassical economics. I'm serious.

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Summary: There you go again.....
Review: Mr. Byers "refutation" of my earlier critique is as flawed as Hazlitt's original argument. Hazlitt was discussing "society" in this case as a single nation-state. To use a hypothetical example, let's say Country A has a privately owned factory. Country B attacks Country A with an act of war, and the factory is destroyed.

The owner of the factory rebuilds a newer one, which turns out to be more profitable than the old one. (Further assume that had he borne the costs of tearing down the original factory himself, those costs would have eroded the increase in profits, and he would not have built the new plant.)

Since the costs of destroying the plant were borne in this case by Country B, then both the factory owner AND country A are more productive as a result of the destruction. Yet the factory owner would have not have undertaken the destruction on his own. Hazlitt's claim is that this could not be true.

Hopefully this is just "sloppy thinking, not legerdemain" on Mr. Byers part. I will give the benefit of the doubt that Mr. Byers may believe that Hazlitt was referring to the entire world economy in using the term "society," but this is untenable. The rest of Hazlitt's book analyzes economic decisions in terms of the effects on one country - and argues that economic decisions should be left to private parties, not the government. It is unrealistic to believe that in this one case he instead turns his attention to the entire global economy in making his argument.

And yet it doesn't matter - let's assume that in this one case Hazlitt WAS talking about the entirety of the global economy. We can still refute him by introducing a negative externality - let's say pollution. Assume the same basic scenario as before. Profits for owner = 1000, but now let's assume costs associated with pollution of 1200, all borne by property owners in and around the factory, not by the owner himself. Society loses 200 on net.

A new, cleaner factory could be built that would deliver profits of 800, and with no pollution. Destroying the plant would be profitable for society as a whole (net gain of 1000), but not for the owner (net loss of 200).

And lest anyone think this is ivory tower economics, the above scenario describes very well the actual operating conditions of many energy plants in the United States today. Sorry Mr. Byers, the critique holds.

Rating:
Summary: Misleading title
Review: The title of this book is very misleading. It is called "Economics In One Lesson" but a better title would have been "Randomly Selected Economic Myths and Economist Pet Peeves". Although this book is very interesting and makes many good points, it is not a good introduction to economics. It is basically an economist whining about government interference in the economy and common economic myths. This is fine stuff, but it is not "Economics In One Lesson" as the title implies. For an introduction to economics you would be better off getting a good college economics textbook or How the Economy Works by Edmund Mennis.

Rating:
Summary: Set your exepectations before you buy this
Review: The value of this book depends on what you expect out of it. I bought this book so I can get a good idea about basic economics in general not about government economic policies. But this book essentially goes about picking one government policy after another (like tax cuts, protection of industries, price fixations, minimum wage etc) and goes about telling us why such artificial measures are not right and why the economy should in general be left to free market forces.

As such, the book was a kind of disappointment for me - in not meeting my requirements. Though I should say that by itself, the contents of the book are quite good and generally enlightening.


Rating:
Summary: Lucid, clear, well-written, and irrefutable
Review: This book is extremely good. Its prose is extraordinarily lucid, its arguments are clear and irrefutable, and its organization and development are superb.

I have only two complaints. First: in the Introduction there are a few thinly veiled and unsupported pot shots taken at major economists with whom Hazlitt disagrees (Keynes). Second: The title of the book is misleading. This book is a polemic and not a survey of the field of economics.

I should also address the very silly criticisms made against this book by some of the other revewiers. Most of these critical reviewers entirely misunderstand the point of the book. The book is intended as a lucid refutation of certain extremely common anti-capitalist economic fallacies. That is all. Thus, criticisms like "this book fails to address: game theory, natural monopolies, the pricple-agent problem, labor market friction, some advanced math technique, etc" are simply irrelevant. It would be an absurd detour were Hazlitt to address those things when they aren't the topic of his book, and aren't relevant to the fallacies he's refuting. None of the fallacies he refutes use game theory, even if economics in general does. And "this book is simple and doesn't advance economics in any way" is another ridiculous criticism, because OBVIOUSLY any book entitled "[subject] in one lesson" or "intro to [subject]" is not intended to advance the state of the science.

In its intended purpose, which is to refute certain specific fallacies and in so doing explain a certain kind of thinking, this book succeeds incredibly well.


Rating:
Summary: A Political pamphlet all the way
Review: This book seems to be a political pamphlet, all the way. I like the narrative approach though. Too much anger at the government I guess. Analysis please. Reader will draw their own conclusions.

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Summary: Economics in a nutshell - never boring again!
Review: This is, in my opinion, the most important introduction to economics ever written. I began to read with some doubt that it could be of any interest. It not only captured my interest but set me on a path of new discovery making a subject I formerly considered so much witchcraft into a subject that permeates virtually every aspect of our lives. It is the founding theory that can make us a truly free people or enslaved to economic failures.

It is a book for every citizen before he votes or runs for even the office of dog-catcher. Read and follow it with Hayek's _Road to Serfdom_ for even greater understanding.