Saturday Book Review: Economics in One Lesson by Henry Hazlitt
You may have heard of Henry Hazlitt, author of Economics in One Lesson. Notice that I did not precede his name with Dr. or Prof.: Strike 1.
So why should you care what he has to say? Because the kooks do and you need tools to refute their nonsense. He is praised by everyone from Ron Paul to F.A. Hayek: Strike 2.
The “One Lesson” is stated in Part One of the book:
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.
So how are we to test that theory exactly? Hazlitt’s book is completely lacking in graphs and equations to explain his theories, making it impossible to test these crazy ideas. Undoubtedly, this is intentional. If you don’t make predictions then I suppose you can’t be proven wrong: Strike 3.
This is just another example of somebody assuming that everything the government does to help us from ourselves is inherently bad with no quantification to back it up.
There are no unforeseen consequences in government actions such as farm subsidies, universal health care, bank bailouts, wars, or solar subsidies. All potential consequences are taken into account when legislators decide to pass the laws. They wouldn’t pass the legislation if there was a downside to it.
That is the one economics lesson that you need.