In 1946 the price of gasoline was 15 cents a gallon, the average cost of a car was $1,120 and an average house was $5,600 and I wasn’t born. Also in 1946, Economics in One Lesson was published as an economics textbook. A few questions probably come to mind:
- Why read a textbook?
- Why read a book about economics?
- Why read a book written in 1946?
I bought the book because Henry Hazlitt is credited as the author of the Broken Window Fallacy and I was interested in the concepts behind the story. I did not realize that it was a textbook and didn’t expect much as I started to read. It only took a few pages to become immersed in the pages.
Beyond some dated terminology (i.e. hoodlums) and some of the prices used in a few examples, the book’s lessons are eerily appropriate to what is going on in our economy today. I would often interrupt my wife’s reading as I described what was in the book that applied today.
A glance at some of the chapter titles support my claims:
- Public Works Mean Taxes (Today – Stimulus Mean Taxes)
- Saving the X Industry (Today – X is Too Big to Fail)
- Government Price Fixing (Today – Subsidizing Ethanol Production)
- Minimum Wage Laws (Today – Minimum Wage Laws)
- The Function of Profits (Today – Profits Are Evil)
This excerpt from the book summarizes the basic premise of Hazlitt’s economics lesson:
“For many things that seem to be true when we concentrate on a single economic group are seen to be illusions when the interests of everyone, as a consumer no less than a producer, are considered. To see the problem as a whole, and not in fragments: that is the goal of economic science.”
I remember discussion minimum wage with an in-law over the summer. He was for raising the minimum wage. He used one of the basic arguments about giving a minimum wage in terms of a “living wage” with which one could raise a family. I, of course, tried to counter his claims, but he wasn’t having it. Rather than give up, as I should have, I used his argument against him. Did he really think that $8.00 was a living wage? Why not raise it to $10/hr, why not $20/hr, or $25/hr?
He did eventually agree that it would be difficult to legislate minimum wages at a level that could support a small family. I actually believe that I just wore him out and he just agreed with me to stop me. I’ll take it as a win. As in most economic discussions, most people don’t feel comfortable with their level of knowledge. Reading this book can give you the tools to effectively discuss the topic.
Economics In One Lesson is well-written, easy to read, and packed with great information. At a scant 183 pages, it is much smaller than most textbooks and much better reading. I found this very interesting and highly recommend the book. My copy has so many post-it notes that it will be the basis of many “Money Speaks” postings in the future.
The book is probably best summarized in the Introduction written by Walter Block in 2007:
“Every widespread economic fallacy embraced by pundits, politicians, editorialists, clergy, academics is given the back of the hand they so richly deserve by this author…No one who digests this book will ever be the same when it comes to public policy analysis.”
Buy it and read it.