Economics in One Lesson by Henry Hazlitt

Henry Hazlitt's classic, Economics in One Lesson, is an easy-to-read introduction to the concepts of economic liberty. So let's cut through the fluff and praise. Here's the lesson:"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."

Mr. Hazlitt's book attempts to apply this lesson to a concise set of topics, such as war, public works, advances in machinery, protectionism, rent control, minimum wage, and inflation. These were just a few of my favorite. My local library had the 50th anniversary edition which includes a chapter entitled The Lesson After Thirty Years.

One example I enjoyed greatly was his description of how bridge-building at the expense of a citizenry simply diverts resources toward something more seen. That is, a finished bridge is seen and everyone understands where their money has gone if it were coercively taken from them. However, what we fail to see is all the production that did not occur. It is harder to see what didn't happen as a result of that diversion.

"Here again the government spenders have the better of the argument with all those who cannot see beyond the immediate range of their eyes. They can see the bridge. But if they have taught themselves to look for indirect as well as direct consequences they can once more see in the eye of imagination the possibilities that have never been allowed to come into existence. They can see the unbuilt homes, the unmade cars and washing machines, the unmade dresses and coats, perhaps the ungrown and unsold foodstuffs. To see these uncreated things requires a kind of imagination that not many people have. We can think of these nonexistent objects once, perhaps, but we cannot keep them before our minds as we can the bridge that we pass every working day. What has happened is merely that one thing has been created instead of others."

"Economics in One Lesson" is a brief in-depth overview of basic economic concepts. The book starts with macroeconomics, with such concepts as inflation, unemployment, government spending, private spending, and savings and their relation to each other. The model used to express this relationship is a tub with two faucets, the tub representing unemployment and inflation, and the faucets ...