Hazlitt's Economics in One Lesson is a book that clarified economics for me, a person already acquainted with fundamental laws and insights. For someone not acquainted with Econ, this book is easily understandable and provides the foundation for thinking on the truth of what Hazlitt says to which is the essence of Economics: for someone to look "not merely at the immediate but at the longer effects of any act or policy; it consists in tracing that policy not merely for one but for all groups."
Before I discuss why I love this book, I should clarify what Econ really is. Contrary to what some believe, Economics is not merely a science of dealing with money, but rather according to the What Is Economics website, "Economics is the study of the production and consumption of goods and the transfer of wealth to produce and obtain those goods. Economics explains how people interact within markets to get what they want or accomplish certain goals. Since economics is a driving force of human interaction, studying it often reveals why people and governments behave in particular ways."
Ideas that are Especially Important
Particular issues and ideas that are Hazlitt discusses in his book that are basic ideas and insights into a true free society and government are the ideas of the folly of spread-the-work schemes, the truth that taxes discourage production, the damage of government price-fixing, the long-run effects of minimum wage laws, and the function of profits.
Discussing Government Price-Fixing
Hazlitt opened my eyes as to the dangers of price-fixing. According to the author, "The first thing to be noticed about this argument is that if it is valid the policy adopted is inconsistent and timorous. For if purchasing power rather than need determines the distribution of beef at a market price of $2.25 cents a pound, it would also determine it, though perhaps to a slightly smaller degree, at, say, a legal price "ceiling" price of $1.50 cents a pound. The purchasing-power-rather-than-need argument, in fact, holds as long as we charge anything for beef whatever. It would cease to apply only if beef were given away."
And also an argument in favor of price fixing, that the government should price-fix to keep the cost of living from rising is unfounded. Hazlitt explains that: "there is no point in assuming a price control that would fix prices exactly where a free market would place them in any case. That would be the same as having no price controls at all. We must assume that the purchasing power in the hands of the public is greater than the supply of goods available, and that prices are being held down by the government below the levels to which a free market would put them."
The problems that arise from government price fixing are shortages of the goods under the price laws. The price-fixing laws are self-defeating because these goods are the same goods that government wants to make plenty available to the public. Also, Hazlitt further explains that "they limit the wages and the profits of those who make these commodities, without also limiting the wages and profits of those who make luxuries or semi-luxuries, they discourage the production of the price-controlled necessities while they relatively stimulate the production of less essential goods."
Arguments and ideas such as this one that Hazlitt makes in his book Economics in One Lesson stands for the principles of a free market that makes this book eye-opening to individuals who seek the truth about why people should prefer liberty over government meddling.
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