on May 17, 2001
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.
on July 12, 2001
I should have studied economics. Hazlitt's book is remarkably readable, coherent, and logical. It just confirms that truth is usually understandable, whereas complicated obfuscation is usually the major alarm bell that tips you off when people are trying to shaft you. This guy really knows his stuff.
The one lesson is so simple that it takes about five minutes to read the chapter about it. The rest of the book lists various scenarios in which that lesson applies. The general principle of the lesson applies so naturally to various specific cases that it simplifies economics immensely. Hazlitt must have studied logic as well as economics.
The one lesson is simply this: economic planning should take into account the effects of economic policies on all groups, not just some groups, and what those effects will be in the long run, not just the short run. That's it. That's the lesson. Fallacious economic policies almost invariably seek to benefit one group at the expense of all others, or to bring about short-term benefits at the expense of long-term benefits. With this as his thesis, Hazlitt examines the numerous manifestations of such fallacies in different situations.
His chapters are short, his prose is easy to follow, and his logic is compelling. I've never taken an economics class in my life, yet I had no trouble following the reasoning in this book. This is a must read for anyone who wants to understand basic economics and the keys to widespread prosperity in the long run.
on September 2, 2009
I read this book as a college grad fairly ignorant of economic matters. It completely changed my world view. Perhaps that sounds hyperbolic, but the common-sense lessons about human thought and action in this small, easily digestible book have materialized in virtually every aspect of my life, from the obvious, such as my views on political policy, to the obscure, such as my relationships and my satisfaction with my own choices. Hazlitt is never heavy-handed; he comes over as extremely objective because he doesn't need to convince anyone of his views. He is confident that anyone who takes the time to read, consider, and understand true economics would be hard-pressed to reject the logical conclusions he offers.
The book essentially springs from the premise that economic fallacy results from considering the effects of a policy or action only on a specific group or over a short period of time. From this he goes on to explain how such fallacies have invaded every single sphere of public policy. While before I vaguely opposed the idea of public works projects, tariffs, and welfare, I had no reasoning to back up my thoughts so I rarely expressed them. Hazlitt's book, instead of arming me with political doublespeak, provided me with the solid theory to truly understand why things that seem hard to argue against--kickbacks for hardworking but suffering farmers, for example-- are really counter productive. I recommend this book for people who hail from any economic class or political party; it won't offend you, and will do nothing but make you more informed and better equipped to understand the world around you.
on November 26, 2001
The average American knows very little about economics or monetary theory. That's why they tend to believe whatever they see and hear on their televisions. By reading this short book, you'll gain a basic understanding of economics, and an explanation of the many myths that are taken as truths.
In the final chapter of this book, Hazlitt revists his work 30 years later (he was writing in 1978, and the book came out originally in 1946). He surmises that during that period, nothing was learned. If anything, he says, subjects related in the book (wage rates, price controls, government "make work") have become more political. I wonder what Hazlitt would say now.
You need to read this book in order to appreciate the real consequences of actions your government wants to take. The theme emphasized over and over in the book is that actions must be thought through to see what the long term effects will be, not just the highly visible short term ones.
on July 17, 2000
And make them read it. Less a primer in economics than a concise debunking of crank positions on economic issues, this book can clear the air (and the mind) quickly after some interested sophist plumps for a discredited idea. Hazlitt's parable of the broken window, meant to show how what dosen't happen as a result of human action is at least as important as what does, is the best introduction to economic theory for the average reader since Adam Smith. The visible results that people see as a result of government intervention in the market must be weighed against what did not come to pass because of the reallocation of resources (i.e., your hard-earned money) that such action necesitates. This book is timeless, in that it is not tied to concrete examples drawn from the headlines of 1946, and is also remarkably free of venom , passion, or spite, which too often mar polemical works on economics - and serve to camouflage bad reasoning. This book can be a basic education in itself, or the beginning of deeper study, in the works of Von Mises, Von Hayek, Schumpeter, or of Hazlett himself. Unlike his opposition (Keynes, et al), Hazlitt is actually readable. -Lloyd A. Conway
on April 13, 2008
Economics in One Lesson is a clear and concise explanation of opportunity cost and price incentives. This book is extremely useful as a supplemental text. The reason why is that most modern economics textbooks pass over opportunity cost too quickly. The basic idea of opportunity cost is easy, but students need to see how the opportunity cost concept applies universally.
One way to learn opportunity cost is to read Cost and Choice, by JM Buchanan. Cost and Choice is a great little book, but it does not work well for an intro class. Bastiat wrote some classic essays on opportunity cost, but his work could be seen as a little dated. Of course, opportunity cost is itself timeless, but Bastiat aimed at explaining the general applicability of opportunity cost reasoning to a nineteenth century audience.
Economics in One Lesson is a modern restatement of Bastiat's essays. Hazlitt writes to counter mid twentieth century Keynesian fallacies. This is an important aim. All to many of us believe that disasters like 9-11 and Katrina created jobs. Too many of us fail to see that the labor and capital that goes into reconstruction has forgone alternative uses. Too many of us believe that capital itself causes unemployment by replacing labor. Labor saved by capital has alternative uses. Even some economists can benefit from reading this book (if they have an open mind) because too few of us see how government spending and credit expansion can displace and distort private sector spending. This is not to say that the free markets never have any slack or are perfect, but the Old Keynesian belief that activist fiscal and monetary policy can permanently increase real GDP is not well founded. Any New Keynesian will tell you that Hazlitt was right about the Old Keynesian economic program.
Hazlitt also does fine explaining the basics of price incentives and price and wage controls. Many people will object to what Hazlitt writes about wage and price controls on ideological grounds, but his reasoning is sound. Even pro-minimum wage economists like David Card and Alan Kreuger admit that large increases minimum wage rates must cause increased unemployment. This is a basic lesson of economic theory.
The critics of this book generally do not know what they are talking about. Sure Hazlitt does not discuss externalities or asymmetric information, but EIOL is not a comprehensive text, it's a primer on opportunity cost and price/wage controls. Keynesian critics will find fault in its discussions of unemployment, but the fact of the matter is that virtually all economists now reject the Keynesian paradigm that Hazlitt attacked in 1946, including contemporary self described Keynesians. Hazlitt is second only to Bastiat in explaining the general applicability of opportunity cost reasoning in an entertaining fashion, and his book is more up to date. All first year economics students should read Economics in One Lesson.
on October 5, 2009
This book in no way should be read by any 'progressive' who wishes to remain one! If you read with any openmindedness at all, you will be moved inexorably toward an appreciation of the ability of the free market to improve the lives of people in any society that values and practices it. Your faith in government to solve economic problems will be shattered as you begin to see how non-market 'solutions', no matter how well intended, exacerabate these problems in the real world.
Written over 60 years ago, Hazlitt's work is remarkably prescient and applicable today. Along with very relatable examples, I found his reasoning to be clear, concise, and sound. It is very readable and understandable for non-economists. Seems the economic fallicies that people mistakenly believe today are essentially the same ones from 1946, or 1846, or 1746...or for that matter... from 46. Just slap a new coat of paint on 'em and your ready to fool a whole new generation of victims. In this respect, Hazlitt makes a great paint stripper.
on January 31, 2007
Before I give my own review, I'd like to respond to just two posts --
"incredibly misleading" -- This reviewer said Hazlitt contradicts himself by arguing that an inefficient and unneeded industry should go out of business to free resources for more productive and needed ones, but at the same time lamenting the collapse of an industry due to minimum wage laws. However, an industry that goes out of business because the market no longer demands it is not "unemployment." The reviewer's quote from the book about "releasing resources" explains itself -- employment will simply be shifted to more efficient and needed industries. On the other hand, minimum wage laws increase the cost of labor for employers, reducing the number of other workers they can hire, creating true unemployment.
"libertarian polemic" -- Aside from the fallacy of argument by political labeling, this reviewer makes a point worthy of consideration -- markets aren't always rational. This is true, and we see plenty of irrational behavior, particularly in the short run. However, it has been shown time and again that the market behaves largely rationally over the long run, which is the time period that counts. Producers which truly provide demanded value are rewarded. The tech sector is a good example -- all these computers, software and communications infrastructure streamlines operations in all industries, and the nerds are handsomely rewarded for it. If markets were primarily irrational, we would not have the propserity we have today. Irrationality is the exception, not the rule.
So my review. I'm an undergrad at an institution with a highly regarded economics program, and though my major isn't economics, I took some classes in that department to help fulfill my humanistic "artsy" requirement -- though at my school, economics instruction is heavily calculus-based. While many of the arguments in Hazlitt's book jibe with the results of the math I learned (most significantly that a price floor, like a minimum wage, creates a shortage), I only learned what everything meant conceptually, in plain English, by reading the book. Hazlitt also does a great job explaining the connection between the effect of artificial price and quantity controls on individual consumers/producers and the behavior of the economy as a whole -- something altogether lacking in the untenable but popular separation of macro from microeconomics. In fact, Hazlitt pointed out that consumers are really producers, that demand and supply are two sides of the same coin, something that my teachers never bothered to illuminate in class. You produce what you need in exchange for what you consume. You export what you produce so that you may import what you consume. In the end, as Hazlitt himself notes, it's all common sense.
Overall, this book is a really great supplement to an economics education, and I recommend it highly to fellow students.
on August 14, 2009
The authors who understand the subject really well are able to explain it in simple and easy to understand language. This is what I feel that this book is all about. The author explains the economy in one lesson: policies should take into consideration the long-term consequences as well as short-term, and they should consider the effects on all groups, not just few. Wow, so simple, but unfortunately this is not how our policy makers think.
I think that high school students should read this book before they enroll in economic courses that bore them to death with all the graphs and mathematical calculations. I really appreciate that this book is simple but to the point - even junior high school students would understand it. I highly recommend it.
- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market
on January 12, 2005
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.