Henry Hazlit: Econ 101

One book that has significantly shaped my political philosophy would be Economics in One Lesson by Henry Hazlitt. This isn’t a traditional book that espouses a political philosophy, however. The underlying element throughout the book is as much economical as it is political.

Given this country’s recent economic plight, I wanted to be better informed about our situation and to gain some type of understanding of the intricacies of our economic system. After reading this book, I believe I can accurately sum up (in a layman’s interpretation) why our current economic policies have failed: there is a rampant underlying economic shortsightedness that only seeks to gratify the senses. Under this current and the preceding administration, this country has adhered to policies that focus on making the populous feel good, in lieu of allowing the principles of free enterprise to ease our burdens.

We have spent unimaginable billions on this “feel-good principle” because citizens can see the police patrolling our neighborhoods; see construction workers building bridges and streets; or see teachers in their children’s schools. This only soothes, but does not solve our problems. Effective economic policies ALWAYS take into consideration the short and long term effects those policies will have on the entire community, not just part of it. Those police officers, teachers and construction workers have their jobs because of government spending. Government spending, in any form, is a tax on the citizens that removes money that would arguably be spent on other goods and services. Those other industries are now poorer overall (this is what is unseen), and this leads to less profits, a reduction of employment and a stagnant economy. Obviously, this is an abridged summation, but the critical elements are sound.

Our economic problems can be solved, but only through adherence to the principles of the free-market. Government involvement, more often than not, means an ineffective policy of “robbing Peter to pay Paul.” What makes this book so unique is the fact that it was published almost 70 years ago—long before the housing bubble, the financial collapse, multiple stimulus packages and 8.3% unemployment—and Hazlitt’s findings are just as important today, if not more so. The essence of his book emphasizes freedom—individual freedom. The resilience and ingenuity of our economy (and also our country) is rooted in our freedom: our freedom to take risks or not; our freedom to rise or fall; and our freedom to buy or not buy a product. All are centered on the same principle that has helped us become prosperous and will return us to that prosperity. At the same time, we need certain negative freedoms from the federal government: the freedom from exorbitant taxes, freedom from excessive spending and freedom from unmanageable debt.

What is so influential about this book is the fact that individual freedom is not a lesson that solely extends to the economic realm. Freedom is an ideal that can be applicable across all platforms, economic or otherwise. Individual liberty is the bedrock of my political beliefs and has been for some time. This book has reinforced those beliefs and added a new level of nuanced understanding I otherwise would not have gained.