Want to learn more about economics? First stop is this book!

Want to learn more about economics? First stop is this book!

Economics in one lesson

As a suggestion from my brother I started reading “Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics”. This book sparked my interest in economics and started me down the road I am today. To me, this is one of my favorite books, because of the significance it holds for changing my career path. The book was incredibly easy to understand and accessible to a recent high school grad.

Economics in one lesson opens with the author accepting and acknowledging the fact that economics has a lot of fallacies within it. Further, Hazlitt details the role of self-interested groups and how they can complicate economics and public policy a lot. It focuses on how policies interact with people. The “one lesson” Hazlitt gives us is this: “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.” His book then goes on to gives us concrete examples of how “the lesson” affects many economic beliefs.

The reason I loved Economics in one lesson is because it showed me how applicable economics is to the real world and how economic mismanagement due to unintended consequences can really hurt certain groups. The two main ideas, special interests and unintended secondary consequences, are really the core of the book. Some of the topics he covers are minimum wage, rent seeking, “saving” an industry, and so on.

A quick example of unintended consequences would be with public works. When government spends to create public projects, it must tax or borrow. This in turn hurts private investment and drives up interest rates (if financed by borrowing). When we see huge public works projects, like a brand new park in central phoenix, we see all the construction workers that built the new park. However, we don’t see all the things that would have been created if government had not borrowed or taxed. We don’t see the jobs being created by private investment and small business being created because they are being taxed too heavily or the interest rates on loans are too high.

Another very relevant issue he touches on which I feel is necessary to talk about is foreign trade. This is a case where people do not get the whole picture. We are often told that exports are good for our country and imports are bad. That’s because imported goods are products that American’s can’t compete with, and so American jobs are lost. Hazlitt has this to say on the issue: “It is exports that pay for the imports, and vice versa. The greater exports we have, the greater imports we must have, if we ever expect to get paid… For foreigners will have no funds with which to buy our goods.” For those people who want fewer imports but more exports they are in fact, calling for fewer exports. This is either because they don’t recognize it or they just don’t care.

In my opinion this is an extremely well written book for anyone with an interest in economics. Things in higher level economics get much more complicated than this book will give to the reader but it is a wonderful introduction. Anyone with a high school education can read this book and SHOULD read this book. Hazlitt cuts through the technical jargon in economics and public policy. He lets the reader understand the true effects of government policy. Take a look at the reviews on amazon and see if you’d be interested in it:

This author of this post is a participant in Amazon Affiliate Marketing. A small cut of the proceeds go to the author if the product mentioned is bought. However, this has no bearing on his opinion of the product. But, disclosure is necessary so the reader can make an informed decision.

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