A summer tutorial

A summer tutorial

The summer reading season is here. And there are plenty of classic economics books that should be on your list. Too heavy a lift for the livin’-is-easy season? Hardly.

While there are many books that fit the bill – anything by Frederic Bastiat and F.A. Hayek comes to mind – one, in particular, is a truly great read and quite accessible.

That is, while it offers timeless economic axioms of great import, it does so in a conversational and easy-to-understand manner. So easy, in fact, that even your favorite public policy maker should be able to understand it. Ahem.

That book is Henry Hazlitt’s “Economics in One Lesson” from 1946. Hazlitt was a storied Wall Street Journal scribe with writing chops so adroit that he succeeded the legendary H.L. Mencken as editor of The American Mercury.

As Steve Forbes reminded in the foreword to the 1996 edition:

“Reading ‘Economic is One Lesson’ is sheer joy because, as Mencken said, Hazlitt could really write. In the clearest and most lucid terms, the author spills forth his arguments against every major tenet of conventional economic thinking.

“Wasting nothing, his attacks show why these tenets are wrong in practice and in principle. On the feel-good goal of full employment, he notes that we can’t have full production without it, but we surely can have full employment without having full production.

“Our focus must always be on growth and production. Labor-saving machines don’t cause unemployment but actually create more and better jobs.”

And as Hazlitt himself put it:

“The best way to raise wages, therefore, is to raise marginal labor productivity. This can be done by many methods: by an increase in capital accumulation – i.e., by an increase in the machines with which the workers are aided; by new inventions and improvements; by more efficient management on the part of employers; by more industriousness and efficiency on the part of workers; by better education and training.

“The more the individual worker produces, the more he increases the wealth of the whole community. The more he produces, the more his services are worth to consumers and, hence, to employers. And the more he is worth to employers, the more he will be paid. Real wages come out of production, not out of government decrees.”

Oh, how sad that so few contemporary public policy makers simply don’t get that.

The concluding chapter of “Economics in One Lesson” offers this phenomenal truism:

“Now few people recognize the necessary implications of the economic statements they are constantly making. When they say that the way to economic salvation is to increase credit, it is just as if they said that the way to economic salvation is to increase debt: these are different names for the same thing seen from opposite sides.

“When they say that the way to prosperity is to increase farm prices, it is like saying that the way to prosperity is to make food dearer for the city worker.

“When they say that the way to national wealth is to pay out governmental subsidies, they are in effect saying that the way to national wealth is to increase taxes.

“When they make it a main objective to increase exports, most of them do not realize that they necessarily make it a main objective ultimately to increase imports.

“When they say, under nearly all conditions, that the way to recovery is to increase wage rates, they have found only another way of saying that the way to recovery is to increase costs of production.”

Pardon the less-than-scholarly summation but this is good stuff. And at a slim 195 pages, it’s a summer tutorial well worth the time of thinking people.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org)