Economics In One Lesson: A Review of a Classic

If you’ve ever found yourself cornered at a dinner party by that one guy with a conspiratorial gleam in his eye and a penchant for explaining why the economy is “just a series of smoke and mirrors,” you’ll appreciate Henry Hazlitt’s Economics in One Lesson. It’s The Book that offers the economically curious a set of brass knuckles to face the muddled nonsense of popular economic “thought.” And by “thought,” I mean whatever passes for it in political speeches, social media debates, or the average op-ed.

But let’s not get ahead of ourselves. First, a quick primer: Hazlitt’s book is an economics classic, albeit one that uses plain language to dismantle the kind of Keynesian tomfoolery that has turned deficit spending into a national sport. Published in 1946, it’s a slim volume that packs a heavyweight punch. Think of it as the literary equivalent of Muhammad Ali in his prime — quick, elegant, and devastatingly effective.

A Double-Edged Sword

Hazlitt begins with the titular “One Lesson”: the art of economics consists of not just looking at the immediate effects of any policy but at the longer-term effects, as well. Further, it demands that the consequences of that policy be examined for all groups, not just one. A lesson so obvious it seems like common sense—until you realize it’s precisely what most policymakers and pundits ignore.

Why? Looking at all the consequences of an economic policy requires work, patience, and critical thinking. It’s far easier to promise free lunches than to explain why those lunches aren’t free. Hazlitt’s brilliance lies in his ability to show how economic fallacies perpetuate precisely because they focus on immediate, visible effects while conveniently ignoring long-term, invisible ones.

The result? Politicians handing out economic band-aids while ignoring the arterial bleeding beneath.

Smashing Windows (and Fallacies)

Hazlitt’s first stop is the famous “Broken Window Fallacy.” You’ve heard the argument before, even if you didn’t realize it: destruction stimulates economic activity. The idea is that rebuilding a shattered window, for example, creates jobs for glaziers, boosts spending, and pumps life into the economy. What could possibly be wrong with that?

Everything.

Hazlitt dismantles this nonsense by pointing out the unseen cost: the money spent on the new window could have been used for something else — perhaps a new pair of shoes. Instead of creating new value, we’ve merely replaced what was lost. It’s like celebrating a flat tire because it “supports” the tire repair industry. Hazlitt’s takeaway: destruction doesn’t create wealth; it squanders resources.

So, the next time someone extols the “economic benefits” of rebuilding after a hurricane or a riot, feel free to remind them that their logic is as sound as a screen door on a submarine.

Not Free, But Taxpayer-Funded

Ah, public works! The bread and circuses of modern governance. Hazlitt addresses the perennial myth that government spending on infrastructure — roads, bridges, statues of politicians with dubious legacies — is a magic wand for economic growth.

But wait, you ask, aren’t those things good? Sure, they can be. The problem, Hazlitt reminds us, is that taxes fund such projects. And taxes, lest we forget, take money out of the pockets of individuals and businesses. What could those people have done with that money? We’ll never know because the government has already spent it on a bridge to nowhere.

Hazlitt’s biting critique should be required reading for anyone who still believes in the economic tooth fairy.

Luddites of the World, Unite!

Ever since the dawn of the Industrial Revolution, there’s been a persistent fear that machines will destroy jobs. Hazlitt gleefully trashes this notion, pointing out that technological progress doesn’t eliminate jobs; it reallocates them. Machines increase productivity, lower costs, and free up human labor for other pursuits — like writing snarky economic reviews.

It’s a shame Barack Obama didn’t read this book. Otherwise, he wouldn’t have bemoaned how ATMs took the jobs of bank tellers. (They didn’t; see here.)

The real “curse” of machinery isn’t job destruction; it exposes the economic illiteracy of those who cry wolf every time a new technology emerges. Remember when computers were going to put us all out of work? Funny how that turned out.

The Donald Should Read About Tariffs

Hazlitt’s takedown of tariffs is a masterclass in economic wit. Hazlitt argues tariffs are a tax on consumers disguised as “protection” for domestic industries. Yes, they shield those businesses from foreign competition. But they shield them at the expense of everyone else. Higher prices, reduced choices, and economic inefficiency are the actual costs of protectionism.

So, the next time someone suggests that tariffs are a “win” for the economy, remind them that taxing your citizens to prop up uncompetitive industries is about as bright as burning your house down to keep warm.

Inflation: The Illusion of Prosperity

Hazlitt’s chapter on inflation is remarkably prescient in today’s economic climate. He explains inflation is a stealthy way for governments to rob their citizens, not a sign of prosperity. It’s a tax that a central bank unethically levies, not a legislature. Inflation erodes the value of savings, distorts investment, and wreaks havoc on the economy.

And yet, inflation is often sold to the public as a necessary evil or even a good thing. Hazlitt’s advice? Don’t buy it. Inflation benefits debtors (read: governments) at the expense of savers and wage earners. It’s the economic equivalent of a shell game, and you’re the sucker being fleeced.

Profit: Capitalism’s Dirty Word

Perhaps one of Hazlitt’s most important lessons is his defense of profits. In an era where “profit” is often treated as a four-letter word, Hazlitt reminds us that profits are essential for economic progress. They signal where resources should be allocated, incentivize innovation, and reward risk-taking.

Destroy profits, and you destroy the engine of growth. It’s a message that should resonate with anyone who’s ever complained about greedy corporations while simultaneously complaining about them by posting on X from their iPhones while wolfing down avocado toast and an egg nog latte.

Why You Should Read This Book (Again)

Hazlitt’s Economics in One Lesson is a survival guide for navigating the economic nonsense that permeates modern discourse.

So, the next time someone tells you that we need more government spending, higher tariffs, or artificially low interest rates, do yourself a favor: hand them a copy of Economics in One Lesson and watch as their arguments crumble faster than a house caught in a tornado’s path.

Wrap Up

Hazlitt’s Economics in One Lesson is a welcome relief in a world celebrating economic illiteracy. It reminds us that good economics is about understanding the unseen, the long-term, and the big picture.

So, grab a copy, pour yourself a stiff drink, and prepare to see the world — and its economic absurdities — in a new light. Just be warned: once you’ve read Hazlitt, you’ll never be able to watch the news without yelling at your TV.

Have a very Merry Christmas!