Wisdom: Henry Hazlitt on Economic Organization

Henry Hazlitt (1894-1993) was an exceptional journalist and economist. He was an economist who could write clearly (John Kenneth Galbraith was a wonderful writer, but a limited economist). Hazlitt’s book, Economics in One Lesson, may be the most-read book on economics because of its simplicity and clarity. He used Frederic Bastiat’s simple approach to economics. His comment on Economic Organization is as follows with underlining added:

There are basically only two ways in which economic life can be organized. The first is by the voluntary choice of families and individuals and by voluntary cooperation. This arrangement has come to be known as the free market. The other is by the orders of a dictator. This is a command economy. In its more extreme form, when an organized state expropriates the means of production, it is called socialism or communism. Economic life must be primarily organized by one system or the other.

It can, of course, be a mixture, as it unfortunately is in most nations today. But the mixture tends to be unstable. If it is a mixture of a free and a coerced economy the coerced section tends constantly to increase. Henry Hazlitt, 1985

Commentary on the Econ1Lesson book:

“Economics in One Lesson” by Henry Hazlitt is a remarkable book. Unlike any other book about economics this one will not bore you to tears. Written in 1946 this book is as relevent today as it was sixty years ago. Walter Block’s introduction prepares you for the lucid discussions that follow. Chapter one is the lesson and all of the remaining chapters are applications of the lesson. Chapter titles include, “Public Works Mean Taxes”, “Taxes Discourage Production”, “Credit Diverts Production”, “Minimum Wage Laws” and “The Mirage of Inflation” to just name a few.

This short little book is well written and easy to understand. As you read it you’ll think to yourself, “this makes perfect sense” or “that’s what I think too.” If you’ve read John Maynard Keynes and found his premise that it’s government spending that drives an economy to be a bit loony, then you’ll definitely find this book to be a refreshing and enlightening alternative view.

Most of Hazlitt’s material is available in the public domain. The Wisdom of Henry Hazlitt contains a number of short articles and can be found at the following link: http://mises.org/books/wisdom.pdf as can many of his other works.

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