Henry Hazlitt’s “Economics in One Lesson”

June 29, 2012 by PeaceRequiresAnarchy 5 Comments

I recently finished reading Henry Hazlitt’s popular 1946 book Economics in One Lesson.

The book is based on Frederic Bastiat’s famous 1850 essay What Is Seen And What Is Unseen, also translated as That Which Is Seen And That Which Is Not Seen. Bastiat’s essay (which I read a few months ago and commented on in a blog post) and Hazlitt’s book both examine the effects of various government interventions in the economy. Specifically, both authors show that for every intended, positive, seen effect that a government policy has, there is almost always an unintended, detrimental, unseen effect that inevitably comes along with it. Further, both authors come to the conclusion that when one takes all off these effects into account, one can see that the government economic policies considered almost always harm the economy as a whole.

To be brief with this blog post I’ll just say that Bastiat’s essay is shorter and, in my opinion, more educational and enjoyable than Hazlitt’s book. (I am sure that there are people who would disagree, but it is not my objective here to prove them wrong. I am just stating my view for anyone who might be interested.) Thus, if you are only going to read one of the two works I recommend that you do not read Hazlitt’s “Economics in One Lesson” and do read Bastiat’s classic essay “That Which Is Seen and That Which Is Not Seen” instead.

While you are at it I also recommend Frederic Bastiat’s 1850 essay The Law, which I also thought was a very good read.

Now I will comment on Hazlitt’s political views that he expressed in “Economics in One Lesson” by comparing them to the political views Bastiat expressed in “The Law.” Most of Hazlitt’s book consisted of the economic critiques of government policies mentioned previously. He did not make any libertarian rights-based arguments against these policies that I recall, but instead argued against them purely by examining their economic effects on various groups of people. At multiple points throughout the book, however, Hazlitt paused from his critiques to make it clear to his audience that he was not opposed to all government action:

A certain amount of public spending is necessary to perform essential government functions. A certain amount of public works—of streets and roads and bridges and tunnels, of armories and navy yards, of buildings to house legislatures, police, and fire departments—is necessary to supply essential public services. With such public works, necessary for their own sake, and defended on that ground alone, I am not here concerned. I am here concerned with public works considered as a means of “providing employment” or of adding wealth to the community that it would not otherwise have had.

While both Bastiat and Hazlitt are regarded as classical liberals, Bastiat, unlike Hazlitt, did not explicitly express his support of a limited coercive government in the manner that Hazlitt did above, at least not in either of his two essays that I read. On the contrary, Bastiat’s political views seemed to be entirely anarchical except for the fact that he explicitly supported something which he called a “government.” Specifically, Bastiat expressed his support of a “government whose organized force was confined only to suppressing injustice.”

In my blog post on Bastiat’s “The Law” I replied to his statement about his notion of a “just government.” I argued that what Bastiat meant by a “government” is not something that we would consider a “government” by today’s definition. I argued that if Bastiat was indeed using the term “government” to refer to a voluntarily-funded organization, as opposed to an organization that coercively imposes taxes on people, then perhaps despite his explicit support of “government,” we could still consider him an anarchist. The term “philosophical anarchist” may be a more appropriate term to describe Bastiat to distinguish him from other theorists, such as Gustave de Molinari, who described how market mechanisms could provide “governmental” services in a free, anarchical, market society.

Hazlitt’s words quoted above make it clear that he was not an anarchist. His words make it clear that the government he supported was not the possibly “voluntary government” that Bastiat may have supported, but rather was a coercive monopolistic government that imposes involuntary taxes on people much like the many governments that rule people across the globe today.

To be fair to Henry Hazlitt and his book, though, he did not attempt to defend his views in support of government in “Economics in One Lesson,” but rather rightly said that such a discussion was beyond the scope of the book. I thus can’t criticize his book on the grounds that he did not defend his claim that a certain amount of public spending is “necessary.”