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Your Government Has No Idea How Bad A Mess It's Making
on February 16, 2011
Henry Hazlitt has done the layman a huge favour in writing this book. Unfortunately, it is not only the layman who desperately needs this book. It is the world's politicians, the presidents of central banks, and those who control monetary policy who have severed their moorings with common sense and are now afloat on a raging sea of market fall-out and who don't understand how they got there who need to read this book, like, yesterday.
A proponent of Austrian Economics (the free market, self-governed through the law of supply and demand, with minimal gov't intervention), Hazlitt puts forth an irrefutable case against the foggy-headed reigning economic model of the day - Keynesianism. He does this by effectively exposing and refuting the many fallacies which Keynesians embrace as orthodoxy. Where Keynes is complex and convoluted, Hazlitt is simple and straightforward. And unlike Keynes, whose work wreaks of ivory-tower arrogance and elitist snobbery, Hazlitt writes with everyday wisdom and appeals to the common sense of the average person who knows instinctively that you can't improve your financial standing by plunging into debt in order to spend your way to affluence. If only our governments understood this.
At the heart of Hazlitt's book is the principle that true economics must consider the general effect over the long term of any policy it enacts. It is from the solid foundation of this principle that Hazlitt attacks all modern economic fallacies which, he argues, all have at their heart the problem of looking only at the effects of a policy on one special group in the short term. And Hazlitt reminds us that what would be foolish for household finances is all the more foolish for a nation since it the same foolishness magnified a million times over. Along with his use of common sense and plain logic, Hazlitt effectively uses statistics to prove his points (mercifully he limits his use of statistics, unlike many modern writers who use almost nothing but).
If Keynes is the alchemist wizard who has masterfully entranced his economist minions through a combination of academic sophistry and elitist intimidation, Hazlitt is the plain speaking sage who breaks the spell by speaking words that ring true with every person's experience of the real world and the economic forces at work within. This is not only a great place to begin one's study of economics but it is something that politicians and voters alike should have to re-read every election year before they cast their ballots. If we had been doing that up until now, we would not be in the economic disaster we currently are.