
Hazlitt's 1946 distillation of Bastiat's 'broken window' insight: good economic reasoning requires seeing both what is visible and what is made invisible by a policy. A short book that teaches a single analytical habit, and that habit is genuinely useful regardless of your politics.
Hazlitt states a single lesson and then applies it to twenty-odd policy questions. The lesson is that economics consists in looking not only at the immediate effects of a policy but at the longer effects, and not only at the consequences for one group but for all groups. He takes it from Bastiat's essay on what is seen and what is not seen, and the broken window fallacy is the opening illustration: repairing a broken window employs a glazier, which is visible, and prevents the shopkeeper from spending the same money elsewhere, which is not.
He applies the lesson to public works, taxation, credit programmes, tariffs, export subsidies, price controls, rent control, minimum wages, unions, profits, saving, and the effect of technology on employment. In each case he identifies a group that visibly benefits and a diffuse cost borne by people who cannot identify it.
The book is short, clear and written for a general reader without any mathematics. It was published in 1946 and revised in 1979.
It is a work of advocacy rather than of analysis. Hazlitt writes from the Austrian tradition and treats contested empirical questions as settled by logic. The minimum wage chapter, in particular, states as certain a result that subsequent empirical research including Card and Krueger has made genuinely contested. He does not engage seriously with market failure, externalities, monopsony, information asymmetry or public goods. Readers should treat it as a well-stated version of one position rather than as an introduction to economics, and should read something covering the opposing arguments alongside it.
Readers who want the clearest short statement of the case against intervention, read alongside a source covering the arguments Hazlitt does not engage.
“I've given dozens of copies of this classic to students... The book should be required reading on every campus.”
Chosen by shared topics, the entries that hold them, and the people who recommended both.
Thomas Sowell's deliberately introductory survey of how prices, incentives, and tradeoffs work across housing, labor, international trade, and discrimination. Dense with empirical examples. Its main contribution to this list is showing the gap between policy intentions and policy consequences.
How the division of labour and free markets make a nation rich.
Recommended by: Naval Ravikant, Patrick Collison and 7 others
Price theory in daily life: coffee near stations, supermarket tiers and used cars.
Recommended by: Mohnish Pabrai, Naval Ravikant
Economics argued through a novel; markets and their moral defence
“there is a book called The Invisible Heart which explains basic economics to most people” — Joel Greenblatt
Source: Masters in Business transcript: Joel Greenblatt (2018)
Recommended by: Joel Greenblatt, Mohnish Pabrai
Prosperity grows as trade and specialisation let ideas meet and combine.
“…books I've recommended, highlighted to death, or forced on friends.” — Andrew Wilkinson
Source: Andrew Wilkinson's Bookshelf, neverenough.com
Recommended by: Andrew Wilkinson, Bill Gates, Frank Martin and 10 others
Sector-level explanation of why productivity differs so much between countries
“on how technology-driven productivity growth improves human welfare and creates more jobs and higher wages” — Marc Andreessen
Source: @pmarca, companion thread to 'It's Time to Build'
Recommended by: Marc Andreessen, Patrick Collison
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