Economics in One Lesson

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.