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Economics is a broad and largely misunderstood field; so much so that even experts still struggle with some fallacies. And yet, it is a field that everyone needs to know for themselves.
This summary is of a timeless classic by Henry Hazlitt titled “Economics in One Lesson”. In it, you would find a quick guide to the confusing field of economics.
By the end of this summary, you will be armed with the knowledge to discern good from bad economic policies. Henry Hazlitt was popular in the 19th century as one of the leading economic thinkers of the Austrian School.
"If you simply read and comprehend these relatively short texts, you will know far more than most educated people about economics and government. You certainly will develop a far greater understanding of how supposedly benevolent government policies destroy prosperity. If you care about the future of this country, arm yourself with knowledge, and fight back against economic ignorance. We disregard economics and history at our own peril." ~ Ron Paul
Key points
1
The knowledge of economics empowers you to look beyond the present into the future that very few can see
Economics is probably the most misunderstood field in the world. Even acclaimed experts on the subject still struggle to understand certain aspects of it. The dynamic nature of the subject makes it so, and it even gets worse because economics affects our greedy nature more than anything else. It's easy to study physics or maths or art without having it interfere with your emotions, but it's hard to make economic policies without looking to cut some material benefits for you or the group you represent.
The interference of selfish interests accounts for why economic policies are constantly changing. If you study the economic history of your country, you will find that different policies have been enacted over time and most of these policies favor one group of the country while other groups suffer greatly from it.
The interference of selfish interests accounts for why economic policies are constantly changing. If you study the economic history of your country, you will find that different policies have been enacted over time and most of these policies favor one group of the country while other groups suffer greatly from it.
An ideal economic policy should not only favor one group of people, it must prove to be in the best interest of the masses.
A very important metric for determining a good economic policy is its long term effect. You know a good or bad economist from the way he or she analyzes a policy. A bad economist sees only the short term benefits of a policy, but a good economist is able to analyze both the short and long term benefits of a policy then make his judgment based on his findings.
As complex as it may seem, economics can be reduced to just one single lesson and that's what has been discussed in this chapter. To reiterate, when making economic policies, don't just consider the immediate benefits, look at the long term effects; and if the long term effects are good, verify to be sure they don't just favor one single group, but all groups.
Did you know? Many classical economists made the mistake of focusing on just the long term benefits of their policies and it resulted in so many negativities. Economic policies must be beneficial both in the short and long terms.
As complex as it may seem, economics can be reduced to just one single lesson and that's what has been discussed in this chapter. To reiterate, when making economic policies, don't just consider the immediate benefits, look at the long term effects; and if the long term effects are good, verify to be sure they don't just favor one single group, but all groups.
Did you know? Many classical economists made the mistake of focusing on just the long term benefits of their policies and it resulted in so many negativities. Economic policies must be beneficial both in the short and long terms.
2
Economic need only equals demand when there is sufficient buying power
Have you heard of the broken glass fallacy? It was first introduced in 1850 by economist Frédéric Bastiat in his essay titled “Ce qu'on voit et ce qu'on ne voit pas” (“That Which We See and That Which We Do Not See”).
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It's not economically wise to unevenly spend government money in the name of creating jobs
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Private loans are economically better than government loans
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Are you scared that AI and robotics will take your job? Don't be!
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