The whole of economics

The whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. ~Henry Hazlitt

Hazlitt alerted us to the problem, we often don’t look at the whole picture and the long term effects. The law of unintended consequences tells us that we really do need to try to look ahead and see what may or may not come of our actions. Any human on planet earth could do much worse than to take the time to read Henry Hazlitt’s book “Economics in One Lesson“. Thomas Sowell has long echoed Hazlitt’s ideas in his nationally syndicated columns and in his many top selling books. Sowell writes that as a nation we often don’t look to see what the effects are of any proposed action on groups other than the target group and also don’t think about the effects of these actions have over time on the target group. What is the cascade of effects?

It is easy to show “good” effects on one group as you hide the bad effects on other groups. As Dr. Sowell pointed out:

“The government can always save 10,000 jobs — at a cost of 50,000 other jobs. If the jobs that are saved are in one industry, represented by vocal spokesmen, and the 50,000 lost jobs are spread thinly across the country in two’s and three’s here and there, then this is a good deal for the politician who becomes a hero to those 10,000 voters whose jobs he saved. This is obviously not a good deal for those who lose their jobs but they may not even know why. Moreover, when they are not concentrated in one place or in one industry, they are unlikely to come to the attention of the media. So they don’t count politically.”

That Thomas Sowell quote is an example of not looking to see what effects an action has on all groups. This is just more vote buying by the rulers who pull the levers of government power. The actions they take invariably are counterproductive and inherently unfair to the majority even as the rulers make it look otherwise. As H. L. Mencken observed long ago, “There is always an easy solution to every human problem — neat, plausible and wrong.”

Government is never going to do your investigation into these matters for you since they are trying to keep you like a mushroom: in the dark and covered with crap. It is your job to educate yourself and to seek out those who have studied real economics and can help you understand the way the world really works and not be fooled by the demagogues.

Hazlitt also pointed out the main problem we have in trying to reason with the collectivists, socialists, and progressives who all believe in some form of Marxism. He wrote:

The whole gospel of Karl Marx can be summed up in a single sentence: Hate the man who is better off than you are. Never under any circumstances admit that his success may be due to his own efforts, to the productive contribution he has made to the whole community. Always attribute his success to the exploitation, the cheating, the more or less open robbery of others. Never under any circumstances admit that your own failure may be owing to your own weakness, or that the failure of anyone else may be due to his own defects – his laziness, incompetence, improvidence, or stupidity. ~Henry Hazlitt

I think Hazlitt has hit the nail on the head with that quote. I don’t see how I could add much to it here today. The collectivist has great envy of the others who are out in the world getting things done. They are full of hate towards those that they see as “exploiting” the people; often by offering them things to buy. The fact that people buy these things of their own free will matters little to them. Why? Read the quote again.

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One thought on “The whole of economics

  1. You can also build a huge military, tax yusloerf to death when facing no real military enemies.Every federal bureaucracy wants to grow and thrive–and they dream up reasons for doing so,That’s how we end up with a huge Department of Agriculture 80 years after the Dust Bowl. $100 billion budget and we are a nation of fatties. $60 billion a year in direct subsidies to farmers. It is a massive bailout, every year, dwarfing Detroit’s one-time money grab. Gee, do you suppose Sowell ever mentions that?The Defense Department? Permanently mobilized to fight two wars simultaneously, and keep global shipping lanes open. Yeah, so many nations want to close the shipping lanes. This is the number: 0.Odd, how “conservatives” never mention these huge swipes of taxpayer money. These are agencies that want your money, that you earned so they can have salaries and pensions–often after a career of just 20 years.No one in the private sector gets squat after 20 years. Fat and ossified lard and patronage.

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