Tuesday, June 16, 2009

Basic Economics

I am nearly finished reading Henry Hazlitt's classic, Economics in One Lesson. It is an excellent book--one that should be required high school reading. There are many great quotes and lessons in the book.

This next quote distills Hazlitt's arguments and will hopefully entice others to read this wonderful book. Hazlitt refutes many economic fallacies that have brought economic ruin upon all those that have believed them. As Ecclesiastes says, "What has been is what will be, and what has been done is what will be done, and there is nothing new under the sun."

"Now few people recognize the necessary implications of the economic statements they are constantly making. When they say that the way to economic salvation is to increase credit, it is just as if they said that the way to economic salvation is to increase debt: these are different names for the same thing seen from opposite sides. When they say that the way to prosperity is to increase farm prices, it is like saying that the way to prosperity is to make food dearer for the city worker. When they say that the way to national wealth is to pay out government subsidies, they are in effect saying that the way to national wealth is to increase taxes. When they make it a main objective to increase exports, most of them do not realize that they necessarily make it a main objective ultimately to increase imports. When they say, under nearly all conditions, that the way to recovery is to increase wage rates, they have found only another way of saying that the way to recovery is to increase costs of production." Economics in One Lesson p. 193

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