“Economics in One Lesson” — A Must-Read for Everyone
At my company, LoginRadius, we love simple things. One of our core values is to create simple yet impactful things. As a big believer of simplicity, I absolutely hate two of the systems that affect every one of us and which are extremely complicated — Legal and Economics.
Economics is not only out of control, which we’ve seen from the subprime recession in 2008, but it is also beyond the understanding of common people. Not to mention, politicians are also exploiting the latter as a means of grabbing power.
The book, “Economics in One Lesson — The Shortest and Surest Way to Understand Basic Economics”, uncovers economic fallacies, their impact on common people, and how politicians have been exploiting them to gain and retain power. The first edition of the book was released in 1946 and the author, Henry Hazlitt, has won praises from many, including Nobel laureate F. A. Hayek.
About the Book
The book is divided into 25 chapters across 214 pages, with each addressing a specific subject and the related economic fallacies. For example, chapter 14 is “How the Price System Works” and chapter 23 is “The Mirage of Inflation”. More importantly, the author uses an extremely simple example to explain one of the most complex economic principles.
The book primarily talks in reference to American economy, however, the rise of capitalism has made most of these principles applicable worldwide.
You can purchase it online here for $16. Not very expensive and you can read it in one go!
Who is It For?
Well, the economy and economic policies affect everyone, and all of us have to make many personal financial decisions every day. This book will reshape your economic views and will really help you understand how key economic policies are affecting you. So, I would recommend this read to anyone who gets basic economic terms.
My Favourite Pieces
1) I absolutely loved this piece from Chapter 1, “The Lesson”, which is the foundation of the book:
“The whole economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence i.e. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequence of that policy not merely for one group but for all groups.”
2) From Chapter 21 “Enough to Buy Back the Product”
“The best prices are not the highest prices, but the prices that encourage the largest volume of production and the largest volume of sales. The best wage rates for labour are not the highest wage rates, but the wage rates that permit full production, full employment and the largest sustained payrolls. The best profits, from the standpoint not only of the industry but of labor, are not the lowest profits, but the profits that encourage most people to become employers or to provide more employment than before.”
3) And, this one is the crux of the book:
“If we try to run the economy for the benefit of a single group or class, we shall injure or destroy all groups, including the members of the very class for whose benefit we have been trying to run it. We must run the economy for everybody.”
Lastly, the author also recommends a few other books on economics if you want to take a deep dive into it. I found it very helpful and may end up reading more.