I just read the excellent ‘Economics in One Lesson’, by Henry Hazlitt.  Written more than fifty years ago, it is just as readable and relevant as if it had been published last week.

He starts out by arguing that the reason Economics is haunted by more fallacies than other areas of study is because the world is full of groups who have a direct interest in arguing plausibly and persistently for policies that will benefit them at the cost of others.  Unlike an objective field such as physics or mathematics, there are no end of individuals and groups who are intentionally trying to confuse the general public on the subject of economics.

Hazlitt’s primary lesson is this: “The art of economics consists in looking at merely at the immediate but at 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.”

What amazed me reading the book is how up-to-date it sounded.  The policies and politics he discusses – strikes, tariffs, industry bailouts, interest rates, taxation, minimum wage laws and protectionism are precisely the same policies that are discussed today.  And the positions he argues against are just as prevalent today as they were in 1946.

The book is freely available at http://www.fee.org/library/detail/economics-in-one-lesson-pdf-doc-audio, and I heartily recommend it.

For a lighter presentation, though surprisingly comprehensive, I also recommend this Hayek vs Keynes Rap Anthem, and Keynes vs Hayek Round Two.