Notice the bookmark?
So, although the conditions are unfavorable, now is the moment to squeeze my eyes shut, pinch my nostrils together and jump off the diving board into the pool of economics. I gathered relevant books which have sat unread for too many years. I’m reading by rotation: a chapter of Hazlitt, a chapter of Maybury, a chapter of Kirk and a chapter of Sowell (subtitled A Citizen’s Guide to the Economy; I especially like this one), and then repeating the rotation. The primary text is Hazlitt’s Economics in One Lesson.
The Curse of Machinery The title is misleading. Hazlitt believes machinery is a downright blessing and refutes the fallacy that “machines on net balance create unemployment” with undisguised derision for technophobes. I was very uncomfortable with this chapter. I wanted to take the esteemed Mr. Hazlitt by the hand back to the first page of this book where he says, “the good economist looks also at the longer and indirect consequences.” Neil Postman demonstrates the indirect consequences of technology in Technopoly, subtitled The Surrender of Culture to Technology. Postman asserts that technology gives and takes aways; new technologies have done great things, but they have also undone great things. Fascinating reading, but that’s another post.
Spread-the-Work Schemes The maddening inefficiency of labor laws, driven by union demands for the exclusive right to perform certain jobs, lowers production and raises costs.
Disbanding Troops and Bureaucrats Hazlitt again reminds us to look at both sides now. In theory – cough cough – when soldiers are sent home, taxes go down and citizens have more money to spend in the market.
The Fetish of Full Employment It is easy to keep all citizens employed with make-work jobs if efficiency and cost are not considered. Do we really want full employment? Hazlitt is hammering a first principle of economics: maximized production is the objective. His phrase “part of the population supported in idleness by undisguised relief” arrested me.
Who’s Protected by Tariffs? Hazlitt calls tariffs “artificial obstacles to trade and transportation”, noting the war language used, e.g. an invasion of foreign products, in arguments against free trade.
The Drive for Exports Key sentence: “Collectively considered, the real reason a country needs exports is to pay for its imports.” Here’s another great one: “A nation cannot grow rich by giving goods away.” Topic like export subsidies and foreign economic aid are too complex for my pea brain. If we loan money, why do we not expect it to be repaid? Why do we keep loaning it?
Hazlitt argues for using the same principles in foreign trade that we would in domestic trade.
Here is my question: Isn’t what is good for the individual (economically) good for the nation? By that I mean, if spending less than you earn is sound policy for one family, isn’t it sound policy for our country? Is that too simplistic, too artless a view? I’m glad for the impetus to work through these questions, but I must confess that this is making my son’s algebra lesson on rational expressions enticing!