Economics, Again


Notice the bookmark?

Much of my learning is driven by fear.  I think, “If I don’t learn this now, I’m afraid I never will.” 

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. 

Can we take a break for a minute?  All this “production” talk is making me crazy.  There is more to life than “maximized production”!  Maybe I’m confusing economics and life.  Albert Camus said, “The society based on production is only productive, not creative.”  I just wanted to breath a deep breath, sip some tea, and imagine the sound of waves caressing the shore.  There.  Break’s over.

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!    

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12 thoughts on “Economics, Again

  1. LOL  funny how my laundry looked so much more interesting than my accounting homework when I was in college 🙂
    Well-written assessments of each chapter.  Perhaps it will make you feel better to know that I did NOT get all the assignments read.  And here you put us to shame by reading FOUR economic books.
    I’m not fond of Albert Camus and his existentialist position, which makes me say that I tend to see production as creative.
    There’s an interesting volume of the history of housekeeping that I am in search of.  It traces the impact of inventions like vacuum cleaners on work/labor in the society.  Cant remember the title 😦

  2. I am guessing the chapter on machines is going to be the most controversial one we face. I just realized this week that we own the Kirk book. It was a CLASS textbook. I know it will make Dana happy and now maybe I can read it. Richard Maybury is as far as I’ve gotten in economics before.Great post!

  3. Dropping back by to say I dont think that economic policies good for nations are necessarily good/appropriate for a family situation.  But I dont have any backup for that 🙂  Only that a family can run very effectively under the rule of a benevolent dictator.  I would NOT trust a dictatorship as a form of government.  A family really isnt always republican/representative in form either…the way our Constitution is set up. 
    Rushdoony would be a good source on this.
    Does that name scare you??

  4. Goodness, not at all!  (about Rushdoony).I wasn’t thinking about form of government as much as basic principles.  Avoid debt, pay bills on time, look for the best quality at the best price, that sort of thing.  There is certainly not a one-to-one correlation.

  5. You’re starting to scare me!   I think you’re wayyy out of my league if you’re reading four economics books.  Actually, I already knew that! Lol!! I hang around hoping I’ll pick up something valuable anyway.

  6. Okay, I have to confess that I have a degree in Econ/Business — I majored in that and English at Westmont. Back in the late 70’s, I knew I wanted to teach English so I got my B.A. in English, but I simultaneously got a degree in Econ because my dad was so sure that I needed a back-up degree. Fortunately, for all concerned, I have never had to use the back-up degree

  7. Laurie, you are full of wonderful things today.  I followed the link to Iona and I think we will plan on spending a night at the hotel on the island.  The Postman Graduation Speech is vintage Postman.  As of today, I have only read Amusing Ourselves to Death (but several times); I think I’ll complete Technopoly this week and I also have The Disappearance of Childhood on my shelf.  Thanks for all the wonderful links.

  8. I taught a class at church several years ago based loosely on the book Your Money or Your Life by Joe Dominguez and Vicki Robbin.  They talk about only buying what you absolutely need and keeping track of every last penny.  I suggested something similar in class and one man said, “well, if everyone stopped buying things, the economy would collapse!”  I didn’t know how to answer him.In theory, you are correct in thinking that what’s good for the individual is good for the whole. However, for the past 50-100 years, our economy has been so consumer driven that I don’t know how to predict what would happen if everyone tightened their belts at once.  Luke was reading a book over Christmas about the Depression titled The Forgotten Man by Amity Shlaes.  He read parts of it aloud and it sounded very good. I’m intrigued by the Postman book as I loved Amusing Ourselves to Death.You do such a wonderful job of self education! I’m thankful you share your learning highlights with us.Blessings,Sandy

  9. You’re making it awfully dificult for me to resist re-reading all these books! I’ve read all in your stack except for the Kirk, but it’s been a while.  Problem is, I just don’t have time right now.
    Sandy, I read Your Money or Your Life many years ago and loved it.  Our family is very frugal, and we spend far less than we make.  I often wonder what would happen if everyone lived like we do–would the economy collapse?  When did it become necessary for people to spend so much money in order to keep everything going?
    I also have The Forgotten Man and it’s going on my spring reading list.

  10. It has taken me a day to get over here and read your entry, but my suspicions were right: you and I were uncomfortable in the exact same places! I really think it is such a balancing act (with technology) that maybe getting comfortable with it is really the most dangerous thing anyhow.
    Also, as I’m thinking more about it, the whole import/export thing seemed a little more comfortable with a global economy than I’m inclined to be.
    I’m very impressed with your reading list. Someday, I will have to read the other books. I’m a huge Postman fan, but I’ve never read Technopoly!

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