Inspired both by the season (“Now if I buy this gift for my parents, what other gift can I still afford for my godson?”) and a recent interview with William Peterson of the Heritage Foundation, I just read Henry Hazlitt’s Economics in One Lesson (Fiftieth Anniversary Edition: Laissez Faire Books, 1996).
It ought to be required reading for any person with control over the public purse.
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 governmental subsidies, they are in effect saying that the way to national wealth is to increase taxes. … 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.
… [W]e ought to make sure in each case that both sides of the coin have been considered, that all the implications of a proposal have been studied. And this is seldom done.
