Henry Hazlitt Ep. 004: Flashes of Liberty Series14 min read
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World War II ended in 1945, but it didn’t end the economic and political fallout. This was the year of Winston Churchill’s famous Iron Curtain speech. The Iron Curtain was the metaphorical (an eventually literal) divide between Eastern and Western Europe. It ran from Arctic Russia through the middle of Germany, and down to Bulgaria ending at the Black Sea. This wall represented not only physical isolation of communists from the rest of the world but a hard line between economic ideologies. This division raged on in America with the McCarthy era. But everyday Americans found themselves stuck between polarized sides. While intellectuals debated, and politicians went on witch-hunts, one American journalist sought to work out the facts. His name was Henry Hazlitt, and in 1946 he published Economics in One Lesson. A layman’s introduction to the field economics.
Henry was born in 1894, in Philadelphia, to Stuart and Bertha Hazlitt. His grandparents were immigrants from England, Ireland, and Germany. Henry’s father died from diabetes when Henry was just an infant, and his mother later remarried and moved to Brooklyn. But Henry’s stepfather died in 1907 leaving Henry to support his mother.
Henry was a self-taught writer and economist. He originally wanted to be a psychologist, but his family situation kept him from completing a formal education. Henry tried and failed to get a job numerous times. He never worried about that though. He remarked that, because of the free market, he could usually find a job the next day. With each job lost, he learned something new and was eventually making enough to live on. Hazlitt was a prolific writer. He eventually obtained writing positions among several top news organizations including The Nation, The New York Times, and Newsweek. But he would soon be an unwelcome contributor because he refused to soften his stances on economics.
With well over 6,000 writings, Henry condemned many American policy positions. These included the income tax, central banking, the New Deal, Keynesian theory of economics, socialism, war socialism, price controls, unionism, the welfare state, and deficits. Henry didn’t just read books and write articles. He met, befriended, and eventually worked alongside, many prominently known names including Ayn Rand, philosopher Bertrand Russell, and Ludwig von Mises, among several others. Mises and his wife had fled German-occupied Europe and emigrated to America in 1940. Mises was a theoretical economist from Austria and we’ll discuss him in a later episode. Hazlitt arranged for Mises to contribute articles to the New York Times and helped him get a teaching position at New York University.
Under the direction of Mises himself, Hazlitt penned Economics in One Lesson. It’s sold over a million copies and has been translated into ten languages. It still remains unsurpassed as the best introduction to economics. Here is an excerpt from Economics in One Lesson, Chapter 1
“[In addition to special interests] … there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency … to see only the immediate effects of a given policy … and to neglect to inquire what the long-run effects of that policy will be … It is the fallacy of overlooking secondary consequences.
In this lies almost the whole difference between good economics and bad. The bad economist sees only what immediately strikes the eye; the good economist also looks beyond …
The distinction may seem obvious … Doesn’t everybody know, in his personal life, that there are all sorts of indulgences delightful at the moment but disastrous in the end? Doesn’t every little boy know that if he eats enough candy he will get sick? Doesn’t the fellow who gets drunk know that he will wake up next morning with a ghastly stomach and a horrible head? Doesn’t the dipsomaniac know that he is ruining his liver and shortening his life? Doesn’t the Don Juan know that he is letting himself in for every sort of risk, from blackmail to disease? … do not the idler and the spendthrift know, … that they are heading for a future of debt and poverty?
Yet when we enter the field of public economics, these elementary truths are ignored.”
Hazlitt wasn’t just echoing Mises; his comments here harken back to the French Revolution and one particularly astute think, Frederick Bastiat who spoke about the seen and unseen and the fact that for all our effort to affect our empirical world, we cannot predict the demonstrable effect of unintended consequences. Henry’s mark on the economic world can be seen today, as he was a founding board member of the Foundation for Economic Education. Is writings can be found at FEE.org and at the Mises Institute at Mises.org.
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