Summary Of Economics In One Lesson By Henry Hazlitt

“The art of economics consists in looking not 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.” (Hazlitt) This is the core lesson that Henry Hazlitt hopes his reader learns as he reads his book Economics in One Lesson. This interesting read explains the fallacies of economics and provides short lessons that assist the reader in understanding why these are misconceptions. Three of the lessons that coincide with Northwood University’s ideas of individual liberty and economic freedom are tariffs, minimum wage, and public works mean taxes.
“Who’s ‘Protected’ by Tariffs?” (Hazlitt) is a lesson that explains how tariffs
Hazlitt offers that “there is no escape from the conclusion that the minimum wage will increase unemployment.” (Hazlitt) He backs up this statement by explaining that businesses cannot afford to pay a person more than they are worth. If the government enforces a minimum wage that is higher than the worth of an employee, then the employer will cease employment with that individual and hire someone with more skills to perform the job ultimately putting the first person out of employment. Another downfall to raising and enforcing a minimum wage is that the costs of products will have to increase so the business can afford to pay their employee's minimum wage; therefore placing the increase of pay to the consumer. The negative result of this outcome is that the consumer will either find a substitute for that product or purchase less. In the long run, this may put the company out of business. This course of action would then cause more unemployment since all the employees of that company are now without jobs. Many American’s believe that people are unable to live on minimum wage and therefore encourage the government set the minimum wage higher without thinking about the long-term effects of higher costs for goods and increased unemployment. Another factor is that when the government raises minimum wage no one else receives an increase in pay. Consequently, retirees, middle-class workers, people of social security all suffer as the cost of goods increases yet they do not receive increases in their income. This lesson supports the Northwood University’s ideas as stated in their book When we are FREE, “Why do we have such a law? Part of the answer is that decent people, albeit misguided, want others to have a higher income. But a larger part of the answer is that the minimum wage law serves the economic interests of one class of workers at the expense of another class of workers.” (Nash, Matcheck,