Review of the book Hazlitt, H. (2020). Economia em uma única lição (L. G. J. de Carvalho, Trad.; 5ª ed.). LVM Editora.
Introduction
Henry Hazlitt (1894-1993) was an American economist who became an influential writer on economics. The book is an analysis of the interventionist economic actions applied by governments seeking to meet the short-term demands of specific interest groups. In his opening chapter, the author introduces the reader to the concept that governs the book, summarizing it in the following quotation:
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, 2020, p. 29)
Over 24 chapters, each devoted to a commonly adopted action or policy, the author sets out the dangers and errors involved in observing consequences and phenomena from a long-term perspective and across society as a whole. Among the examples used are the war economy, public works and taxes, state interventions and diversions of production, labor market dynamics, resistance to technological advances, price controls, tariffs and inflation. Through these scenarios, Hazlitt highlights the apparently beneficial narratives put forward by governments in adopting these actions, as well as the support of the ordinary citizen for them, when only their primary effects are observed. The author sets against them the opportunity costs related to these measures, demonstrating the harm to society when their secondary effects are analyzed. The author closes the work with a chapter written 30 years after the original publication, in which he offers a reflection on and review of the persistence of the economic models discussed, reaffirming his theory about their effects over this span of time and bringing in several examples from the American economy.
CRITICAL ANALYSIS
Hazlitt’s work maintains that an economist’s greatest contribution is not limited to deconstructing the technical errors of government interventions, but rather lies in acting as an ethical and analytical agent, whose primary function is to bring to the ordinary individual the opportunity cost of these actions, which are frequently presented in discourses that are attractive in the short term and easily perceptible to society. While the ordinary citizen is stimulated by a fragmented perception and thus tends to support such policies, the economist, grounded in the author’s principles, must expose the consequences for all social groups over the course of time.
The author supports his arguments, as in chapter four, “Public works mean taxes,” by showing how taxation withdraws capital from private enterprise and directs it to the public sector, which is more inefficient, generating less value for society, diverting production and limiting the creation of new jobs in areas of demand; the construction of a bridge is used as an example. However, in this same chapter, Hazlitt does not explain how private enterprise would meet the social demand for the bridge, nor does he make clear how to apply the principles he presents in this case. Likewise, in chapter eight, “Spread-the-work schemes”, where the action in question is the reduction of working hours with or without guaranteed income, the author maintains that the real effects of this action are nil, since only part of the income is observed being transferred from one worker to another; or else harmful, raising the cost of production, driving out the marginal producer and thereby increasing unemployment. However, developmentalist or progressive enthusiasts may counter his arguments by bringing up the reductions in working hours that have occurred historically, taking into account that wealth, productivity, employment and quality of life continued to increase even after these changes.
RELATION TO THE AUSTRIAN SCHOOL
In sum, the principles and elements of the work bring out essential concepts for everyone interested in the Austrian School of Economics. It can also be observed that all the government policies pointed out persist today in a widespread and systematic way, which makes the book recommended reading for all public managers who seek to improve their decisions and thus avoid compromising the solutions and benefits they intend to create. Moreover, the work supports the critical development of social economic dynamics, making it possible to better discern the narratives behind government measures and projects. It falls short of presenting practical, immediate or even transitional applications for solving emerging demands, so it is necessary to seek other complementary sources to deepen one’s knowledge in this respect.