If you’re only going to read one economics book in your life make it Henry Hazlitt’s Economics in One Lesson.
Hazlitt takes the great Frederic Bastiat’s
That Which is Seen, and That Which is Not Seen and shows what separates the economically literate from the snake oil salesmen. In Bastiat’s essay, he tells the story of a shopkeeper with a careless son who breaks his shop window. It is proposed that the boy is actually an economic hero because, out of his destruction, he has actually created jobs. After all, if you break a window doesn’t that mean a job and money for the glazier? Doesn’t that mean that the glazier will then create even more jobs by spending his money on supplies and so forth? If this were true, then indeed we should commend all vandals! However, Bastiat proves otherwise and Hazlitt shows how this fallacy is still with us today in various forms such as public works, inflation and warfare.
It still amazes me how many Broken Window Fallacies I still see lauded by the so-called
experts. Thanks to Bastiat and Hazlitt, we know better than making heroes out of criminals.