“The art of economics consists in looking not merely at the immediate but at the longer effects of policy; it consists in tracing the consequences of that policy not merely for one group but for all groups”
The premise of Henry Hazlitt’s Economics in One Lesson is simple: Policy should be honest about the losers, as well as the winners for any given policy.
By their very nature, policy interventions in markets create winners and losers. Obviously, in an ideal world, policy should aim for win-win solutions, not win-lose solutions, but in the real world, this is not always possible (or at least not politically palatable).
Sometimes, interventions may be necessary (as with solving the ergodicity problem in economics, which shows that pure randomness might be good for groups, while still being terrible for individuals, hinting that sometimes the invisible hand of the market needs a slap to encourage social mobility and stop inequality becoming systemic …).
However, it is always disingenuous for economists and politicians to ignore or gloss over the harm being done to one group (usually a minority) in order to improve the lot of a second group by focusing only on the upside and failing to explicitly articulate the true costs across both space (form one group to another in present society) and time (across generations).
This is the task of foresight practitioners futurists, economists and policy makers. To look at the true costs of our pet ideas, plans and policies; not just for our favourites, but for everyone, and not just in the short term, but over the long run.
The world would be a better place if more people read and understood this book.