Saturday Quote of the Day (a little early) “Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine - the special pleading of selfish interests. While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible. In addition to these endless pleadings of self-interest, there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of man to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences.” - Henry Hazlitt, Economics in One Lesson: The Shortest & Surest Way to Understand Basic Economics Does anyone think that Obama or anyone in his administration (including professional economists) as well as the Democrats in the House and Senate who brought us Obamacare ever truly considered the first order consequences of this massive, sweeping piece of legislation? This, the most significant single act of domestic legislation since the New Deal, and carrying with it huge ramifications economically, socially and health-wise for every single American? How much less so then did they take into consideration the possible secondary or tertiary consequences? These are rhetorical questions because the last week or so has proven they, in fact, did not - not even the first order consequences. Hazlitt’s book is a great intro to economics for the layman for those so disposed. Also the second factor Hazlitt talks about here is his reworking of Bastiat’s What is Seen and What is Not Seen. A great essay available for free here: econlib.org/library/Bastiat/basEss1.html
Posted on: Sat, 16 Nov 2013 03:44:00 +0000
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