This is a readable economics book that teaches you to look for secondary consequences of any policy. It closely follows libertarian thought while debunking economic fallacies that unfortunately are still promoted today. Highlights:
Machines, technological improvements, economies and efficiency do not throw men out of work. […] It is a misconception to think of the function or result of machines as primarily one of creating jobs. The real result of the machine is to increase production, to raise the standard of living, to increase economic welfare.[…]
There is first of all a misunderstanding of what it is that has been causing prices to rise. The real cause is either a scarcity of goods or a surplus of money. Legal price ceilings cannot cure either.[…]
The best way to raise wages, therefore, is to raise labor productivity. This can be done by many methods: by an increase in capital accumulation i.e., by an increase in the machines with which the workers are aided; by new inventions and improvements; by more efficient management on the part of employers; by more industriousness and efficiency on the part of workers; by better education and training. The more the individual worker produces, the more he increases the wealth of the whole community. The more he produces, the more his services are worth to consumers, and hence to employers. And the more he is worth to employers, the more he will be paid. Real wages come out of production, not out of [minimum wage laws].[…]
The real cause for the tremendous increase in real wages in the last half century (especially in America) has been, to repeat, the accumulation of capital and the enormous technological advance made possible by it.[…]
If profits are limited to a maximum of, say, 10 per cent or some similar figure, while the risk of losing one’s entire capital still exists, what is likely to be the effect on the profit incentive, and hence on employment and production?[…]
Inflation itself is a form of taxation. It is perhaps the worst possible form, which usually bears hardest on those least able to pay.
You’ll also learn:
- How when the profit motive is lessened through unions, regulation, or price fixing, producers will choose to invest abroad.
- How tariffs hurt both the consumer and producer
- How keeping interest rates unnaturally low creates economic distortions
The book leaned dry and read like a textbook at times, but chapters are short and examples lively. You want to keep going because you know you’re reading something that will arm you against bad economics spouted by the media and politicians.
Overall, this is an economic red pill work that is logical and intuitive, ultimately advocating for capitalism with minimal government interference. It reminds you that economics is zero sum, that for anyone who benefits from a certain policy, someone else suffers, and that you must see both sides of the coin. Even though I took economics for a full year in college (macro and micro), this book gave me a better perspective of its real-world applications. Recommended.
Read More: “Economics In One Lesson” on Amazon