So...every once in a while, I get recommended this book. Normally by those right libertarian type guys who treat austrian economics like a religious cult. I actually had someone respond to my UBI plan somewhat recently and he brought up this book, while going on about how my ideas will never work because the market is like a force of nature and if you try to mess with it, it will come back to bite you or something. I got kinda annoyed by this, as I really don't view markets in that way, but as social systems that we can change for our enjoyment, well being, what have you, and I don't view economic laws as inviolable, they often come with tons of asterisks that these econ 101 obsessed guys dont focus on.
So, I wanted to do a quick review of this book. I was gonna do a full tear down, but after being flooded with too much information to realistically respond to, I decided to screw it and reduce it to a short summary. I just dont have the patience to go by this one chapter by chapter like some of the others. And it's not like I didn't sound like a broken record when I tried to anyway, so let's just go into the general themes.
This book was written in 1946, right after World War II. Henry Hazlitt was a libertarian economist who had quite a bit of a bone to pick with what he saw with FDR trying to violate the inviolable laws of economics. He believed that even if FDR's agenda had positive effects in the short term, they would be disastrous long term as markets would shift around such policies causing us to be far less productive overall. Ya know, standard right wing stuff.
Now, I did read it around 8-10 years ago as it is free online, but I honestly didn't find it very compelling. It's just standard libertarians worshipping econ 101 stuff, and I didn't recall liking it that much. However, rereading it I have to say my opinion is more...mixed. And normally when I say my opinion is mixed that means I go from liking something to being a bit split on it, but this is the other way, I feel split on it, but that's an improvement.
I mean, in some ways, after reading so much BS recently about how jobs are important for giving people meaning and crap, it is refreshing to see someone acknowledge the cold hard reality about jobs. Jobs are there to make things. They're not there to employ people, and given how much of FDR's legacy was about protecting X industry, or preserving jobs that dont deserve to be preserved, or "spreading the work around" to guarantee "full employment", i found his focus on attacking such ideas to be refreshing.
Admittedly, while I consider myself to be on the left, I have made many criticisms about the traditional left, and this is one of them. I never realized this when I was a conservative because i feel like most conservatives admit that work sucks and is a necessary evil, but a lot of lefties really do have an obsession with work and jobs. And while I sympathize with their goals to preserve people's standards of living and ways to make a living, I really will never get this fixation on work that most of them have. it's creepy and dystopian. Some of them are more work obsessed than right wingers and that's saying something.
So one thing I have to say is this book does focus on how a lot of left wing ideas have flaws. Like how destroying stuff in a war and then rebuilding again for the sake of making jobs is a bad thing, and how we should care about the sausage getting made, not how many people we employ in the process, blah blah blah.
At the same time, this guy's perspective has a negative side. He doesn't seem to realize that hey, people kinda need to work to survive in our society, and as long as that remains the case, we need to ensure work pays at levels that people can afford to live at. A lot of FDR's policies were largely successful at ensuring that people can get jobs, that those jobs pay well, etc. And while I would rather question the paradigm of why jobs at all, I understand why, in a society in which we force everyone to work, to actually make society have the work available. it's not the best approach to the problems at hand, and I think if this book offers anything, Hazlitt does tear the left a new one on their attempts to protect jobs and how this leads to economic efficiency and is kinda stupid in practice, but I understand it.
However, by the time we go into the second half of the book, things decline in quality and it just becomes the same nonsense right wingers always push. How the minimum wage leads to unemployment, stuff bashing unions, etc.
I mean, I think that for all of the theoretical argument we can make, we let the outcomes speak for themselves. What era was better for most people, 1945-1980, or 1980 to present? I'd argue 1945-1970ish was the golden era of economics, and that people have prospered like never before. In the era before that (from the 1800s through the 1930s), and the era after it (the present era), capitalism's flaws became apparent. We didnt really grow much more than we did otherwise, inflation was only a little lower on the whole, but before the 1940s and after the 1970s, you had a lot more people struggling to get by, you had the rich getting richer, the incomes of the poor stagnating, people having to work longer hours, and life being quite hellish in general.
I mean, and all in all, things werent that much better. For all the talk right wingers make of how bad these policies were, in practice, the new deal era was the best era to live in economically. You could afford to feed a family on one income, people were getting more and more luxuries, etc. Nowadays, we got lots of cheap luxuries, but then we have a massive underclass of people paying for them. Like, the downside of trickle down economics is that at the end of the day, the rich get richer, the poor poorer, the middle class goes on like before, but slowly being hollowed out, and they largely enjoy the fruits of everyone else's labor, while underpaying the massive underclass in the service industry ensuring that their lifestyles are feasible. Society becomes more stratified under these economics. The winners win big, the losers lose big, and the middle struggles to stay the same while acting like the frog in the pot.
What FDR accomplished, was shared prosperity. We had more income equality, more people being able to afford to live well, and the rich still being rich but less absurdly so.
Also, there's one thing this book seems to miss: the humanity of the economic system. At the end of the day, this whole system is there to benefit us. We are not there to serve it, but I feel like these economists are so focused on economic growth that they dont focus on the fact that there's more to life than work. Leisure is a good in and of itself. There's more than productivity and efficiency, and perhaps it is better to have a slightly slower growing economy that's less efficient, if the end result is more human, than one that grows constantly. We just went through 40 years of economics dominated by a version of this guy's thinking and I have to say that it sucks.
Also, one more thing. Im not even sure that growth really is slower under these economies either. Why? because economies seem to run best when run from the bottom up, not the top down. We're so used to supply side and trickle down economics, and how if only the rich people have more money they'll use it to invest and create jobs. But as I said, the rich just hoard it and everyone else suffers. post 2008 growth was slow because the rich had so much wealth, and because no one else had any money to spend. What really leads to growth is demand. When you give people money for goods and services it creates demand for goods and services. Which leads to more jobs to fill that demand, which leads to higher employment, a more competitive labor market, and less income inequality. I admit it is possible to overdo it. You can get a wage price spiral of things go too far, but anything up to that point is doable, and the closer we are to that point without going over the line, the better off people are. I'd rather err on the side of a hot labor market with low unemployment and high inflation than the latter, although it is a balance.
But yeah, thats why keynesian theory works, and trickle down doesn't. Hazlitt is pushing the same old austrian economics crap that the right has been pushing since like the 1920s, and it doesnt work. And even worse, it's not even empirically verifiable by design. And the second we try to empirically verify this stuff rather than just relying on axioms with no evidence to back them up, well, I find left wing theories like keynesianism once again produce better results.
I'm not saying that this book has no valuable lessons though. As I said, I find its takes on work and jobs somewhat refreshing after banging my head against all the jobist nonsense surrounding the debates around work that we get in the UBI community and all the weirdos pushing for job guarantees. And I clearly have learned some lessons about what the previous era of lefties did wrong that I believe the next generation should do better. SOmetimes lefties mean well but their policies are inefficient and sometimes arent the ideal approach. Too much focus on crap like job guarantees, and price controls, and stuff like that that just makes no economic sense. But at the same time, I have just as many criticisms, if not more of the right. So it's not like I really agree with the right either.
Honestly, I guess that I kind of looked at both sides of the argument, and came up with my own "synthesis" if we want to get some dialectical materialism up in here. We got the right (thesis), the left (antithesis), and I propose my own synthesis based on a hybrid approach. And I'm not the only one. I know a few authors I've read, like Nick Srnicek and Phillipe Van Parijs have spent much of their careers trying to reinvent the left in the same way. The answer for the left isnt the same old flawed new deal solutions, it's a new approach based on UBI and moving away from work as a concept. We need to embrace that old modernist utopian vision of the mid 20th century of robots doing all the jobs and work becoming less and less central to our lives. If we're growing this much and gaining all of this economic efficiency, rather than throwing the meat back into the meatgrinder to grow the economy endlessly in sisyhpusian fashion, perhaps we should work less.
Of course, that vision tends to gain enemies all over the aisle. Both Henry Hazlitt, as well as the FDR and Bernie leftists would attack me for that one. Seems like for all of the solutions we have, being pro GDP growth and pro work goes without question. It's almost as if, and I noticed this when I read Hazlitt's book, that people would rather people suffer with work out of some misguided sense of fairness and morality, than to liberate people from the concept because it might be unfair to someone's suffering somewhere. Such a backwards and short sighted mentality. But I digress.
So...Hazlitt's book? As much as I want to say it's crap, I have to say, it's only half crap. It has SOME good points SOMETIMES, but I still generally disagree with his overall economic perspective. The reason protectionist measures are so popular among the left is because the right doesnt seem to realize that people need to work to live and as long as people are required to take jobs, laws that ensure minimum standards of treatment and other mechanisms are necessary to ensure that people prosper. And despite the arguments this book makes about them, those ideas worked, and led to the greatest era of prosperity Americans have ever had. And if we want to improve on that, we need to take what they did and make it better. I believe this book has some valid criticisms of the left, but its solutions to shift us hard right to libertarian economics just doesn't work, and despite hazlitt's arguments, he makes a lot of miscalculations about how this stuff works out. In all honesty, a lot of austrian economics is empirically nonverifiable sophistry, even if it makes sense intuitively. And again, while I would like to reform the left into something better and more modern than it is, this isn't it.
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