Economics in One Lesson

In this final chapter, Hazlitt summarizes the main points of his book. To make sound economic conclusions, he argues, experts must recognize not only primary but secondary consequences of policies; they must not only look at the particular but also the general; they must focus not only on the short term but understand the long term; and they must identify not only obvious and visible results but look for the implied consequences.

To illustrate this, Hazlitt uses a mathematical analogy. If x = 5 and x+y = 12, then the value of y, though not stated, is inevitably 7. Implications in economics operate similarly, in that they are not visible, but they can be directly and precisely derived from existing information.

Economic beliefs are the result of people making statements without looking for their necessary implications. Hazlitt claims that this is often caused by emotionalism, though it can also be an honest mistake. Misguided or uninformed people might believe in such things as raising wages above reasonable market prices and defend the increase of taxes to improve quality of life, without closely examining the implications in their statements. Hazlitt argues that although there are times in which raising wages and taxes may benefit the overall economy, the fault lies in making sweeping statements based on emotionalism and without considering all aspects of their implication.