Document Type

Book Review


Book Review: Concept of the Corporation, Financing American Prosperity: A Symposium of Economists, & Economics in One Lesson, 56 Yale L.J. 180 (1946)


The books noticed here, at different levels of communication, all attempt to state conditions of our material and social welfare. Mr. Hazlitt's message is pitched for anyone literate enough to absorb the Reader's Digest, where it has already received the accolade of condensation. The six distinguished economists who contribute to Financing American Prosperity address college seniors, with a wary eye on each other. Mr. Peter Drucker, who denies being an economist at all (he is a member of the department of Political Economy at Bennington College), takes a "social and political approach to the problems of an industrial society—as distinct from economics." His language is simple; his ideas are not.

The one lesson of Economics in One Lesson, the author says, "can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups." So far, so good. Mr. Hazlitt teaches his Lesson by exposing again the most glaring fallacies of those who have strayed from the principles of classical economics, to which he is a proud and confessed adherent. He uses these principles effectively for lucid analyses of such persistent though hoary heresies as protective tariffs, one-way foreign trade, spread-the-work schemes, parity prices, silver purchases and other subsidies to sick industries, and the cruder forms of purchasing-power theory—effectively, that is, within his basic assumptions, which again are those of the mid-nineteenth century. In his other capacities as publicist and literary critic, the author may not subscribe to the sway of Economic Man in human affairs, but in the brief pages of One Lesson he rules unmitigated. Thus to the author, as to his predecessors, "a mere recital of the economic policies of governments all over the world is calculated to cause any serious student of economics to throw up his hands in despair"—this with reference to protective tariffs. That protectionism may have its roots, not in a misunderstanding, but in a profound rejection of the anarchy of laissez-faire, a thesis brilliantly developed by Karl Polanyi in The Great Transformation, is beyond the scope of One Lesson.

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