Monday, February 1, 2010

Precis: Economics in One Lesson

(This precis is an attempt to refine my first impressions about the book. I still stand by what I wrote in my previous post)

The main argument of Economics in One Lesson is simple (Indeed, one might say it is "elementary"). Hazlitt argues economic orthodoxy is ridden by two major fallacies. The first fallacy is to only see the short-term effects of economic policies and to disregard long-term effects. The second fallacy is to only consider the economic consequences for a select group of people instead of considering the consequences for society as a whole. Because of these two fallacies, economic orthodoxy suffers from a kind of irrational myopia and therefore fails to actually practice economics--an objective science based on rationality and logic.

Hazlitt's arguments are quite seductive because they appeal to the reader's own sense of intelligence and capacity for rational thought. The rhetorical question that undergirds the entire book seems to be: how can you be so stupid and believe economic orthodoxy? In the chapter on tariffs for instance, Hazlitt asserts that "only minds corrupted by generations of misleading propaganda can regard [my] conclusion as paradoxical." Apparently, if you disagree with Hazlitt and fail to follow through with his "logical" conclusions, then you must be a brainwashed sheep of the establishment.

Hazlitt's overbearing use of logical appeals yields the rhetorical force of his argument. By restricting the economic debate to logos, opponents to his view have very little room to maneuver. After all, if Hazlitt's conclusions are logically valid, then your disagreement is the negation of truth (this is assuming his arguments are also logically sound, which in my opinion is questionable). As a result, counter-arguments rooted in the principles such as justice and fairness are dismissed as "emotional" and therefore irrational. Hazlitt argues that "justice" and "fairness" are "nebulous conceptions" and the byproducts of "medieval" thought. In other words, since they cannot be rigorously defined then they are subjective and emotional as opposed to objective and logical.

Thus, Hazlitt contrasts his "calm," calculating practice of economics with an "emotional economics." Following the tradition of liberalism, Hazlitt claims the authority of rational thought and uses it to dispel tradition and orthodoxy, which are not rooted in rationality but instead in ignorance and habit. In this way, economics is treated as an objective "science" much like "mathematics." The practice of economics is simply deduction: to note the "premises," and to follow their "logical" implications based on fixed economic laws. To be a good economist means to be disinterested and able deduce formally valid conclusions. An "emotional economics" on the other hand is short-sighted, self-interested, and irrational. It does not see things whole, but only sees things in the short-term or from the perspective of a special economic interest.

In addition to logical appeals, Hazlitt's argument also draws its rhetorical force from employing the common caricatures of government, bureaucracy, politicians, and politics. These easily identifiable stereotypes are iterated again and again in each chapter. Although Hazlitt uses different examples in each chapter, the story and its characters remain the same. Through simplifying narratives, Hazlitt gives readers a schema from which to make sense of the politics in their everyday lives. Taxes become "theft"; liberals become authoritarian "Statists"; good intentions become naivete and idealism; government becomes an institution filled with bungling bureaucrats and "parasites." The effect is to delimit the audience's understanding of the world, confining it to a particular libertarian world-view.

After reading Hazlitt's book, I can definitely see why many of my libertarian friends say it was their "gateway drug" into libertarianism. Indeed, many of the points Hazlitt makes are reiterated almost every time I engage with them. Many of Hazlitt's figures ("inflation is the opium of the masses" comes to mind) and caricatures also have a powerful resonance with my libertarian friends.

One particular trait I noticed about my libertarian friends was their disdain--fear even--of a democratic politics (as they understood it). Democracy, they say, is simple: 51 votes you win, 49 votes you lose. What is good about that? It simply means that the majority (the idiotic rabble) get to impose their tyranny on everybody else. Hazlitt too echoes this view when he equates "political power" as a "votes," or any government intervention into the economic sphere as the result of "political manipulation."

It is no surprise then that Hazlitt and many other libertarians (at least in my experience) dismiss politics in general. We see this dismissal of politics when Hazlitt derides "justice" as a "nebulous conception." By claiming the authority of rationality and logic, Hazlitt seeks to stabilize the shifting world of appearances in an objective framework. In the end, he only sanitizes the world and glosses over the fact that, in politics, there exists a diversity of perspectives and opinions. Some questions simply can't be settled through objective or rational deduction.

Underlying the libertarian's dismissal of politics, I think, is a fear of pluralism. This fear is rooted in the belief that the political process, which is often thought to be controlled by demagogues and their irrational and hyper-emotional followers, threatens their sovereignty as autonomous individuals. On this tragic view of politics, rhetoric is dismissed as either pandering or lying, and as a result, politics is to be avoided and viewed as self-interested and irrational.

But, if I explain this to my libertarian friends, then I've fallen into Hazlitt's rhetorical trap: in the eyes of my friends I become the caricature of the naive and idealistic liberal who does not argue logically but emotionally. Or worse: the caricature of the pseudo-intellectual who argues with smart-sounding words like "intersubjective" and "plurality" in order to mask his emotional arguments with a semblance of rationality.

What do you think? Do others who are libertarians or who have had dialogue with them agree with these observations?


  1. I enjoyed your earlier precis also. I do hope some of your classmates take you up on the offer to talk over impressions and perplexities. We will be talking about Hazlitt's emphasis on the deductive and whether this is the strength he claims or rather involves him in the endless conjuration of straw-men (contributing to an interminable talking-past of one another by partisans of these antagonistic perspectives on the market imaginary). I do think it's very interesting that you describe this book as a libertopian "gateway drug" (look at all the assumptions freighting that figure, especially given Hazlitt's insistence on his superior scientificity and hardboiled commonsensicality). I strongly agree with the thrust of your point, tho' -- indeed, this book, Road to Serfdom, and Atlas Shrugged are all likely candidates for such a function. I wonder if I have picked comparable texts for economic democratizers -- sometimes I wonder if comparable texts actually really even exist (better candidates appear in the last decade or so, but earlier on the contrary perspective often seemed interred in alienating academic prose unless it was coming out of the mouths of politicians making speeches). It is extraordinary to think of the exploratory, meandering, virtuosic inventions of Lord Keynes doing duty as "gateway drugs" for comparably ignorant but interested would-be opponents of a market-libertarian perspective. Not only was Keynes a devotee of markets himself when it came down to it, but he was frankly an elitist and an aesthete little concerned with popularization (even if Economic Possibilties of the Peace was, flukishly, an early and influential economics best-seller). Lots for us to talk about, I hope.

  2. Very well written, Jon. I thoroughly enjoyed reading both editions of your precis. I found your discussion on Hazlitt's privileging of logos/deduction particularly interesting and accurate: "By claiming the authority of rationality and logic, Hazlitt seeks to stabilize the shifting world of appearances in an objective framework." Your discussion of Hazlitt's (in my opinion, obnoxious) mobilization of the logos (analytic) mode of inquiry harkens back to Aristotle's discussion of the three modes of inquiry-- analytic, dialectic, and rhetorical. In Analytic Posteriora, Aristotle delineates the contours of the three various modes of inquiry that yield knowledge. He discusses how the analytic mode-- which engages one person; is concerned with questions as to the fixed essence of something; and involves demonstration, or the logical structure of inference that is centered around sound syntactical and grammatical relationships-- is reductive and limited. Your discussion of Hazlitt's employment of the logos mode of inquiry echoes these Aristotelian sentiments. I appreciate you acknowledging in your precis the limited nature of "deduction," highlighting that "some questions simply can't be settled through objective or rational deduction." In my opinion, you accurately pinpoint Hazlitt's rhetorical mode of operation in his "Economics in One Lesson," providing us with a context and expanded horizon so that we can see that the world is not as stable or easily reducible as Hazlitt would like it to be.

    PS I don't think your argument sounds emotional at all-- if anything, quite the contrary. Your arguments are more rational than the arguments of your libertarian friends.


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