Today’s crop of central planners and big spending politicians could learn a thing or two about economics from Henry Hazlitt’s classic bestseller, Economics in One Lesson, published in 1946. Common sense doesn’t have an expiration date.
“There is no more persistent and influential faith in the world today than faith in government spending,” Hazlitt wrote. “Everywhere government spending is presented as a panacea for all our economic ills. Is private industry partially stagnant? We can fix it all by government spending. Is there unemployment? That is obviously due to ‘insufficient private purchasing power.’ The remedy is just as obvious. All that is necessary is for the government to spend enough to make up the ‘deficiency.’”
With “public works” viewed primarily as a means of “providing employment,” explained Hazlitt, an endless array of projects will be “invented” by the government. The “usefulness” of the final product or the likeliness of success of a project, whether it’s a bridge to nowhere or a bankrupt solar panel company, “inevitably becomes a subordinate consideration.”
In fact, once creating jobs is viewed as the chief purpose of government spending, said Hazlitt, a project with more waste and more inefficiency in its implementation, and less labor productivity, will be viewed as superior to a less wasteful project.
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Professor Ralph R. Reiland (photo)