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Tuesday, February 8, 2011

The Economic Conscience of Our Country

Henry Hazlitt is responsible for some of the best books on freedom and economics in the 20th century. There are many who can rightly claim they got their start by reading his Economics in One Lesson. While Keynesian ideas ran rampant among the masses, with his book The Failure of the “New Economics” Henry Hazlitt repudiated nearly line-by-line Keynes’s General-Theory-Employment-Interest-Money.
Furthermore, Hazlitt’s The Foundations of Morality, was a major work on the ethical foundations of capitalism. These, and many more books and articles Hazlitt wrote in his long life, are just a part of the reason that on his 70th birthday, Ludwig von Mises proclaimed,

“In this age of the great struggle in favor of freedom and the social system in which men can live as free men, you are our leader. You have indefatigably fought against the step-by-step advance of the powers anxious to destroy everything that human civilization has created over a long period of centuries…. You are the economic conscience of our country and of our nation.”

Henry Hazlitt spent his career in journalism promoting the works of the Austrian School of economics. What separated Hazlitt from the rest, and lead Mises to call him our leader, was his understanding of economics. Although he had not been an economist by training or profession, his work proved he understood the economic concepts better than many with doctorate degrees. Through his work in journalism and organizations like the Foundation for Economic Education and the Mont Pelerin Society he was able to spread the ideas of liberty and economics to audiences that would not dare to pick up professional journals or technical tomes, like Human Action.

Today’s document, a letter from the Canton Supply Company to Hazlitt on April 17, 1951, illustrates how Henry Hazlitt spread important ideas of liberty through his work. The letter is a piece of fan mail praising Hazlitt for his book The Great Idea, which was republished later as Time Will Run Back. This book is a distinctive and often forgotten work by Hazlitt. It is different because in the form of a fictional novelit attempts to illustrate the knowledge problems associated with socialism. While few may find the tale of dystopia where an ignorant young man inherits the role of dictator of a world communist system to be classic literature, it is nevertheless a brilliant economic step-by-step reasoning from the failure of communism back to the success of a purely free market.

Henry Hazlitt’s book explains why socialism as a means is impossible for achieving the desired ends of an advanced material society. The idea that socialism fails to connect the means with the desired ends come from Mises’s Economic Calculation in the Socialist Commonwealth and Hayek’s The Use of Knowledge in Society.” While in debates on the merits of socialism college students commonly respond “but socialism is perfect in theory,” Mises and Hayek illustrate why this socialism is complete nonsense even in theory. Sadly, Mises and Hayek were not known to be good communicators. Hazlitt, on the other hand, was a skilled, clear, and entertaining writer. He may be gone, but because his work lives on he is, in many ways, still our leader.

Download the Canton Supply Company to Hazlitt letter of April 17, 1951 here.

  • Nicholas Snow is a Visiting Assistant Professor at Kenyon College in the Department of Economics, and previously a Senior Lecturer at The Ohio State University Economics Department. His research focuses on the political economy of prohibition.