Economic Opportunity

Henry Hazlitt and the Art of Economics

November 28, 2016

Journalist Henry Hazlitt popularized the ideas of Austrian economics and was a co-founder of the Foundation for Economic Education.

Henry Hazlitt (1894-1993) was a well-known journalist and economics writer for publications such as The Wall Street Journal, The Nation, and The New York Times. He popularized the ideas of Austrian economics and was a co-founder of the Foundation for Economic Education. He is still widely cited for his writings on free markets, especially his best-selling book Economics in One Lesson.

Growing up, Hazlitt endured a difficult family and financial situation. After his father passed away when he was a baby, Hazlitt grew up in poverty, and spent several years at Girard College, “a school in Philadelphia for poor, fatherless boys.” His family’s financial situation temporarily improved after his mother remarried, but his stepfather, who was an alcoholic, died when Hazlitt was 13.

Hazlitt’s economic perspective was impacted by an experience he had with his uncle during a summer vacation. Hazlitt’s uncle was an electrician who worked at an amusement park for a show called “The Galveston Flood”; he was in charge of the electrical effects that simulated the disaster. His uncle hoped that Fourth of July would bring in crowds to see the show, but it rained all day. According to Hazlitt in his essay My Life and Conclusions,

This, except for my stepfather’s business, was my first close up experience of the fate of an entrepreneur. His investment was wiped out. I was about fourteen at the time. The experience prevented me in later life from ever embracing the widespread popular assumption that owners, employers, “capitalists,” invariably made money from their investments and could always afford to pay higher wages than they actually did.

To save money, Hazlitt gave up his dream of attending Harvard University and instead attended New York’s City College. However, his time at City College was cut short because he needed to financially support his mother. A talented writer but an inexperienced high school graduate, Hazlitt held a variety of low-paying, short-term jobs until he was hired on as a secretary to the managing editor at The Wall Street Journal. This position, unlike earlier jobs he held, paid $12 a week instead of $5. As Hazlitt would later write about his early career path, “Two things about this will probably astonish the present-day reader. The first is the low pay prevailing at that period; the second the freedom of the market.”

Hazlitt did not remain a secretary long, and he would go on to write in some of the most important publications of his day, including the Journal, The Nation, The American Mercury, The Century, The Freeman, and The New York Times—for which he frequently wrote book reviews. Hazlitt was a talented writer, but his opposition to government intervention in the economy was sometimes at odds with the editorial views of prestigious publications. For example, he lost his position at The Nation after he critiqued the New Deal and from The New York Times after he warned readers about the risk of global inflation due to John Maynard Keynes’ World War II economic reconstruction plan.

After leaving The New York Times, Hazlitt wrote what would become his most famous publication, Economics in One Lesson. He referred to this book as a “modernization, extension, and generalization” of Frédéric Bastiat’s essay about opportunity costs. In the first portion of the book, Hazlitt neatly summarizes his one necessary economic lesson: “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.”

In the Charles Koch Institute’s offices, we have named our classrooms and conference rooms after men and women who contributed to advancing an understanding of how free and open societies lead to well-being for all. Henry Hazlitt is one of these individuals, and the conference room that bears his name also displays an etching of this quote:

The times call for courage. The times call for hard work. But if the demands are high, it is because the stakes are even higher. They are nothing less than the future of human liberty, which means the future of civilization.

This physical reminder connects us to Hazlitt as we work to continue his legacy of improving well-being for all. Hazlitt fearlessly promoted his belief in the role of free markets and their positive impact on society, even when it meant giving up lucrative and prestigious opportunities.