Dan Ott holding a bottle of hot sauce.
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Economics in One Lesson—By Henry Hazlitt

My notes

The major fallacy: looking only at first order effects, and/or looking only at the effects on a particular group.

Thinking in abstractions that take away people often leads to fallacies. One such fallacy is the belief that destruction stimulates the economy.

Look at second order effects, and the impact on all groups. The only sustainable way to introduce more wealth is through productivity. Printing money for inflation means purchasing powers goes down, because the value of a dollar goes down.

We tend to think of wealth and purchasing power only as dollars in the bank. But your wealth is different than your money. Unless you are truly stuffing your money into your mattress, even the rich man is putting his money to work, creating more jobs by his intent to produce.

In software, the “quick fix” is an economic fallacy playing out. It focuses on the immediate effect of a bug being resolved, and on the special interest of one developer who does not want to spend time investing in the problem. The longer solution requires more cognitive resources, and perhaps even refactoring, but it considers the second order effect of the life of the code maintained by a team over several years.

Basically: an introduction to libertarianism.


Economics in One Lesson
Henry Hazlitt