The Wisdom of Henry Hazlitt

[Title Page and Publication Information]: This segment contains the title page and publication details for 'The Wisdom of Henry Hazlitt', a collection of essays edited by Hans F. Sennholz and published by the Foundation for Economic Education in 1993. [Table of Contents]: The beginning of the table of contents for the collection of essays by Henry Hazlitt. [Table of Contents]: The table of contents for 'The Wisdom of Henry Hazlitt', outlining the book's structure across major themes including the market order, poverty, welfare, and the history of economic thought. [Introduction by Hans F. Sennholz]: Hans F. Sennholz provides a comprehensive introduction to Henry Hazlitt's life and work. He discusses Hazlitt's role in the Foundation for Economic Education (FEE) and The Freeman, his demolition of Keynesian economics in 'The Failure of the New Economics', and his contributions to moral philosophy in 'The Foundations of Morality'. The introduction also touches on Hazlitt's later interest in Stoic philosophy and his lifelong defense of the private property order against the welfare state. [Tributes: 1. A Man for Many Seasons by Bettina Bien Greaves]: A detailed biographical tribute to Henry Hazlitt by Bettina Bien Greaves. It covers his early life in Philadelphia and Brooklyn, his self-education, and his prolific career in journalism at The Wall Street Journal and The New York Times. The essay highlights his key works, his relationship with Ludwig von Mises and F.A. Hayek, his opposition to the Bretton Woods agreement, and his development of a utilitarian basis for morality. It concludes with a bibliographical sketch of his major books. [Tributes: 2. A True Polymath by Edmund A. Opitz]: Edmund A. Opitz describes Hazlitt as a 'true polymath' whose interests spanned economics, philosophy, literary criticism, and constitutional theory. Opitz emphasizes that Hazlitt's lack of formal academic training in economics allowed him to remain a lifelong student of the field, influenced deeply by Philip Wicksteed and Ludwig von Mises. [Tributes: 3. Indefatigable Leader by Ludwig von Mises]: A transcript of remarks by Ludwig von Mises on Hazlitt's 70th birthday. Mises praises Hazlitt as a leader in the struggle for freedom, an 'economic conscience' for the nation, and a vital influence on the rising generation of defenders of liberty. [Hazlitt Responses: 4. Reflections at 70]: Hazlitt reflects on his life and career during his 70th birthday celebration. He contrasts the 'idyllic' world of his youth before WWI with the ideological struggles of the 20th century. He discusses his intellectual influences, his work in journalism, and the duty of the 'true liberal' minority to persist in advocating for liberty despite political setbacks, using George Orwell's '1984' as a metaphor for intellectual courage. [Hazlitt Responses: 5. The Art of Thinking]: Originally an epilogue to the 1969 edition of 'Thinking as a Science', this essay outlines Hazlitt's evolved views on the art of thinking. He emphasizes the social inheritance of language, the necessity of broad study before independent thought, the importance of writing for exactness, and the utility of mathematics and logic. He provides a curriculum for studying economics and other sciences, arguing that thinking is a source of human happiness. [Of The Market Order: 6. The ABC of a Market Economy]: Hazlitt explains the fundamental difference between a market economy based on voluntary cooperation and a command economy based on dictatorial orders. He defends the profit motive as a universal drive for self-improvement and explains how the market system, despite its imperfections, is self-correcting and more productive than socialism. He critiques the errors of Marx and the failures of the modern welfare state. [Of The Market Order: 7. Private Ownership: A Must]: Hazlitt argues that private property is the essential foundation for economic calculation and a functioning price system. Using examples of failure from the Soviet Union, he demonstrates that without private ownership of the means of production, 'market' reforms in communist countries remain artificial and ineffective. He concludes that decentralization cannot work without relinquishing state control of resources. [Of The Market Order: 8. Rights]: An analysis of the concept of rights, distinguishing between legal, natural, and 'pseudo-rights'. Hazlitt argues that a right for one person implies an obligation for others. He critiques modern 'rights' to things like holidays or jobs as illegitimate because they fail to specify who bears the obligation. He concludes that rights are not absolute but rest on utilitarian adherence to principles that maximize social cooperation. [Of The Market Order: 9. The Case for the Minimal State]: Hazlitt introduces the perennial problems of politics and the historical difficulty of finding a universally satisfactory form of government. This segment begins the case for a minimal state. [The Political Problem and Robert Nozick's Minimal State]: Hazlitt outlines three fundamental problems of politics regarding the extent of government power and the selection of leaders. He critiques Robert Nozick's 'Anarchy, State, and Utopia', examining how Nozick justifies the transition from anarchy to a minimal state through private protective associations. While sympathetic to the libertarian conclusion, Hazlitt expresses reservations about Nozick's argumentative style and rejection of utilitarianism. [Natural Law vs. Rule-Utilitism]: Hazlitt defends a modernized version of utilitarianism, termed 'rule-utilitism', against the 'natural law' justifications favored by Nozick and Rawls. He argues that moral rules are essential for social cooperation and that 'justice' is not a competing concept but a component of social utility. He critiques the ambiguity of natural law, noting that its proponents often fail to agree on its prescriptions and frequently rely on 'crypto-utilitist' reasoning. [Nozick's Critique of Marx and the Entitlement Theory]: Hazlitt highlights Nozick's strengths, specifically his refutation of the Marxist labor theory of value and his 'entitlement theory' of justice. Nozick argues that goods enter the world already attached to people via production or exchange, making 'patterned' redistribution a violation of rights. Hazlitt concludes that while Nozick's work contains brilliant specific arguments, its 'unfinished' and rambling nature prevents it from being a conclusive case for the minimal state. [The Sphere of Government: John Stuart Mill]: Hazlitt examines John Stuart Mill's 19th-century theories on the limits of government. While Mill advocated for laissez-faire as a general rule, he admitted numerous 'exceptions' including education, child labor laws, and poor relief. Hazlitt critiques Mill for granting too much ground to interventionism, arguing that these exceptions provided the logical opening for modern statism and the eventual erosion of economic liberty. [The Sphere of Government: Herbert Spencer]: Hazlitt analyzes Herbert Spencer's defense of the minimal state. Spencer's 'formula of justice' posits that every man is free to do as he wills provided he does not infringe on the equal freedom of others. Spencer identifies the state's sole duty as protection against aggression. Hazlitt highlights Spencer's prescient warnings about how universal suffrage and representation without taxation lead to the redistribution of wealth and the growth of bureaucracy. [How Should Prices Be Determined?]: Hazlitt explains that prices are determined by the complex interrelationships of supply, demand, and cost across all commodities. He argues against government price controls, which distort production and create shortages. He also critiques modern 'monopoly' and 'oligopoly' theories, suggesting that effective competition often exists even with few firms and that the 'monopoly price' theory is of limited practical use for regulators. [Market Prices vs. Communist Commands]: This section contrasts the efficiency of the free market price system with the failure of communist central planning. Hazlitt explains that without market prices, a bureaucracy cannot perform 'economic calculation' to allocate resources effectively. He critiques Marx's labor theory of value and 'socially necessary labor time' as fallacies that ignore the role of utility and market exchange ratios in determining value. [The Distribution of Income]: Hazlitt refutes the socialist claim that capitalism leads to an unjust distribution of wealth where the poor get poorer. Using 20th-century U.S. statistics, he demonstrates that real wages and median family incomes have risen significantly. He clarifies that corporate profits are small compared to payrolls and that technological progress has primarily benefited the masses by making luxuries into common necessities. He argues that income is not 'distributed' by a central authority but earned through production. [The Road Not Taken: Interventionism and Its Consequences]: Hazlitt reviews the history of government interventions since 1946, including the failure of the Bretton Woods monetary system, the negative effects of minimum wage laws on teen-age employment, and the distortions caused by rent control and energy price fixing. He argues that these policies create a 'political momentum' where new interventions are required to fix the problems caused by previous ones, leading the nation further away from the free market. [The Torrent of Laws]: Hazlitt deplores the excessive number of laws and regulations enacted by federal, state, and local governments. Drawing parallels to Herbert Spencer's 1854 essay on 'Overlegislation', he provides data on the thousands of new statutes passed annually and the massive growth of the Code of Federal Regulations. He details the economic costs of this 'regulatory torrent', including reduced productivity, increased consumer prices, and the erosion of individual freedom. [From Spencer’s 1884 to Orwell’s 1984]: Hazlitt revisits Herbert Spencer's 'The Man Versus the State' (1884), noting Spencer's accurate predictions regarding the growth of state coercion. He discusses how 19th-century interventions in housing and education set the stage for modern socialism. Hazlitt argues that the 'Welfare State' is a rejection of private property rights and that the function of true liberalism is to limit the power of parliaments to prevent the 'coming slavery' envisioned by Spencer and Orwell. [Planning vs. the Free Market]: Hazlitt critiques the concept of 'Economic Planning', arguing that it is essentially the substitution of a government Master Plan for the individual plans of citizens. He refutes J.K. Galbraith's thesis that the 'public sector' is starved while the 'private sector' is overstuffed, reclassifying them as the 'coercive' and 'voluntary' sectors. He also critiques 'Growth Planners' who use inflation to create the illusion of economic progress, arguing that true growth comes from free markets and sound money. [Private Property, Public Purpose]: Hazlitt argues that private property used for production is effectively public wealth because it must serve consumers to be profitable. Using Henry Ford as an example, he shows how reinvested profits benefit the public more than arbitrary redistribution would. He provides statistics on U.S. corporate profits and reinvestment to demonstrate that the majority of wealth in a capitalist system is devoted to public service through the production of goods and services. [Saving and Investment as Economic Charity]: Explores the perspective that private investment in tools of production constitutes the highest form of economic charity. By citing F.A. Harper and Hartley Withers, the text argues that when the wealthy invest rather than spend on luxuries, they increase the supply of capital for necessities, thereby lowering costs for the poor and increasing wages. [Historical Fallacies of the Gospel of Spending]: Traces the historical debate between the virtues of thrift and the 'gospel of spending.' It refutes mercantilist fallacies—later echoed by Bernard Mandeville and Captain Marryat—which claimed that extravagance benefits the poor by circulating money, noting that investment provides more sustainable benefits through reduced production costs and increased real wages. [The Keynesian Mockery of Saving]: Critiques John Maynard Keynes's opposition to saving, specifically his 'cake' analogy in 'The Economic Consequences of the Peace.' The author uses a mathematical model of 'Ruritania' to demonstrate that net saving and investment lead to cumulative growth in both capital and consumer goods, refuting Keynes's claim that saving is a 'double bluff' or a cause of unemployment. [Types of Saving: Rent-Day, Rainy-Day, and Capitalistic]: Defines saving as the excess of production over consumption and investment as the employment of that excess. It categorizes saving into three types: 'rent-day' (short-term budgeting), 'rainy-day' (precautionary), and 'capitalistic' (investment for income). The author argues that even 'hoarding' does not cause depressions if it is a regular, anticipated social practice. [Chapter 19-20: Keynesianism and Defining Poverty]: Summarizes Keynesianism as a form of inflationism and transitions into a deep analysis of how poverty is defined. It critiques the U.S. government's 'poverty line' for being arbitrary and relative. Using Rose D. Friedman's research, the author argues that official statistics often overestimate poverty by using flawed multipliers for food budgets and failing to account for family size accurately. [Chapter 21: Why Some Are Poorer]: Examines the causes of individual poverty in affluent societies. It discusses Edward Banfield's theory of 'class cultures' based on time-horizon and future-orientation. The author explores the philosophical difficulty of distinguishing between 'merit' and 'luck' but concludes that society must maintain incentives by ensuring that those who work are always better off than those who do not. [The Fallacy of Wealth Redistribution]: Critiques the demand for equalizing wealth and income. The author provides statistics showing that labor already receives the majority of corporate income and argues that forced redistribution destroys the incentives necessary for production. It specifically attacks the Guaranteed Annual Income and Negative Income Tax as schemes that undermine the necessity of self-support. [Flaws of the Negative Income Tax]: Hazlitt details the practical and political flaws of the Negative Income Tax (NIT). He argues that it invites fraud, undermines work incentives by acting as a 50 percent tax on earnings, and would inevitably expand due to political pressure until it becomes a ruinously expensive universal handout. [The Failure of Land Reform and Progressive Taxation]: This section critiques 'land reform' as an impoverishment measure that reduces agricultural efficiency and property investment. It also analyzes progressive taxation across various nations, arguing that hyper-rates are counter-productive for revenue and harm the poor by soaking up capital needed for industrial investment. [Equality and the Limits of Redistribution]: Hazlitt discusses why 'once for all' wealth redistribution cannot maintain equality due to inherent differences in human industry and thrift. He cites Soviet leader Leonid Brezhnev to emphasize that consumption depends on production, which is maximized by private property rather than economic dictatorship. [False Remedies for Poverty: Unions and Labor Laws]: Chapter 23 examines 'false remedies' for poverty, specifically focusing on how labor unions, strike threats, and restrictive labor laws (like mandatory overtime and minimum wages) actually lower real wages and increase unemployment by raising production costs and discouraging capital investment. [The Burden of the Welfare State and Price Controls]: Hazlitt argues that the proliferation of social subsidies creates a mounting tax burden that shrinks total real wealth. He explains how government deficits lead to inflation, and how subsequent attempts to control prices and wages only exacerbate economic disruption and impoverishment. [The Impossibility of Socialist Economic Calculation]: Hazlitt explains why outright socialism fails due to the lack of a price system, which is essential for economic calculation. Without private property and free markets, central planners cannot determine the most efficient methods of production or the correct proportions of goods to produce, leading to inevitable chaos and waste. [The Guaranteed Income: A Critique of Robert Theobald]: Hazlitt critiques the proposal for a guaranteed income as an 'absolute right' regardless of work. He refutes the idea that automation is permanently eliminating jobs and argues that such a scheme would create massive idleness, as the incentive to work for a marginal increase over the guarantee would vanish. [The Economic and Moral Costs of Income Guarantees]: Hazlitt explores the broader consequences of income guarantees, including the necessity of taxing the productive to support the idle. He reviews the history of the English Poor Laws to show how such subsidies tend to grow uncontrollably and concludes that the only real cure for poverty is maximizing production through capitalism. [On Appeasing Envy and the Tocqueville Theory]: Chapter 25 discusses envy as a primary driver of redistributionist policies. Hazlitt uses Tocqueville’s analysis of the French Revolution to argue that attempts to appease envy through reform often backfire, making remaining inequalities seem even more intolerable and precipitating the very revolutions they were intended to prevent. [Footnotes for The Conquest of Poverty]: Bibliographic citations for the preceding chapter, referencing works by Justice Holmes, Helmut Schoeck, Emile Faguet, and Alexis de Tocqueville regarding envy and the state of society. [The Cure for Poverty]: Hazlitt argues that poverty is an individual condition that cannot be 'abolished' but only alleviated through the capitalist system of work, saving, and production. He critiques government relief measures as 'false remedies' that reduce incentives and aggravate the disease they seek to cure, contrasting them with the 'miracles' of the free market which has historically lifted masses out of poverty. [The Story of Negro Gains]: An analysis of the economic progress of Black Americans between 1949 and 1969, showing that their real income gains were proportionally higher than those of whites. Hazlitt identifies government interventions, specifically minimum wage laws and union exclusions, as the primary causes of high Black teenage unemployment, arguing that the 'color-blind' free market is the best tool against racial discrimination. [The Ballooning Welfare State]: Traces the history of the welfare state from Bismarck's Germany to the expansion of Social Security and unemployment insurance in the U.S. and UK. Hazlitt argues that these programs, originally sold as self-supporting insurance, have transformed into massive welfare handouts that create chronic deficits, fuel inflation, and reduce the incentive to work. [Welfarism Gone Wild]: A detailed critique of the explosion in U.S. relief expenditures and the complexity of the welfare bureaucracy. Hazlitt provides examples of administrative chaos, the 'entering wedge' technique of legislative spending, and the unintended consequences of programs like Aid to Families with Dependent Children (AFDC), which he claims encourages family dissolution and fraud. [Uruguay: Welfare State Gone Wild]: A case study of Uruguay's economic decline from the 'Switzerland of Latin America' to a bankrupt state due to excessive welfare commitments. Through a series of 'snapshots' from 1956 to 1969, Hazlitt illustrates how unsustainable pensions, a bloated bureaucracy, and currency debasement led to social unrest, strikes, and political disintegration. [Foreign Investment vs. Foreign Aid]: Hazlitt contrasts the effectiveness of private foreign investment with the failures of government-to-government foreign aid. He argues that while private investment promotes productivity and mutual enrichment, foreign aid (starting with the Marshall Plan and Point Four) often subsidizes inefficient statist policies in recipient countries while burdening the donor nation's economy and undermining its currency. [The Economic and Political Failures of Foreign Aid]: Hazlitt argues that foreign aid programs are economically detrimental to the donor and fail to achieve political goals like stopping communism or gaining friends. He posits that government-to-government aid promotes socialistic planning and dependency in recipient nations, whereas the true path to development lies in attracting private investment through free-market policies and the protection of property rights. [The Unseen Costs and the Insoluble Dilemma of Aid]: This section explores the 'unseen' costs of aid, such as the loss of self-reliance in recipient nations and the distortion of economic priorities. Hazlitt describes an insoluble dilemma where aid without conditions is squandered, while aid with conditions breeds resentment; he concludes that aid ultimately subsidizes harmful socialistic policies that retard real growth. [Conditions for Progress and the Fallacy of International Relief]: Hazlitt refutes the 'vicious circle of poverty' and 'gapology' myths, citing Latin American growth rates to show that poor countries can progress without handouts. He likens foreign aid to domestic welfare, arguing both ignore the root causes of poverty and destroy incentives for production, suggesting instead that private capital is the historical and practical engine of development. [Footnotes for Foreign Aid Analysis]: Citations and references supporting the analysis of foreign aid, including works by P.T. Bauer and Hazlitt's own previous publications on the Marshall Plan and the Point Four program. [Of Truth and Vigilance: Why Anticapitalism Grows]: Hazlitt responds to ten common criticisms of capitalism raised by a correspondent. In this segment, he addresses resource depletion, price-fixing, utility rates, market concentration, capital access for small producers, corporate integrity, and the fallacies inherent in measuring productivity and Gross National Product (GNP). [The Human Nature of Capitalism and Its Flaws]: Hazlitt argues that capitalism is the most human system because it provides the greatest material abundance and allows for voluntary charity. He distinguishes true capitalism from the 'sabotaged' version currently in place, which is hampered by progressive taxation, minimum wage laws, and coercive unionism that stifle competitiveness. [Can We Keep Free Enterprise?]: Hazlitt explores why capitalism is under constant attack despite its success, attributing the hostility to five human impulses: compassion, impatience, envy, short-sightedness, and utopian idealism. He details how government interventions like progressive taxation, money printing, and price controls (including rent and interest rate controls) inevitably lead to economic discoordination and shortages. He concludes that socialism cannot solve the problem of economic calculation and that the success of capitalism ironically leads to impossible 'rising expectations' that the system can never fully satisfy. [The Task Confronting Libertarians]: Hazlitt outlines the immense challenge facing the libertarian minority in a world drifting toward socialism. He highlights the massive growth of the U.S. bureaucracy and the resulting difficulty for individuals to combat specialized government agencies. He critiques the timidity of big business leaders who fail to defend free enterprise due to their dependence on government or fear of regulatory retaliation. Hazlitt urges libertarians to specialize in specific fields, reiterate the principle that government has nothing to give that it doesn't first take, and focus on the critical issue of maintaining an honest currency through the gold standard. [The Literature of Freedom]: Hazlitt discusses the importance of the literature of freedom, noting that modern 'liberals' have abandoned the true liberal tradition of limited government for statist planning. He argues that economic liberty is inseparable from all other forms of liberty, citing both Alexander Hamilton and Leon Trotsky to illustrate that state control over subsistence is control over the will. He concludes that the intelligent conservative is today the true defender of liberty, seeking to conserve the gains of the past while carrying them forward. [Index and Foundation Information]: A comprehensive index of terms, names, and concepts found throughout 'The Wisdom of Henry Hazlitt', followed by a brief history of the Foundation for Economic Education (FEE) and a concluding quote from Hans F. Sennholz regarding Hazlitt's philosophy of happiness and human action.