Henry Hazlitt Quotes

There may have been somewhere, as a few eighteenth-century philosophers dreamed, a group of peaceful men who got together one evening after work and drew up a Social Contract to form the state. But nobody has been able to find an actual record of it. Practically all the governments whose origins are historically established were the result of conquest-of one tribe by another, one city by another, one people by another. Of course there have been constitutional conventions, but they merely changed the working rules of governments already in being.

Practically all government attempts to redistribute wealth and income tend to smother productive incentives and lead toward general impoverishment.

When personal incomes are taxed 50, 60 or 70 percent. People begin to ask themselves why they should work six, eight or nine months of the entire year for the government, and only six, four or three months for themselves and their families. If they lose the whole dollar when they lose, but can keep only a fraction of it when they win, they decide that it is foolish to take risks with their capital.

Government relief tends constantly to get out of hand. And even when it is kept within reasonable bounds it tends to reduce the incentives to work and to save both of those who receive it and of those who are forced to pay it. It may be said, in fact, that practically every measure that governments take with the ostensible object of 'helping the poor' has the long-run effect of doing the opposite.

Some champions of ever-greater governmental power and spending invent the theory that the taxpayers, left to themselves, spend the money they have earned very foolishly, on all sorts of trivialities and rubbish, and that only the bureaucrats, by first seizing it from them, will know how to spend it wisely.

Rent control, however, encourages wasteful use of space.

Government welfarism, with its ever-increasing army of pensioners and other beneficiaries, is fatally easy to launch and fatally easy to extend, but almost impossible to bring to a halt - and quite impossible politically to reverse, no matter how obvious and catastrophic its consequences become.

In order that one industry might grow or come into existence, a hundred other industries would have to shrink.

Here we shall have to say simply that all government expenditures must eventually be paid out of the proceeds of taxation; that inflation itself is merely a form, and a particularly vicious form, of taxation.

Liberty is the essential basis, the sine qua non, of morality.

If precious metals had been abundant, they would not have been precious.

Arbitrary government power is being multiplied daily by the now practically unchallenged assumption that wherever there is any problem of any kind to be solved, government is the agency to step in and solve it.

Everything we get, outside of the free gifts of nature, must in some way be paid for. The world is full of so- called economists who in turn are full of schemes for getting something for nothing. They tell us that the government can spend and spend without taxing at all; that it can continue to pile up debt without ever paying it off, because we owe it to ourselves.

Socialists will often talk as if some form of superbly equalized destitution were preferable to "maldistributed" plenty. A national income that is rapidly growing in absolute terms for practically everyone will be deplored because it is making the rich richer.

If we try to run the economy for the benefit of a single group or class, we shall injure or destroy all groups, including the members of the very class for whose benefit we have been trying to run it. We must run the economy for everybody

For every dollar that is spent on the (boondoggle) bridge a dollar will be taken away from taxpayers. If the bridge costs $1,000,000 the taxpayers will lose $1,000, 000. They will have that much taken away from them which they would otherwise have spent on the things they needed most.

A man will put forth greater efforts to save himself from ruin than he will merely to improve his position.

Private loans will utilize existing resources and capital far better than government loans. Government loans will waste far more capital and resources than private loans. Government loans, in short, as compared with private loans, will reduce production, not increase it.

Reasonable taxes for this purpose need not hurt production much. The kind of government services then supplied in return, which among other things safeguard production itself, more than compensate for this. But the larger the percentage of the national income taken by taxes the greater the deterrent to private production and employment.

To think at all requires a purpose, no matter how vague. The best thinking, however, requires a definite purpose, and the more definite this purpose the more definite will be our thinking. Therefore in taking up any special line of thought, we must first find just what our end or purpose is, and thus get clearly in mind what our problems are.

Much of the success of our thinking will depend upon just how we divide our big problems into subsidiary problems, and just what our subsidiary or subordinate problems are.

disorganized. The progress of civilization has meant the reduction of employment, not its increase. It is because we have become increasingly wealthy as a nation that we have been able virtually to eliminate child labor, to remove the necessity of work for many of the aged and to make it unnecessary for millions of women to take jobs. A much smaller proportion of the American population needs to work than that, say, of China or of Russia. The real question is not how many millions of jobs there will be in America ten years from now, but how much shall we produce, and what, in consequence, will be our standard of living? The problem of distribution, on which all the stress is being put today, is after all more easily solved the more there is to distribute. We

Government provided free tuition tends more and more to produce a uniform conformist education, with college faculties ultimately dependent for their jobs on the government, and so developing an economic interest in profession and teaching a statist, pro-government, and socialist ideology.

The vital consideration of incentives is almost systematically overlooked in the proposals of agitators for more and bigger government welfare schemes. We should all be concerned about the plight of the poor and unfortunate. But the hard two-part question that any plan for relieving poverty must answer is: How can we mitigate the penalties of failure and misfortune without undermining the incentives to effort and success.

The bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.

Eternal vigilance is the price of an open mind.

Taxation for public housing destroys as many jobs in other lines as it creates in housing.

Government-to-government aid rests on socialistic assumptions and promotes socialism and stagnation, whereas private foreign investment rest on capitalist assumptions and promotes private enterprise and maximum economic growth.

All subsidy measures, all schemes to redistribute income or to force Peter to support Paul, are one-eyed as well as shortsighted. They get their immediate appeal by focusing attention on the alleged needs of some particular group of intended beneficiaries. But the inevitable victims - those who are going to be asked to pay for the new handout in increased taxes (which directly or indirectly means almost everybody else) - are left out of account. Only one-half of the problem has been seen. The cost of the proposed solution has been overlooked.

Economic progress and justice do not consist in superbly equalized destitution, but in the constant creation of more and more goods and services, of more and more wealth and income to be shared.

When each of us is free to work out his own economic destiny, within the framework of the market economy, the institution of private property, and the general rule of law, we will all improve our economic condition much faster than when we are ordered around by bureaucrats.

Up to a certain point it is necessary to produce shoes. But it is also necessary to produce coats, shirts, trousers, homes, plows, shovels, factories, bridges, milk and bread. It would be idiotic to go on piling up mountains of surplus shoes, simply because we could do it, while hundreds of more urgent needs went unfilled.

I have spoken of analogy as a constructive method. This, however, should be used only for suggestion, for it is most dangerous. Often we use an analogy and are quite unaware of it. Thus many social and political thinkers have called society an "organism," and have proceeded to deal with it as if it were a large animal. They have thought not in terms of the actual phenomena under consideration, but in terms of the analogy. In so far as the terms of the analogy were more concrete than those of the phenomena, their thinking has been made easier. But no analogy will ever hold good throughout, and consequently these thinkers have often fallen into error.

The "virtue" of Keynes's teaching is that it praised thriftlessness, reckless spending, and unbalanced budgets and was therefore extremely palatable to the politicians in power.

Multiculturalism means your kid has to learn some wretched tribal dirge for the school holiday concert instead of getting to sing 'Rudolph the Red-Nosed Reindeer.'

The quickest way to detect error in analogy is to carry it out as far as it will go - and further. Every analogy will break down somewhere. Any analogy if carried out far enough becomes absurd.

The first requisite of a sound monetary system is that it put the least possible power over the quantity or quality of money in the hands of the politicians.

Would-be income guarantors ignore or despise the capitalistic system that makes their dreams dreamable and gives their redistribute-the-income proposals whatever plausibility they have.

Short-sighted and impatient efforts to wipe out poverty by severing the connection between effort and reward can only lead to the growth of a totalitarian state, and destroy the economic progress that this country has so dearly bought.

In a free enterprise system, with an honest and stable money, there is dominantly a close link between effort and productivity, on the one hand, and economic reward on the other. Inflation severs this link. Reward comes to depend less and less on effort and production, and more and more on successful gambling and luck.

Bureaucrats denounce private enterprise for the consequences of their own reckless policies and demand still more governmental controls.

Relief, or redistribution of income, voluntary or coerced, is never the true solution of poverty, but at best a makeshift, which may mask the disease and mitigate the pain, but provides no basic cure.

There is no limit to the amount of work to be done as long as any human need or wish that work could fill remains unsatisfied.

If there is to be no loss whatever of dignity or self-respect in getting and staying on relief, then there can be no gain in dignity or self-respect in makings some sacrifices to keep off.

the real causes of any existing depression. For the real causes, most of the time, are maladjustments within the wage-cost-price structure: maladjustments between wages and prices, between prices of raw materials and prices of finished goods, or between one price and another or one wage and another.

The solution to our problems is not more paternalism, laws, decrees, and controls, but the restoration of liberty and free enterprise, the restoration of incentives, to let loose the tremendous constructive energies of 300 million Americans.

The envious are more likely to be mollified by seeing others deprived of some advantage than by gaining it for themselves. It is not what they lack that chiefly troubles them, but what others have.

Capitalism will continue to eliminate mass poverty in more and more places and to an increasingly marked extent if it is merely permitted to do so.

Many of the most frequent fallacies in economic reasoning come from the propensity, especially marked today, to think in terms of an abstraction - the collectivity, the "nation" - and to forget or ignore the individuals who make it up and give it meaning.

When any welfare scheme is being proposed, its political sponsors always dwell on what a generous and compassionate government should pay to Paul; they neglect to mention that this additional money must be seized from Peter.

The same reasoning applies to civilian government officials whenever they are retained in excessive numbers and do not perform services for the community reasonably equivalent to the remuneration they receive.

For as Alexander Hamilton pointed out in the Federalist Papers nearly two centuries ago, A power over a man's subsistence amounts to a power over his will.

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.

What inflation really does is to change the relationships of prices and costs.

all government expenditures must eventually be paid out of the proceeds of taxation; that inflation itself is merely a form, and a particularly vicious form, of taxation. Having

Contrary to age-old prejudices, the wealth of the rich is not the cause of the poverty of the poor, but helps to alleviate that poverty.

The sad fact is that today most of the heads of big businesses in America have become so confused or intimidated that, so far from carrying the free market to argument to the enemy, they fail to defend themselves adequately even when attacked.

Contrary to a popular impression, profits are achieved not by raising prices, but by introducing economies and efficiencies that cut costs of production.

Everywhere the means is erected into the end, and the end itself is forgotten.

The whole gospel of Karl Marx can be summed up in a single sentence: Hate the man who is better off than you are. Never under any circumstances admit that his success may be due to his own efforts, to the productive contribution he has made to the whole community. Always attribute his success to the exploitation, the cheating, the more or less open robbery of others. Never under any circumstances admit that your own failure may be owing to your own weakness, or that the failure of anyone else may be due to his own defects - his laziness, incompetence, improvidence, or stupidity.

A vital function of the free market is to penalize inefficiency and misjudgment and to reward efficiency and good judgment. By distorting economic calculations and creating illusory profits, inflation will destroy this function.

Just as there is no technical improvement that would not hurt someone, so there is no change in public taste or morals, even for the better, that would not hurt someone.

Necessary policemen, firemen, street cleaners, health officers, judges, legislators and executives perform productive services as important as those of anyone in private industry. They make it possible for private industry to function in an atmosphere of law, order, freedom and peace. But their justification consists in the utility of their services. It does not consist in the "purchasing power" they possess by virtue of being on the public payroll.

Ither immediately or ultimately every dollar of government spending must be raised through a dollar of taxation. Once we look at the matter. In this way, the supposed miracles of government spending will appear in another light.

Libertarians are learning to their sorrow that big businessmen cannot necessarily be relied upon to be their allies in the battle against extension of governmental encroachments.

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.

Competition always tends to bring about the most economical and efficient method of production. Those who are most successful in this competition will acquire more capital to increase their production still further; those who are least successful will be forced out of the field. So capitalist production tends constantly to be drawn into the hands of the most efficient.

For every alleged benefit that the politicians confer upon us, they must necessarily deprive us of something else.

Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine - the special pleading of selfish interests.

It should be immediately clear that this could be brought about more directly and honestly by a reduction in unworkable wage rates. But the more sophisticated proponents of inflation believe that this is now politically impossible. Sometimes they go further, and charge that all proposals under any circumstances to reduce particular wage rates directly in order to reduce unemployment are "antilabor." But what they are themselves proposing, stated in bald terms, is to deceive labor by reducing real wage rates (that is, wage rates in terms of purchasing power) through an increase in prices.

The long-run historical tendency of capitalism has not only been to increase real incomes more or less proportionately nearly all along the line, but to benefit the masses even more than the rich.

Nothing is easier to achieve than full employment, once it is divorced from the goal of full production and taken as an end in itself

The way to get a maximum rate of 'economic growth' assuming this to be our aim - is to give maximum encouragement to production, employment, saving, and investment. And the way to do this is to maintain a free market and a sound currency.

There are men regarded today as brilliant economists, who deprecate saving and recommend squandering on a national scale as the way of economic salvation; and when anyone points to what the consequences of these policies will be in the long run, they reply flippantly, as might the prodigal son of a warning father: "In the long run we are all dead." And such shallow wisecracks pass as devastating epigrams and the ripest wisdom.

The capitalist system has lifted mankind out of mass poverty. It is this system that in the last century, in the last generation, even in the last decade, has acceleratively been changing the face of the world, and has provided the masses of mankind with amenities that even kings did not possess or imagine a few generations ago.

One occupation can expand only at the expense of all other occupations.

The ideas which now pass for brilliant innovations and advances are in fact mere revivals of ancient errors, and a further proof of the dictum that those who are ignorant of the past are condemned to repeat it.

The real solution to the problem of poverty consists in finding how to increase the employment and earning power of the poor.

The consequences of inflation are malinvestment, waste, a wanton redistribution of wealth and income, the growth of speculation and gambling, immorality and corruption, disillusionment, social resentment, discontent, upheaval and riots, bankruptcy, increased government controls, and eventual collapse.

What a commodity has cost to produce in the past cannot determine its value. That will depend on the present relationship of supply and demand.

The mounting burden of taxation not only undermines individual incentives to increased work and earnings, but in a score of ways discourages capital accumulation and distorts, unbalances, and shrinks production. Total real wealth and income is made smaller than it would otherwise be. On net balance there is more poverty rather than less.

There is a profound contrast between the effects of foreign aid and of voluntary private investment: foreign aid goes from government to government. It is therefore almost inevitably statist and socialistic.

The idea that an expanding economy implies that all industries must be simultaneously expanding is a profound error.

The government has nothing to give to anybody that it doesn't first take from someone else.

But as almost all objects differ in some qualities and almost all have some qualities in common, it follows that, contrary to common belief, there is no one classification absolutely essential to any group of objects.
An infinite number of classifications may be made, because every object has an infinite number of attributes, depending on the aspect we take of it. Nor is any one aspect of a thing "truer" than any other. The aspect we take depends entirely on the purpose we have in mind or the problem we wish to solve.

They tell us how much better off economically we all are in war than in peace.

The typical political ploy was to load up benefits in the present and push costs into the future. Yet that future always arrived;

For it is the very commodities selected for maximum price-fixing that the regulators most want to keep in abundant supply. But when they limit the wages and the profits of those who make these commodities, without also limiting the wages and profits of those who make luxuries or semiluxuries, they discourage the production of the price-controlled necessities while they relatively stimulate the production of less essential goods.

The monetary managers are fond of telling us that they have substituted 'responsible money management' for the gold standard. But there is no historic record of responsible paper money management ... The record taken, as a whole is one of hyperinflation, devaluation and monetary chaos.

The government never lends or gives anything to business that it does not take away from business.

The quickest and surest way to production, prosperity, and economic growth is through private enterprise. The best way for governments to encourage private enterprise is to establish justice, to enforce contracts, to insure domestic peace and tranquility, to protect private property, and to secure the blessings of liberty including economic liberty - which means to stop putting obstacles in the way of private enterprise.

The State, of course, is absolutely indispensable to the preservation of law and order, and the promotion of peace and social cooperation. What is unnecessary and evil, what abridges the liberty and threatens the true welfare of the individual, is the State that has usurped excessive powers and grown beyond its legitimate function - the super-State, the socialist State, the redistributive State, in brief, the ironically misnamed 'Welfare State.'

The larger the percentage of the national income taken by taxes the greater the deterrent to private production and employment. When the total tax burden grows beyond a bearable size, the problem of devising taxes that will not discourage and disrupt production becomes insoluble.

While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.

Diluting the money supply with paper is the moral equivalent of diluting the milk supply with water.

The analysis of our illustrations has taught us another incidental lesson. This is that, when we study the effects of various proposals, not merely on special groups in the short run, but on all groups in the long run, the conclusions we arrive at usually correspond with those of unsophisticated common sense. It would not occur to anyone unacquainted with the prevailing economic half-literacy that it is good to have windows broken and cities destroyed; that it is anything but waste to create needless public projects; that it is dangerous to let idle hordes of men return to work; that machines which increase the production of wealth and economize human effort are to be dreaded; that obstructions to free production and free consumption increase wealth; that a nation grows richer by forcing other nations to take its goods for less than they cost to produce; that saving is stupid or wicked and that squandering brings prosperity.

The most frequent fallacy by far today, the fallacy that emerges again and again in nearly every conversation that touches on economic affairs, the error of a thousand political speeches, the central sophism of the "new" economics, is to concentrate on the short-run effects of policies on special groups and to ignore or belittle the long-run effects on the community as a whole.

The best prices are not the highest prices, but the prices that encourage the largest volume of production and the largest volume of sales. The best wage rates for labor are not the highest wage rates, but the wage rates that permit full production, full employment and the largest sustained payrolls. The best profits, from the standpoint not only of industry but of labor, are not the lowest profits, but the profits that encourage most people to become employers or to provide more employment than before.

The notion that we can dismiss the views of all previous thinkers surely leaves no basis for the hope that our own work will prove of any value to others.

The essential function of the State is to maintain peace, justice, law, and order, and to protect the individual citizen against aggression, violence, theft, and fraud.