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Publisher’s summary
A masterful introduction to the key ideas behind the successes – and failures – of free-market economics
Since 1946, Henry Hazlitt’s best-selling Economics in One Lesson has popularized the belief that economics can be boiled down to one simple lesson: market prices represent the true cost of everything. But one-lesson economics tells only half the story. It can explain why markets often work so well, but it can’t explain why they often fail so badly – or what we should do when they stumble. As Nobel Prize-winning economist Paul Samuelson quipped, “When someone preaches ‘economics in one lesson’, I advise: go back for the second lesson.” In Economics in Two Lessons, John Quiggin teaches both lessons, offering a masterful introduction to the key ideas behind the successes – and failures – of free markets.Â
Economics in Two Lessons explains why market prices often fail to reflect the full cost of our choices to society as a whole. For example, every time we drive a car, fly in a plane, or flick a light switch, we contribute to global warming. But, in the absence of a price on carbon emissions, the costs of our actions are borne by everyone else. In such cases, government action is needed to achieve better outcomes.Â
Two-lesson economics means giving up the dogmatism of laissez-faire as well as the reflexive assumption that any economic problem can be solved by government action, since the right answer often involves a mixture of market forces and government policy. But the payoff is huge: understanding how markets actually work – and what to do when they don’t.Â
Brilliantly accessible, Economics in Two Lessons unlocks the essential issues at the heart of any economic question.
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