Hazlitt Mini-Paper

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Recommended: Effects of increasing the minimum wage

Henry Hazlitt’s book, Economics in One Lesson, surfaces many arguments. Four of the main arguments have to do with opportunity cost, long term versus short term, rent and price control, and minimum wage.
Hazlitt first looks at the problem of long term versus short term . It basically states that if we were to focus on what we could get the most of what is happening right now (the short term) we will fail in the long term. One of the big differences, in economics, between short term and long term, is that economists can plan for the long term. Education is a great example of explaining the difference. One of the long term positives of education is that it will help me get a better job. Considering that Indiana Wesleyan University’s combined tuition and room /board exceeds $30,000, I am paying for it now so that my education will benefit me in the long term because I know that with my education and the more education I receive (Master’s and/or Ph.D.) will help me find the best job possible which will help me pay for living expenses. In economics, the long term is what the market ends up being whereas the short term has to do more with the immediate effects. Another example of the difference between short term and long term is say that I start a sports marketing business. Long term goals are always better than short term goals. One of my long term goals could be that I would like one-hundred clients at the end of my fifth year in business. The more clients I have, the more money I will bring in. The best quote from Hazlitt’s section on the short term versus long term argument is that “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 tra...

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... minimum wage is a good thing only if the bad is controlled. Hazlitt is saying that the worker is only worth the difference between the set minimum wage and what they are getting paid. For example, I have just started a job at McDonalds where the minimum wage is $7.25 but my start out pay is $7.75. This means I am worth 50 cents an hour to my employer. The way that minimum wage can get bad is that, for example, the minimum wage at McDonalds rises to $15 but the market won’t pay for $15 because this means the goods cost more. McDonalds could be using the increased minimum wage to their advantage. If the McDonalds does not have enough labor, in order for labor demand to go up they could raise the minimum wage which would attract more people to be interested in working there. Labor is an essential part to the economy because without labor there is no business.

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