An example of the problems that economists face is illustrated in chapter two. When money is spent in one place, it does not mean that the whole economy will benefit from it. There is always the f

The progress we have made in our country has not, as one would assume, raise employment levels, but in fact, the technological advances have reduced employment. Less fortunate countries rely on all of their citizens; young, old, and everyone in between to perform the jobs that machines would normally do. In the United States, the new machines and technology have eliminated child labor, and have reduced the need for elderly to work. The idea that full employment is the key to a good economy is not always true.

act that money could have been spent somewhere else. The group that didn’t receive the money looses out. Chapter three goes on to point out that just as a small destruction did not cause more business, just diverted the funds, so to will large scale destructions such as war not bring about economic prosperity. It is true that wars destroy many things that need to be rebuilt, and it also increases demand on certain products, but the money has to be there to replace these losses.

In chapter fourteen, Hazlitt discuses the problems with tariffs, subsidies, and higher prices given to an industry. The idea is that if, as the book calls it, industry X is saved by implementing these three recovery tools, that it will benefit everyone in the economy. By saving industry X they will be able to give more business to others, creating a wave that will build the economy. The fact of the matter is that industry X needs this help because they were not running their business well. If we use government funds to rescue these industries, we may very well be hurting the economy.

Chapter four discusses the supposed “miracle" of government spending. Many people see this as “free money”. They think that the government can supply its own money to fund their projects. Many of these projects are necessities that are paid for by our tax dollars, but instead of just solving the basic problem that these projects are created for, people want more. Instead of building a simple bridge, that does the job of carrying vehicles across, people want an aesthetically pleasing bridge that will stand out. The government builds this bridge, but its consequences reflect back to you. Instead of putting the money into other government spending, it was used to make a more grandeur bridge. Another example is the building of low-income housing. The money that the government spends to build these is taken away from higher income individuals. They in turn can not spend as much in the economy. The point of this chapter is that all money comes from somewhere.

Industries can easily deal with an individual’s wage demands. When one person is lost because they are not believed to be worth their demand, it is not a big loss. When unions get involved, it is a different story. Unions support employ’s rights. When one union member wants a pay increase, they all get that increase. These pay increases seem fair at the time and are believed to be helping the economy, but actually they are hurting it. Like minimum wages, union wage increases take money away from companies and therefore cause their consumer prices to rise. This also hurts the wages of non-unionized workers. The more they have to pay union workers, the less they can pay others. Chapters nineteen and twenty ill

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