Part one describes that economics is the one study that has more falsisms than any other. The two biggest mistakes made in economics today are that of only looking at the immediate consequences of a proposal, and only considering a certain group and neglecting all of the others. This first chapter also conveys the message that there are two different types of economists, good and bad. A good economist will see the "whole" picture. That is, the best alternative that will benefit the economy as a whole. A bad economist only sees the benefits and ignores the consequences of an action. The author, Henry Hazlitt suggests, "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." In the broadest sense, this chapter states that economics, unless better taught through examples, will remain misunderstood and the fallacies will go unchanged.
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 fact 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. .
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.
