“Economics in One Lesson” – for our time

For the current debate, all of economics can be boiled down into one question: “do you want to make the public sector smaller, or bigger?”

Henry Hazlitt in Economics in One Lesson (see my post on the subject) wrote that the one lesson of economics is essentially “apply all economic measures to all people over the long term” to see if they are beneficial, and not to look at their effect on the single case. While this is probably a higher lesson than the subject of this post, I think that for the current political-economic decisions, you can make a more hard hitting point.

What size should the government sector be? As I have said before, all other economic issues are a side-show if you have not first agreed upon the size of government. And an even more hard-hitting way of asking the same question would be “how small do you want the private sector to be?”

Tax rates, health care, regulation — all are distractions. The real issue to put to the liberals is “how small do you want the private sector to be” as a percentage of the economy. And then you can decide whether or not they are socialists when they say they want the private sector to be less than 50% of the economy.

Or choose your own percentage. In my book, if they want the private sector to be less than 80% of the economy, then they are socialist.