Interview with Henry Hazlitt
The author of Economics in One Lesson looks back on an illustrious career as a writer and editor
If any one person can be said to have kept the idea of economic freedom alive in this century, it is surely Henry Hazlitt. Through the Great Depression and then 30 years of Keynesian interventionism, and continuing to the present, he has tenaciously explained and defended the free-market economy.
He is an unlikely player for the part. Born on November 28, 1894, Hazlitt in his youth wanted to take up philosophy and psychology but had to quit college to earn a living. Eventually deciding that he wanted to be a newspaperman, he started out at the Wall Street Journal—as a stenographer; and with, as he recounts, almost no awareness of things economic.
He would go on, in 1946, to write a classic popular critique of government intervention in people's economic lives. Economics in One Lesson remains today one of the most succinct, readable discussions of economic reality available.
But Hazlitt was also instrumental in putting before the American public the work of two masters of the Austrian School of economics. His prominent reviews of Socialism by Ludwig von Mises and The Road to Serfdom by F.A. Hayek launched those works in America.
After working as writer or editor for a number of publications, in 1934 Hazlitt joined the New York Times, where he wrote most of that paper's economic editorials until 1946. For the next 20 years he penned freedom-minded essays as a regular Newsweek columnist.
In addition to Economics in One Lesson (revised and reissued in 1979), Hazlitt has written a steady stream of books, starting with Thinking as a Science in 1916 and ranging from The Anatomy of Criticism to The Failure of the "New Economics."
In anticipation of bringing REASON readers an interview with Henry Hazlitt on the occasion of his 90th birthday, Editor-in-Chief Marty Zupan talked with him at his home in Connecticut last spring.
REASON: In the 40 years since Economics in One Lesson was first published, do you think people have gotten any better at seeing the long-term consequences of such government intervention as rent control?
HAZLITT: I don't know. Individuals understand. I still get letters very often from people who've just discovered Economics in One Lesson. I just received one from a youngster of 19, who says that he has just read this and it opened his eyes.
REASON: Yes. A man I talked to the other day said, "I was a raving socialist until I read that."
HAZLITT: I think one of the merits of the book, if I may say, is that at the time I wrote it, I wrote it as a sort of lark. I said, "I have an idea for a book on why all these interventions, all these economic interventions, go sour, and I think I'll try that." And when I wrote it, my feelings were not as intense on these things as they are now. I just treated it good-naturedly, and I think this helped persuade people. I wasn't hammering at the reader.
REASON: How did you come to your free-market views?
HAZLITT: Well, these go pretty far back. When I was 19, I had a very great interest in philosophy, and particularly in Herbert Spencer. He was constantly writing books, of course, denouncing government intervention, and so that message was deeply impressed on me.
REASON: So you did not start out as a socialist, like many of…
HAZLITT: Oh, yes. I meant to say—the funny part of it is, even after I had read Herbert Spencer, at somewhere around the age of 20, under the influence of Bernard Shaw, I wrote a paper which must be still extant somewhere arguing for equality of income. I felt that was the only fair thing, although I don't remember arguing that the government should enforce equality. I just thought it was the only equitable system.
But I think I was still in high school when I first started reading Spencer. I also had great admiration for William James, and my ambition then was to go to Harvard and study psychology and be a psychologist like William James, and a philosopher, and so on. But because of my family's financial situation, I had to give up my idea. I went to City College, but after a few months I transferred to the night school, and after about a year and a half or so, I even had to give that up and get a job. So my economic education was from reading.
But anyway, what happened when I started out to get a job, I remember I had no skills whatever. So I would get a job, and I would last two or three days and be fired. It never surprised me nor upset me, because I read the Times early in the morning, went through the ads, and I'd practically have a job that day. This shows what happens when you have a free market. There was no such thing as a minimum wage at that time. There was no such thing as relief, except maybe there were places where you could get a soup handout or something, but there was no systematic welfare. You had a free market. And so I usually found myself at a job the next day, and I'd get fired about three or four days after that.
REASON: Because they found that you weren't worth it because you didn't have the skills?
HAZLITT: That's right. I didn't have the skills. But each time I kept learning something, and finally I was getting about $3 or $4 a week. But I was in an office where there was a typist who was getting $15 a week, and I decided that's where the money is. So I managed to take a night course at a school in stenography and typing. I never finished that course, either, but I applied for jobs as a typist. And of course I'd get fired, because I was incompetent.
At some point I decided that I wanted to be a newspaperman, because it was the only way I could see to get into writing. I always wanted to write. In fact, I was writing a book then, when I was 19 and 20, Thinking as a Science. The only place I could find to get in was the Wall Street Journal, because the managing editor wanted a stenographer.
REASON: So you started at the Wall Street Journal as a stenographer?
HAZLITT: Yes. And there was a fellow who started to tell me about what a job on the Wall Street Journal would be like. He said, "You will be a reporter, and then you will become interested in how to analyze a railroad report." And I thought quietly to myself, "The hell I will," because nothing seemed duller to me. I never thought like that. I wanted to be a psychologist. I wasn't interested in any economic questions. I almost didn't even know there was such a thing as the science of economics. But after I was there, I found that everybody else was picking it up faster than I was, and I discovered that there was a study called economics. So I began to pick up economics books.
I wanted to find out what were the leading textbooks in the colleges, and I read those. And then I was rummaging in the library and came across a book by Philip Wicksteed. And that became my bible. It was beautifully written and beautifully thought out. Wicksteed was a disciple of [English economist William] Jevons, who had introduced Austrian economics, or practically coinvented Austrian economics. I don't know how I was able to spot how good this was, but it became my bible. Of course, it wasn't until much later that I knew anything about the Austrians, and much later still, of course, when I met Ludwig von Mises.
REASON: So how did you move, at the Wall Street Journal, from stenographer to reporting?
HAZLITT: After a couple of years I got a job as a proofreader. I held that job for about three months, until I suddenly recognized something—that if I did a perfect job nobody ever heard about me or knew me, but if I made a blunder they immediately knew about it. So, I said, "This is not the kind of job to hold!" I pleaded to be taken off that job, and then I was made a reporter.
REASON: How did you come to be literary editor of the New York Sun?
HAZLITT: That was purely an accident. I was writing editorials for the Sun, mainly economic, financial editorials, when they asked me to fill in for the book editor and eventually asked me to actually be the book editor.
REASON: Did you maintain your interest in economics?
HAZLITT: Oh, yes, because I would review economic books, and so forth. And then what happened was that the Nation wanted to get a book editor. The Nation was pretty much a leftist magazine then, as it has always remained. But they took me on, and one of the reasons they took me on was that they wanted me not only to write and handle the book reviews but to be able to write editorials on economic subjects.
REASON: Did you have any solidified economic views at that time?
HAZLITT: My economics were pretty conservative, but apparently the people at the Nation respected them as being objective and acceptable.
REASON: Did it bother you working there?
HAZLITT: No. It never troubled me at all, because it never troubled them. You know, it's a very interesting thing, later on…You see, the New York Times, when I was writing for it [1934–46], was not the very liberal paper that it's become now. And they let me write this whole series of editorials that's just been published as a book, From Bretton Woods to World Inflation. The editorials appeared from 1944 to '45, when the Bretton Woods system was being devised. [At Bretton Woods, New Hampshire, in July 1944, under the leadership of British economist John Maynard Keynes, 45 nations drafted an agreement to establish a new international monetary system no longer based on the gold standard.]
By the way, I never met Keynes. When I was on the Nation, they invited Keynes to lunch. But on the day he was to come I came down with a cold, so I never met him. And then when the Bretton Woods conference was going on, the Times asked me repeatedly whether I wanted to go up to Bretton Woods and write my editorials from there, but I said, "No, I don't. I don't want to meet Keynes, and I don't want to get involved with him or to have knowing him hamper my comments. I'd like to write what I think, and I don't need to meet anybody to do that." And I kept writing, of course, that this was going to induce inflation when they abandoned the gold standard. And they let me do it—I'm talking about Arthur Sulzberger, who was running the paper then. He was uncomfortable, but he respected my objectivity, so he let the editorials run.
Then one day the Bretton Woods pact was signed, and he called me in and said, "Now, look, Henry, I've let you write these editorials. But now that 43 nations have signed this, we can't continue to oppose it. We just can't continue to oppose it." I said, "Well, all right, Mr. Sulzberger, if you want it that way. But I can't write any more pieces about it, because I think it's going to do immense harm, and I can't turn around and say it's a good thing. So that's all. I can't write any further editorials on it." This made for sort of strained relations, but they didn't fire me. And then shortly after that an offer from Newsweek came along.
REASON: Earlier, during the '30s when FDR was instituting the New Deal, did you write a lot of editorials about that?
HAZLITT: I didn't like what FDR was doing, and I wrote critically about it, but when it came to Social Security, I was uncomfortable about opposing it. I suggested that it would probably be too expensive in the long run. But I didn't say it stank.
REASON: Is that what you think now?
HAZLITT: Well, I think now that the best thing you could do would be to get rid of it. But the only thing we can do is to try to limit the age at which it begins and things like that.
REASON: You mean, the only thing politically we can do?
HAZLITT: Yes, politically it's about the only thing possible.
REASON: Going back to the '30s and '40s, during this time, you reviewed Ludwig von Mises's Socialism—which was the first von Mises book translated into English?
HAZLITT: Well, now, let me see. I think it was, but the first time I ever heard of Mises was when I read a book by Benjamin Anderson, On the Value of Money. This was a very fine book. It was very critical of nearly all the writers who were writing on money at that time, except that he reviewed Mises's book from its German edition and praised it.
In 1937 I read a review of Socialism in the London Economist. I think they praised it—not extravagantly, but they praised it. The British publisher sent me a copy and I reviewed it in January of 1938. I was terrifically enthusiastic about it, and I said that Mises had written an economic classic in our time. I sent a copy of the review to the publisher to forward to Mises, and I enclosed a letter to Mises. He was then in Geneva.
REASON: And that was the first contact you had made with him?
HAZLITT: Yes. And then he wrote me a letter and we had some casual correspondence. It may have been half-a-dozen letters back and forth. But then when he came over in 1940, and I've often told this story, the phone rang at home—maybe it was at the Times—and I picked it up, and the voice said, "Dis is Mises speaking." And all of a sudden it struck me who it was. He might almost as well have said, "This is John Stuart Mill speaking," because it's not often a classic calls you up.
REASON: And later, then, you reviewed F.A. Hayek's Road to Serfdom?
HAZLITT: What happened with the Hayek book is also interesting. John Chamberlain had been asked to do a foreword to it, and he called me up and alerted me to this and said he thought it was a very good book. And I immediately asked the book editor of the Times whether he would send me a copy of the book for review. And he said he would. I was terrifically struck by the book and wrote that this was one of the most important books of this generation, and so on. As a result of that—the book editor had probably intended to run it on page 21 or somewhere in the back—but when he saw this, he decided to run it on page 1. The consequence was that it immediately appeared on the bestseller list, and then Reader's Digest decided to run a condensation of it, and they preceded this condensation by quoting a couple of lines from my review. I think that if everything I've written myself is worthless, at least I think I helped that book.
REASON: To turn to your own work, when your point-by-point criticism of Keynesianism, The Failure of the "New Economics," was published in 1959, did you expect academic economists to pay attention to it?
HAZLITT: Not really. And most of them did ignore it. However, it did get into the hands of some academic libertarians, and there I got very good reviews of it for the most part, very extensive reviews of it.
REASON: Have you ever regretted that you didn't at some point pursue an academic career, say, in economics?
HAZLITT: Well, you see, I couldn't, because I didn't have the academic requirements. But I never thought much about it. I've lectured at a lot of colleges, but no, I am pretty much satisfied with the career I did. I like writing.
REASON: John Chamberlain, in his recent autobiography, says that he was converted to the free market by what he good-naturedly called "the gang of three"—Rose Wilder Lane, Isabel Paterson, and Ayn Rand. Did you know them all?
HAZLITT: Yes. Yes, I did.
REASON: Did their writings influence you?
HAZLITT: No. I already had these opinions, and I always thought that Ayn was too strident and preached the doctrine of selfishness. I never thought that that was a necessary part of libertarianism. I don't see anything wrong with altruism—except a sort of silly altruism that wants to force you to give money to incompetent people or lazy people or anything like that. That kind of thing I think is bad, but a curious thing about Mises—and I was influenced by him myself, and so was Ayn Rand—was his emphasis on cooperation.
Oh, by the way, Ayn Rand and Mises were once guests at my house for dinner, when we were living in New York. This was their first meeting.
REASON: You already knew Ayn Rand?
HAZLITT: Oh, yes. My wife, Frances, was a story editor for Paramount. Ayn was writing a book, but she had to make a living, so she worked for Frances condensing books for Paramount. So I met her first, I guess, at Frances's office. And she read some of my pieces, and so on.
And so then we invited them to dinner—this was after The Fountainhead had appeared. Mises had read that, and she had read some of his things. They admired each other, but of course, with reservations. Lu [Ludwig von Mises] had a lot of reservations about Ayn, but he admired her vigor and so on. But after dinner they were both sitting in our living room next to each other on the couch, and I was getting drinks. When I came in with the drinks, Lu and Ayn were having a terrible fight. Ayn was saying, "You think that I'm just a poor little Jewish girl who…" something like that. I just heard this part, and Lu was sitting down, and she was thundering all these things. And I said, "Oh, I'm sure Lu didn't say that." And she said, "He did say it!" Then I said, "Well, I'm sure he didn't mean it that way." And Lu was hard of hearing anyway, and he got up, and he said, "I did mean it that way." And this got to be terrible. I didn't know what to do about it, but I kept saying, "I think this is all a mistake." So anyway, somehow they got settled down and left on a friendly basis.
REASON: Did you have any dealings with them together over the years?
HAZLITT: No, and I don't know how much they were ever together. I do know—we were starting to talk about her doctrine of selfishness—that she did call often on human cooperation, and she got that concept more or less from Lu.
REASON: Did you ever try to debate Rand on the issue of selfishness?
HAZLITT: No, no. I never debated with Ayn. I never had a feud with her of any kind because I knew that we had this difference, and I didn't think we'd straighten it out by arguing. I don't try to change someone's mind if I think it's a basic and set thing.
But this reminds me of something. In 1947, Hayek invited 43 people from a half-a-dozen countries to Vevey in Switzerland, and that became the Mont Pelerin Society. He invited some of us from the United States, and we went over on the Queen Elizabeth together. And practically every night at dinner I would get into an argument with Milton Friedman about his monetary views and his quantity theory of money. We would continue it after dinner, and my memory, which may be faulty, was that George Stigler and Frank Knight and some of the others in the group would sit around amused at this argument. I think they were on Milton's side, but they were amused by the argument. But this is the kind of thing I would argue about with Milton. I don't think I ever argued with Milton on any libertarian issue or anything except the monetary issue. And I always argued with him on that.
REASON: Do you consider yourself a libertarian more than a conservative?
HAZLITT: Yes, yes. Oh, by all means. I have no sympathy with these things like prayer in the schools. Well, abortion is an issue that you can't—that I think is not a yes or no issue. I don't believe in complete permissiveness for abortion. Nor do I consider seriously the forbidding of abortion. There are so many questions involved. Another area that I find very tough is the question of pollution. A lot of these issues I haven't written about at all, because they are breaking ground, and I don't think it's worthwhile, if you haven't made up your mind, to write a piece saying, "Well, on one hand, but on the other hand."
REASON: You wrote a book in 1942 advocating a European parliamentary system for the United States. Do you still see great potential in such a reform?
HAZLITT: Well, I still believe in it, but of course, I have come to realize that it isn't necessarily the salvation of everything. It means that the typical parliamentary leader, the typical prime minister, is a far more able person and a more cooperative person than the typical American president. But even so, if public opinion is fundamentally sour, then nothing can be done about it.
REASON: Yes, because the British experience, of course, provides a strong counterexample to the idea that the parliamentary system is any great salvation.
HAZLITT: Yes, and practically all of the European countries have a parliamentary system, except France, which had it and retired from it and sort of half-way came back to it. They all have it, and they are all socialized, much more socialized than we are. And it's much more dug in, because an American president can violate with impunity a lot of things that the prime minister can't.
REASON: You have argued recently in the Wall Street Journal for a line-item veto for the president. Do you see great potential in this reform?
HAZLITT: As a matter of fact, I end by admitting that the line-item veto might not cure the situation, might not bring about complete budgetary responsibility. Also, I point out there that the British system apparently is very good, because unless Parliament accepts the budget of the government, which is the prime minister and his cabinet, the government falls. And once Parliament's accepted it, they have to abide by it. They can't appropriate a penny more. Theoretically, that should have produced a sound budget in Britain. Actually…[laughs].
REASON: You see the same thing in some of the states in the United States that have line-item vetoes.
HAZLITT: Well, I want to tell you, the book I'm writing now will be called Is Politics Insoluble? And I decide that it is—that the personal ambition for individuals to rule or ruin makes it impossible to have a secure and permanent democracy.
REASON: Are you saying that relatively free societies will always tend to move toward totalitarianism?
HAZLITT: A more clear example is Latin America. They have military dictatorships because the democracies tend to bring ruin and chaos, so some military leader decides that he knows what to do. So he puts in some sort of fascism or whatever and also rules the economy, but in a different way than democracy has ruled it. And I don't see how you're going to prevent or stop this. You can write limits into a constitution, but the question is, is there any way to ensure the preservation of a limited democracy? Even if you have a good system, if the majority has its way, it's sure to lead to bad policy, because the majority doesn't understand limited government.
REASON: You sound pessimistic.
HAZLITT: I just recently came across something by William Graham Sumner. I don't know when he said it, but William Graham Sumner lived from 1840 to 1910, and he said, obviously sometime before 1910, "I have lived through the best period of this country's history. The next generations are going to see war and social calamities. I am glad I don't have to live on into them." This is the way I feel now, just as Sumner felt then. I'm glad that I'm not going to live for many years now, because I see a very dreadful time. Now that we have discovered the atomic bomb, I can't see how we're going to keep somebody from using it, just out of sheer curiosity.
REASON: Or sheer evil.
HAZLITT: Yes—sheer evil. The communist camp won't change their system; they won't learn how. But one thing that holds it together is hatred of any noncommunist country. And that's one thing they can do—they can still express their hatred. So I think the outlook for the world is very dismal.
REASON: Holding the foreign situation in abeyance, if you look at the domestic United States, what are the prospects for liberty?
HAZLITT: Since they destroyed the gold standard, we have had universal inflation, and inflation always demoralizes. There was enormous demoralization in Germany during the inflation, and it lasted a long time afterwards. And as long as we have inflation and don't cure it, there's no prospect for fiscal responsibility, so that we look forward to inflation for as long as we can see. And then we have to look forward to intervention—price controls and rent controls and interest-rate controls and a whole series of controls to try to prevent the consequences of inflation.
REASON: Do you see any signs of hope?
HAZLITT: Well, I could see some. But this inflation is the overhanging thing to which I can't see the solution. The book I'm working on was originally written in a light-hearted spirit as an article that was published in Modern Age with the title "Is Politics Insoluble?" But then after I had written it, I began to take the question more and more seriously. So I want to continue it.
One of the things I want to write is that it does some good to try to think and write about what ideal government would be, both in its extent and what it should consist of—but that it doesn't do very much good, because there are popular ignorance and narrowness and fallacies which will probably never be eradicated if you have a pure democracy.
I'm reading Hayek's Law, Legislation, and Liberty. This deals with the function of law and how much we can do to preserve the law, which is the same thing as preserving a reasonable government. I don't go along with people making a religion of the word liberty, and who think of liberty as being limitless. Liberty has to have limits. You know the expression, "My liberty to swing my arm ends where your nose begins." And there is the problem of figuring out where your nose begins and just how that should be handled. All liberty is liberty under law, and that's the catch. That's the question that must be eternally hammered out, and I don't think anybody has given a perfect answer to that question yet. There's still going to have to be a lot of thinking just about our concept of liberty.