Economics in Two Lessons

<p><b>A masterful introduction to the key ideas behind the successes--and failures--of free-market economics</b> <p/>Since 1946 Henry Hazlitt's bestselling <i>Economics in One Lesson</i> has popularized the belief that economics can be boiled down to one simple lesson: market prices represent the true cost of everything. But one-lesson economics tells only half the story. It can explain why markets often work so well but it can't explain why they often fail so badly--or what we should do when they stumble. As Nobel Prize-winning economist Paul Samuelson quipped When someone preaches 'Economics in one lesson ' I advise: Go back for the second lesson. In <i>Economics in Two Lessons</i> John Quiggin teaches both lessons offering a masterful introduction to the key ideas behind the successes--and failures--of free markets. <p/><i>Economics in Two Lessons</i> explains why market prices often fail to reflect the full cost of our choices to society as a whole. For example every time we drive a car fly in a plane or flick a light switch we contribute to global warming. But in the absence of a price on carbon emissions the costs of our actions are borne by everyone else. In such cases government action is needed to achieve better outcomes. <p/>Two-lesson economics means giving up the dogmatism of laissez-faire as well as the reflexive assumption that any economic problem can be solved by government action since the right answer often involves a mixture of market forces and government policy. But the payoff is huge: understanding how markets actually work--and what to do when they don't. <p/>Brilliantly accessible <i>Economics in Two Lessons</i> unlocks the essential issues at the heart of any economic question.</p>