Since 1946, Henry Hazlitt鈥檚 bestselling Economics in One Lesson 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鈥檛 explain why they often fail so badly鈥攐r what we should do when they stumble. As Nobel Prize鈥搘inning economist Paul Samuelson quipped, 鈥淲hen someone preaches 鈥楨conomics in one lesson,鈥� I advise: Go back for the second lesson.鈥� In Economics in Two Lessons, John Quiggin teaches both lessons, offering a masterful introduction to the key ideas behind the successes鈥攁nd failures鈥攐f free markets.
Economics in Two Lessons 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.
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鈥攁nd what to do when they don鈥檛.
Brilliantly accessible, Economics in Two Lessons unlocks the essential issues at the heart of any economic question.
"There is little doubt that Quiggin鈥檚 Economics in Two Lessons will be an instant classic and feature on university reading lists around the world. It should also be compulsory reading for policymakers and public commentators, who all too often lack a framework for thinking clearly about the costs and benefits of markets. The good news is that Quiggin has one鈥攁nd he鈥檚 happy to share."鈥擱ichard Holden, Inside Story
"This is a highly readable introduction to the intellectual framework of modern policy economics, with plenty of lively examples."鈥擠iane Coyle, Enlightened Economist
"His book would be a useful supplement to a principles of economics course, with the advantage of avoiding resort to any graphs or equations . . . . [It] provides an essential completion of the basic story . . . . It is essential reading for anyone interested in the practical side of economic policymaking."鈥擬ax B. Sawicky, Jacobin
"The themes are complex, but the writing is clear, and the journey is rewarding."鈥�BizEd
"Quiggin writes well and [this] book is full of useful erudite information."鈥擶arwick Lightfoot, Financial World
"Many economists consider 鈥榦pp cost鈥� to be the single most important and fundamental concept in economics, and the discipline鈥檚 most useful contribution to the betterment of mankind. Indeed, that鈥檚 the view Professor John Quiggin, of the University of Queensland, takes in his book Economics in Two Lessons, which I recommend as the best book to introduce you to economics."鈥擱oss Gittins, Sydney Morning Herald
"Quiggin reckons with the incoherence of markets-only thinking in his masterful 2019 book Economics in Two Lessons, which explores the power, limitations and dangers of using markets to solve our problems in a thoughtful and clear way."鈥擟ory Doctorow, Boing Boing
鈥淎 brilliant book. People often try to write for readers who know no economics, but they rarely succeed. This book is an exception.鈥濃�擱oger Backhouse, author of The Ordinary Business of Life: A History of Economics from the Ancient World to the Twenty-First Century
鈥淭his popular, accessible introduction to economics is organized around an idea that is brilliantly simple yet encompassing.鈥濃�擲uresh Naidu, Columbia University
"With apologies to Isaiah Berlin, Quiggin is a foxy hedgehog: He knows two big things, and these twin lessons鈥攁bout the virtues and limits of markets鈥攕ustain a pioneering, persuasive, and even passionate case for democracy and the mixed economy. Make room for two lessons in your mind, and on your bookshelf.鈥濃�擩acob S. Hacker, coauthor of American Amnesia: How the War on Government Led Us to Forget What Made America Prosper
"With a confident style, John Quiggin weaves together clear theory and fascinating stories to explain why markets work and why they fail. He makes the case that one-lesson economics, based on the idea that market prices are always right, is as useful as a one-wheeled bicycle. If you want to understand what free-market economics gets right, and when governments need to step in, this is the book for you. My two lessons: buy it, and read it."鈥擜ndrew Leigh, member of the Parliament of Australia
"Anyone who wants to understand the real workings and real limits of real markets should read this book.鈥濃�擨ngrid Robeyns, author of Wellbeing, Freedom, and Social Justice
