Economics in One Lesson Applied in Real World Issue: Live Cattle Export Ban

Henry Hazlitt well-stipulated his message in Economics in One Lesson, which distinguishes good economists from bad economists. He states that many economists overlook the long-term consequences of a policy and mainly focused to benefit only a particular group as a result of a unique characteristic of the market – that is the driving self-interest of each member of the society (1952). In other words, many policies fail because they are created by only considering the immediate impact and its consequences to certain groups, neglecting the needs of other groups involved.
Although the market can work solely with its magic using Adam Smith’s invisible hand theory, it is still crucial to have government intervention in order to correct the market failures (Gans et al., 2012). Hence, it can be determined that policies created by the government are equally crucial in shaping the economy. However, what if these policies are formulated by blinded policy-makers as mentioned in Hazlitt’s claim? Then, it is not far that economic catastrophe follows.
Even if Hazlitt’s book was published over six decades ago and that this issue was identified back then, the tragic reality is that policy-makers still commit the same mistake until now. This paper will examine real world issue to illustrate an example of the fallacies contained in recent policies.
Policy Identified
After Four Corners, an Australian investigative current affairs television program, aired the horrific images of slaughtering cattle in some Indonesian abattoirs in May 2011, many animal welfare groups protested to ban live exports. As a response, on 7 June 2011, the Australian Government imposed a ‘live cattle export ban’ to Indonesia a week after the release of the footage (Department of Agriculture, 2011). The ban was lifted after a month (“Government Lifts Live Cattle Export Ban”, 2011).
Analysis
The policy of ‘live cattle export ban’ was immediately created in response to particular groups such as the call...