Monday, February 06, 2006

Austrian Economics for Dummies

You know, a thought struck me this morning. You just have to be too darn clever to be an Austrian, or at least aspire to such a position. You have to read hundreds of really heavy books, gain a degree or better in something really clever, and still you will be attacked, usually by other Austrians, for being insufficiently educated. This is no good. Economics should be for the whole of humanity, not just for those with PhD after their name. Indeed, considering the mess in the world caused by those economists with PhD after their name, perhaps we should even exclude such people from being able to contribute towards economics? Whatever the case, what I think we need is a new book for the masses. What I think we need is:

At the moment, as best as I can make out from a period of feverish activity on Google, there is nothing between Sean Corrigan's excellent Austrian Primer, and Uncle Murray's superlative Man, Economy, and State. We need something in the middle far more condensed than the 500 hours of reading required by the Austrian Study Guide.

This single 500-page book should cover the basic a priori axioms, economic calculation, time preferences and interest rates, subjective utility, the win-win situation with free trade, the gold standard, a bit of money and credit, some refutations of the lauded policies of US Presidents (particularly Lincoln and Roosevelt), and then an extensive well-crafted guide to further reading. Oh, and all the other important stuff I've forgotten to mention. There should be lots of pictures, lots of pie charts, lots of graphs, and lots of cartoons. We need to appeal to the visual centres of the right brain as well as to the auditory centres of the left brain. Though we should also have lots of bulleted lists and tables to appeal to the less intellectual part of the left brain.

The book should not try to prove Austrianism, as if playing to a hostile crowd of socialist Keynesian professors. It should just describe Austrianism simply and clearly, so that the average intelligent man or woman can pick up the book, and put it down a day or two later, with a lucid understanding of what Austrianism is. Ideally, a business traveller flying from London to Los Angeles should be able to get through the whole thing on the plane, there and back, if they skip the George Clooney, Brad Pitt, and Matt Damon movies.

There may already be such a book out there. If there is, I can't find it. And more importantly, even if there is such a book, Joe Public probably won't be able to find it, either. And the more of Joe Public we have on our side, the brighter the future of Austrianism will become.

So my plea is, given that Henry Hazlitt and Uncle Murray are no longer with us, we need someone brutally intelligent and acknowledged as being cleverer than a hatful of Swiss Army knives, to write this masterwork for the common man in the street. We need a Professor at the Ludwig von Mises Institute, a Raico, a Reisman, a DiLorenzo, a Salerno, a Hoppe, a Block, or even dare I say it a Tucker, to create this masterwork.

The problem with being really clever though, is that it's sometimes easy to forget what it is was like to be stupid.

But fear ye not. Becuase if you need a sounding board, a co-author who could provide you with common-man questions, such as "I'm sorry, I haven't a clue about what you've just written", modesty forbids me from presenting the name of a man who hasn't forgotten what it's like to be stupid, who could easily help drag you down to the level of the common man. But I'll let you know if you contact me.

So go on, make millions for yourself (and your co-author). Push Austrianism out to the suburbs of civilisation and help propel a bright uplit future into the present age of democratic uncertainty and socialist decivilisation.

I can see it now: A book published by and fully available online, which we can all reference when given pesky questions by non-Austrians, to clearly demonstrate the superiority of Austrian thought, without needing to read or reference the entire Mises-Rothbard canon.

It would be a Magnum Opus of a genius. Is anybody out there up to the challenge? Is there anyone out there capable of condensing Austrianism into a clear and succinct 500 pages or less, and making a good free market profit at the same time?

Dead-ender Hayekians and other socialists need not apply.


Julius Blumfeld said...

Gene Callahan's book "Economics for Real People" is a very good intro to Austrian Economics and would seem to be exactly what you are looking for:

Julius Blumfeld said...

Do you really think it is all that hard, though? The fundamental idea that welfare is maximised by a liberal regime of free choice within a framework of property rights, seems pretty clear.

All else is mere detail ;-)

Jack Maturin said...

Bugger. Another book to have to read.

I haven't read the Gene Callahan book, so I can't comment upon it, but I tire of reading on page 273 of one tome "and this is the third principle of Austrian economics...", and then on page 976 of another tome "and this is the 2nd principle of Austrian economics..." and so on. We need them all collected in one place, at least all the ones the senior gurus of the Mises Institute can sign up to. If we let off-piste non-Misesian Austrians into the camp, the book will never be written.

Also, all the books I've read are written defensively, i.e. like a chess strategy book for Russians, written in Latin, without any cracks, so brilliant Chicagoans or Keynesians can't find the loopholes and the flaws. I'm looking for something more like a book on draughts.

The fundamental idea that welfare is maximised by a liberal regime of free choice within a framework of property rights, seems pretty clear.

Yes, but Julius, you have arrived at this position by educating yourself thoroughly with most (I presume) of the major works of Austrianism. We need something that makes it all accessible to Joe Ordinary, at a single reading.

But like I said above, maybe the book you mentioned is the one. Though I'd just love to see 'Austrian Economics for Dummies' actually published. Maybe Mr Callahan would make more money if he re-titled his book! :-)

Jeffrey Tucker said...

Yes, the Callahan book is excellent for this purpose. Another is in process, by William Anderson. It is designed for grad students. There is also the Taylor book, and Mises's own "Economic Policy" (about to come back into print) is excellent on policy topics. You know, part of the problem is that people have different ideas in mind when it comes to an introduction. Should it focus on policy or be completely devoid of policy? You can make a case either way.

Julius Blumfeld said...

"Yes, but Julius, you have arrived at this position by educating yourself thoroughly with most (I presume) of the major works of Austrianism."

You flatter me! I have dipped into the weightier Austrian tomes but have certainly not read them cover to cover. The important thing, I think, is to maintain a critical attitude. And this includes deciding how to allocate one's limited reading resources! For laypeople like ourselves, I actually think it is more important (and certainly more interesting) to have a good handle on the general themes and what is right (and wrong) about austrian economics and its underlying ideas, than it is to know the fine details of, for example, the Austrian theory of the trade cycle.

"We need something that makes it all accessible to Joe Ordinary, at a single reading."

That's exactly what Gene's book is!

Anonymous said...

There is also 'The Capitalist Alternative: An Introduction to Neo-Austrian Econimics' By Alexander Shand.

Jack Writes:

"We need something that makes it all accessible to Joe Ordinary, at a single reading."


"what I think we need is a new book for the masses. "

As soon as Joe Ordinary starts to take an interest in this sort of thing then he stops being ordinary and starts to become an intellectual. It is among real intellectuals that ideas are discussed and criticised and it is intellectuals who drive social change. Intellectuals will always be a very small proportion of the population though and it is wishful thinking to suppose that the 'masses' will ever be interested in this sort of thing or be anything other than intellectually impotent.

Jack Maturin said...

Ah, but you're limiting yourself. I was a Joe Ordinary businessman until a few years ago when the UK government smashed my business with a new regulatory framework, forcing me to completely change my line of business. Through what you might call a condensed 'adult education' program based upon wading through first of all Randianism, then Adam Smith (boo hiss etc), then David Friedman (more boos, more hisses), through Robert Heinlein, and finally Herr Von Mises (after wondering who the hell he was after reading Atlas Shrugged), I finally reached a proto-Austrian position, and then (thank goodness) stumbled upon

It's cost me a fracking fortune in books and postage. If only I had had access to 'Austrian Economics for Dummies' I might have got here a lot quicker and a lot cheaper.

Yes, change is driven by the intellectuals. But intellectuals are not a static bunch labelled by the state (through state-funded university degree programs), who spring fully formed from the brow of Zeus. Intellectuals can be anybody, and many of them arise from the 'ordinary' population, when they are forced (usually by government dumping on them) into thinking a bit harder about things.

Instead of watching them disappear into the clutches of the socialists/environmentalists/UK independence Party, let's get them onside quicker, into the Austrian movement.

The books above, suggested by other commenters, may be the way to go rather than any 'Yellow and Black' Dummmies guide, and I suppose I'll have to shell out and buy the suckers, to add to my already groaning bookshelf.

A Dummies book is, yes, only a way in. But let's make it easy for people, and avoid the appearance of elitism. Let's show them the way in. Let's give them a nice easy yellow brick road down to our own particular emerald city.

We can bombard them with the usual 100 book, million word, recommendations when they get here.

Jack Maturin said...

Should it focus on policy or be completely devoid of policy? You can make a case either way.

Hmmm. I think such an introductory text would have to be merely descriptive. For instance, the book would be able, theoretically, into an 'objective viewpoint' series such as:

"Keynesian Economics for Dummies"
"Marxist Economics for Dummies"
"Austrian Economics for Dummies"
"Randian Economics for Dummies"
"Chicagoan Economics for Dummies"

All the above books, could, in theory, be written by the same highly knowledgeable economist, almost as if they passed no judgement either way about any of the various economic approaches.

It would be up to the reader to make up their own mind. And given that Austrianism is clearly the best way to go :-), I'm sure they'd come round to our way of thinking.

We could point them at the policy books, in the extensive bibliography in the final chapter, if they made it that far.

I think policy would frighten newcomers to the subject. Stating what a 100% gold reserve framework is all about is one thing.

Frightening the horses by letting them know exactly what is entailed getting to it, could be a bit strong for people new to the area.

I shall have to buy the Shand and Callahan books. And I'm looking forward to the William Anderson book. Books, books, books.

There'll be the financial death of me.

Gekko said...

Callahan is excellent. The humour is a little self-conscious at the start and I was worried it would lapse into being condescending, but it settles down into a wonderfully flowing read. Although I already understood the basics of Austrian economics, it made the principles seem blindingly obvious. It gave me enough momentum to go on and hit the whole of 'Man, Economy and State' (which itself was a surprisingly easy read).

cuthhyra said...

What do you dislike about Friedman, Jack?

Jack Maturin said...

I think the 'Machinery of Freedom' is an excellent kick-off book for someone who was like me trying to figure out what the hell was wrong with social democracy, something I had generally believed in until one day it kicked me in the teeth.

What I don't like about Friedman is the compromises he proposes with the state, to get us to a libertarian situation, eg. school vouchers. The state will always come off best when entering into such compromises, and will blame libertarians if they don't work, and take the credit if they do. Working with the state is, for me, a no go area.

They should simply be removed from every area of our lives. The state is evil. To do deals with evil, is itself evil. Ok, it's a rather simplistic approach, but I'm a rather simplistic person. I feel much happier at home in the hard no-compromise Austrian school, the Baader-Meinhof East German wing of libertarianism.

But hey, Friedman Junior is a damn sight better than his father! :-)

Julius Blumfeld said...

I thought and still think that TMOF is one of the most inspiring libertarian books ever written. Nor do I think that DF can be fairly described as a compromiser!

That said, a good libertarian friend has persuaded me that DF's notion of a value-free marketplace for law is fundamentally flawed. Ultimately there are libertarian values and so we have to reject laws which conflict with those values; even if many or most people would prefer to have them and would be prepared to "pay" for them. Otherwise we would simply end up with a State again.

Anonymous said...

Why should everything be made easy? As things are, there seems to be a healthy growth in the community of adherents. If the bar of entry were lowered to permit people easier access at this time, what would be the benefit? You got there of your own doing. I got there of my own doing. Anyone else who wishes to can get there of their own doing.

Web sites like Lew Rockwell's are gaining increasing traffic. It gets increasingly easy to have access, but effort should still be a requisite.

Libertarian Jason said...

I was going to point out that Gene Callahan's book is a EXCELLENT resource for doing just this... but I see others have beat me to it.

Instead, please count my voice among the chorus of "amens".

Jack Maturin said...

Apologies for my absense. Had to go and earn a living again.

Why should everything be made easy?

Still smacks a little elitist for me, anonymous. The intellectuals may lead the vanguard. But the main column still needs to know where it's going. Moses can know the mind of God, but the Israelites still need the Ten Commandments. Besides, everything should get easier. If we don't make what we have to offer easier to access, then the competition, with their hilarious Gaia hypotheses, and Michael Moore pop-diatribes, will pick up those who know something is wrong in the state of the union, but who don't know quite what it is. The appeal of the 'anti-government' dark side of socialism is very strong, and although it is useful perhaps for some to have been through this, and then through the other side (eg. Hoppe himself), I think if we can get those who begin growing a sense of anti-government feeling onto our side first, before they fall into the hands of the Mooreites, our future lives are going to become much easier pushing Austrianism out into the world.

As things are, there seems to be a healthy growth in the community of adherents.

Yes, it's good. But let's not get complacent. It can always get better, if we work at it.

If the bar of entry were lowered to permit people easier access at this time, what would be the benefit?

Come on, anonymous, where would we be if we didn't already have Henry Hazlitt's 'Economics in One Lesson'? All I'm suggesting is an equivalent, but more directly outlining the tenets of what-we-can-all-agree-on Austrianism. It wouldn't even be too dissimilar from 'EIOL' but just more targetted directly at specifically Austrian economics (e.g. gold standard, and why).

You got there of your own doing.

Took me a bloody long time, and I'd have been obliged to have found a route map, first.

I got there of my own doing. Anyone else who wishes to can get there of their own doing.

Yes, but too many stray on the way, into the dark side, because they can see or can find no other alternative. They think centre politics is mistaken, and the rightist alternative is George W. Bush and his ilk, with perhaps the BNP thrown in by the BBC as the further extreme of rightism. It's no wonder they go left.

Yes, it's getting easier. Thank God for Sir Rockwell and Sir Tucker, but I think we still need a route map to point people towards, once we have attracted their attention.

Though I suppose at this point we'll have to agree to differ. I can see your point of view. One must struggle to learn and spoon-feeding has led us to a point in British Universities where students are no longer able to write essays, without copying them off the Internet. But my point of view is that we must help people find the place where the struggle is, before they begin their own march forwards from that point, onwards.

One might say I'm with the more pragmatic Dominican Wing of Austrianism, and you are with the more purist Franciscan Wing. As long as we both continue to promote the same cause, in our own way, I'm confident it's all to the good.

(I wonder who the Jesuits are? :-)

I was going to point out that Gene Callahan's book is a EXCELLENT resource for doing just this... but I see others have beat me to it.

It would seem, Mr Jason, Sir, in the words of Lord Bono of Dublin, that I have found what I'm looking for.

Anonymous said...

Jack I wanted to tell you that I appreciated your well thought out and well expressed response to my earlier comment. When I said I didn't think it should necessarily be easy, I wasn't taking what I thought was an elitist position. Austrian economics is about logic and is thus open to anybody that wants to think logically. I think its lack of adherents is due to something other than the fact that it is difficult.

It seems that a good portion of what makes Austrian economics what it is is epistomological in nature. Austrian economics first and foremost seems to be about what you can know and what you can't. No matter how easy the text,I am not sure that this is a subject that others generally would find as fascinating and important as you and I. Most people are looking for answers. They want to know what interventions work and not why the interventions are destined to fail.

While I will be the first to admit that the first couple of hundred pages of "Human Action" initially seemed impenetrable, they were also compelling enough to keep me plugging away until I at least got the gist if not every nuance. Even though Rothbard covered the same terrain in a more penetrable fashion in "Man, Economy, and The State", it still wasn't what I would call easy. Again I ask why it should be easy or even why it should be for everyone.

If the purpose is to widen the political base, which is a worthwhile objective; then instead of an easy text on Austrian Economics it would make sense to encourage people to read Rothbard's "The Ethics of Liberty" or "For A New Liberty". These books are easy to understand and circumvent the epistomological underpinnings of Austrian Economics which aren't of interest to most people anyway.

Whatever the case, I think both of us share the same goals. I would like to thank you for taking the enormous effort to put this web site together. Being a non-academic, I find something appealing about your outside academia view. In some way it is obvious that it was hard for you as it was for me to fathom some of the depths of Austrian Economics. I think part of both of our commitments to the view come from the fact it wasn't easy for us.

Jack Maturin said...

Although in theory we both could still become Professors of Economics at Buckingham University, I think the die is cast.

I suppose at least some of us need to be outside the goldfish bowl to see what the fish look like.

David said...


Though this is four years after your initial post, the idea of an "Austrian Economics for Dummies" book is still viable. Considering that my own interest in Austrian Economics is a recent development (within the last month or so), and of the few that I have perused I found reading Hazlitt's "Economics in One Lesson" easy to understand and it has prompted me to think of its relevance in 2010 and of economics in general. Though I do find some of examples a bit outdated, it is still applicable.

As for spending a "fracking fortune"(love the BSG ref) on the books, I found many of them, such as Mises "Human Action" (and a study guide) freely available as pdf files at Mises Institute and scores more through web searches and links in Wikipedia reading through the bios of Hayek, Mises and others. Even managed to find a pdf of Keynes' "General Theory of Employment, Interest and Money."

As for a dummy book, maybe instead of an "intellectual" writing it, it should be written by a "Common Man" or perhaps suggesting the idea to someone at the Mises Institute to write such a book. If anything, it may irritate Paul Krugman among others opposed the Austrian School of Economics.

Anonymous said...

the best beginners guide to economics I know is how economy's grow and why they crash, by peter Schiff

its really easy to understand and lays good foundation knowledge.

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Economic Collapse News said...

Peter Schiff's book mentioned above is all you need to understand Austrian Economics or should we say "real economics."

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