A site member asked for advice on books that introduce people to the logic of the free market economy. He wanted books on economics, which in the point of view of this website, would be books on the free market economy.
One of the tremendous advantages that we possess, and which the Keynesians do not possess, is that we can express our ideas without equations and jargon. The classic example of such a book is Henry Hazlitt's 1946 book, Economics in One Lesson, but there have been other examples since his.
Several books were recommended by participants on the forum.
I am not convinced that most educated readers are Keynesians in terms of their commitment to any particular economic theory. In fact, I would say that overwhelmingly, people are not Keynesians in terms of the logic of economics. Rather, they are implicit Keynesians, as are the vast majority of politicians. This is because Keynes invented his theory in the mid-1930's, and what he proposed was exactly what presidents and prime ministers around the world were doing, namely, increasing government spending. Their governments were running deficits. They were using government money to make purchases of labor and capital in the marketplace. Keynes provided an intellectual justification for what governments were already doing. In order to do this, he reverted back to mercantilistic economic concepts.
Hazlitt wrote a refutation of Keynes, but it came too late. It was published in 1959, and it was published by an obscure publishing house. It is never cited in professional economics journals. Its title was a giveaway: The Failure of the "New Economics." Hazlitt was taking on virtually the entire economics profession in 1959. He had never attended college. He was an outsider. Those inside the camp of Keynesianism could afford to ignore him. This is exactly what they did.
In terms of clarity, Keynes could never compete with Mises or Hayek. Yet he was a very clear writer in other areas. His classic book, The Economic Consequences of the Peace, published in 1919, is a model of clarity. So were the essays in Essays in Biography. This is a tip-off that there is something fundamentally wrong with The General Theory (1936). Hazlitt took that book apart, chapter by chapter. When he was done, there was nothing left of it, theoretically speaking. But he suffered the fate of those who criticize Keynes. He was ignored. He was not refuted; he was merely ignored.
The academic world loves its jargon. Jargon is the way that professional guilds keep outsiders at bay. Sociologists are notorious for this, but economics since about 1950 has caught up with sociology. The more arcane the economists become, the less the public understands them. They gain their influence, not by clarity of presentation, but by a kind of priestly authoritarianism. Yet the old line is true: where there are five economists, there will be six opinions. They cannot come to any agreements on policy. They agree only on the general conclusions of Keynesianism, and they do not agree on how to get these conclusions across to the common man.
When students take economics in college, they almost universally complain that the textbook is unreadable. That is because the textbook is Keynesian. It is possible to write a clear textbook. I'm using one in the course on economics that I'm teaching to high school students enrolled in the Ron Paul Curriculum. The textbook is aimed at high school students. It was written by Robert Murphy, Lessons for the Young Economist. There is also a teacher's guide that comes along with it. Both can be downloaded for free.
Beginning in 1956, The Freeman has published monthly articles devoted to explaining and defending the free market position. It has always been readable. It has served as an introduction to libertarian philosophy and economics. I know of nothing comparable in the world of Keynesianism.
The website of the Mises Institute has four times the traffic of the American Economics Association. I don't think this is going to change. Literate people learn economics by way of English as a first language. Keynesian economists write economics as if they were writing in Esperanto. They are simply unable to communicate their position in terms of a series of arguments that readers can use to gain recruits to the position. The readers cannot verbally summarize Keynesian logic, nor can they defend it. People who have read Mises, Hayek, Rothbard, Hazlitt, and other writers in the Austrian economics school are capable of defending the basics of the position to their peers. This gives them a tremendous advantage.
Our disadvantage is that our conclusions are hostile to the primary thrust of modern politics. We call for shrinking the state. The instinct of the voters is to call for bailouts whenever they get in a jam, and the state is the agency with the money to provide the bailouts. The voters understand bailing out the big banks is a bad idea, but they do not understand bailing out people over age 65 is a bad idea. That is because they intend to live beyond age 65. They do not intend to become bankers.
Voters have become addicted to bailouts. To roll back the bailouts is to roll back people's income. They would have to adjust their budgets. Their self-interest seems to be to support the state and its policies of wealth redistribution.
The fact of the matter is very different. The fact of the matter is that liberty provides most of the income for most people. But they assume that liberty is normal. So, they look for ways to increase their security, and they keep coming back to the state. They assume that the state can provide a free lunch for them personally. They assume that the state can provide bailouts, and the cost will be borne by the rich and the super-rich. The voters will not learn that this system has been used to insulate the rich and the super-rich from the authority of consumers. Here is probably the most difficult task of the Austrian school economist: to show that the present system is inherently a system for bailing out the rich and the super-rich.
It is easier to do what Occupy Wall Street does, namely, to call for more taxes and more wealth redistribution -- more of the same. It hasn't worked in 150 years, yet they decide that what we need is more of the same. They want people with badges and guns to take away money from the super-rich, and hand it over to them. This has been the call of the socialists for 150 years, yet economic inequality has not changed. You would think that they would rethink their premises, but they don't. They believe in badges and guns; they believe in politics by theft; and so they shout their mindless slogans. They have no effect. The system goes forward.
The persuasion problem faced by Austrian School economics is simple to state: it calls upon people to get their hands out of other people's wallets. It also calls for other people to get their hands out of the readers' wallets, but everyone wants the other guy to go first.
All that we can do is what Leonard Read said we must do. We must improve our own understanding. We must become better defenders of the position. Reform must begin with us.
This is true of all successful reforms.
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