My Views On Economics

I’m an advocate of the complete separation of the state from the economy, i.e., of a 100% free market.

Economics depends on politics, and politics depends on philosophy. A given political system—capitalism, communism, fascism, the mixed-economy/welfare state, etc.—represents the application of a particular set of philosophical premises, including moral premises, to the question of the proper role of government. Economics then describes the effects of a government’s activity on the production, trade, and so-called “distribution” of wealth.

Despite their claims to the contrary, various schools of economics are not “value-free,” but in fact implicitly hold the values of a particular political system as their standard of what economic outcome is desirable. For example, the Classical and Austrian schools implicitly hold the freedom and rights of individuals and the production of wealth as their standard of what is good. Conversely, the Marxist and Keynesian schools implicitly hold the economic equality of various groups, to be achieved through the coercive redistribution of wealth, as the desired end of economic activity.

False philosophies tend to attract intellectually dishonest adherents by virtue of the fact that the false tenets of the philosophy ultimately clash with observable facts, which means that if one wants to maintain the truth of the tenets, one ultimately has to distort or ignore the facts. Conversely, true philosophies tend to attract intellectually honest adherents by virtue of the fact that the true tenets of the philosophy are consistent with observable facts, which makes possible the conscientious focus on such facts. The same is true of the schools of economics that these philosophies provide the framework for.

Because the Classical and Austrian schools of economics are derived from predominantly true philosophic premises, I have found that the economic principles these schools discovered are also predominantly true and valuable. Not surprisingly, since these principles correspond to observable facts, they are also relatively easy to understand and make sense. Conversely, having found that both Marxist and Pragmatist philosophies clash with observable facts (actually, these philosophies deny the existence of objective facts as such), I have not been surprised to find that Marxist and Keynesian economic principles—which were invented rather than discovered—also clash with observable facts, and are convoluted, ponderous, and nonsensical.

It is largely the predominance of Marxist and Keynesian economics in higher education that has given the subject it’s current reputation as being dry, difficult to understand, and inapplicable to reality. However, in reading classical and Australian books on economics, I have found the opposite to be true: for the most part, the subject of economics is fascinating, easy to understand, and offers practical insights into the daily events we read about and participate in. It is the best of these books that I’d like to recommend.

Without a doubt, the best way for a beginner to become acquainted with the subject is by reading Economics In One Lesson by Henry Hazlitt. This book is written in a clear, non-technical style intended to be intelligible to non-academic readers. It’s short. It covers a whole host of everyday issues, dispelling the most common economic fallacies and presenting the most essential positive economic theory in a way that is clear, interesting, and enjoyable. From reading this book alone, it is possible to have a better understanding of the subject than do most of today’s mis-educated economics professionals.

Next, I would recommend reading a very short economic primer to reinforce the lessons of Hazlitt’s book. “Essentials of Economics” by Faustino Ballvé provides an excellent 99-page overview of Austrian economic principles in the form of a very readable miniature textbook.

From here, you may be motivated to study the subject in depth. To do this, I strongly suggest reading my favorite book on economics, Capitalism: A Treatise On Economics, by George Reisman. To understand what makes this book so good, it helps to know that its author is not only one of the world’s leading economists himself, but was also a top student and close associate of both Ayn Rand (the twentieth century’s leading pro-reason, pro-capitalist philosopher), and Ludwig Von Mises (the twentieth century’s leading Austrian economist). “Capitalism” is an absolutely brilliant book that covers all of the economic subjects touched upon in the preceding books, and many others, including environmentalism and today’s cultural context, in fascinating detail.

As for my own writing, for a brief, intelligible, and non-polemical overview of the ideas of Keynes, I recommend my essay, The Theories of John Maynard Keynes. To make sense of the health care debate, I recommend my condensation of Dr. Reisman’s essay, The Real Right to Medical Care vs. Socialized Medicine (published in Serial 104-49 for the use of the Committee on Ways and Means by the U.S. Government Printing Office in 1996).

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