Economics for Real People: An Introduction to the Austrian School

Rating:
Summary: An excellent introduction to the Austrian school
Review:

this book is breezy and clearly expressed, but Gene Callahan's thought processes are rigorous and carefully thought out. Callahan anticipates the reader's questions and, in brief, gives a wonderful introduction to the Austrian school of economics for the layman in clear, plain language well salted with humor and wit.

For the person who wants to understand the basic theories behind economics, this is the book.

Joseph (Joe) Pierre,

author of Handguns and Freedom...their care and maintenance
and other books

Rating:
Summary: An Accessible Introduction to Economics
Review: Callahan (and the Austrian school in general) explain economics in terms of human action rather than the abstract and sometimes obtuse models of classical economists. Beginning with the simplest possible scenario, a single human acting in isolation, Callahan builds a hypothetical society and uses it to explain the crucial concepts of economics in a style and language that should be accessible to anyone who has completed high school.

He explains the concept of subjective valuation with his individual on the island, then begins adding people and concepts. He quickly takes us through direct exchange, a refutation of the labor theory of value, the introduction of money (including the explanation of the criteria that make something a good choice to use as money), time preference (and how the interest rate serves as the "price" of a time preference), and so on. In the second half of the book he explains concepts that are a bit more abstract - how do central banking and fiat money work? What causes the business cycle? How does a free market system handle externals (benefits or consequences imposed upon those not party to an exchange -e.g. water pollution).

Throughout it all, Callahan cogently makes the case for a truly free market as the only means of efficiently satisfying the desires of a society's members.

There are things I would have liked Callahan to cover better, for instance, a greater discussion of how the neo-classical economists work, and how their theories influence media reporting of economic issues (think about all the indicators that we are bombarded with in the business section of the paper). However, I don't see how he could have covered that material while keeping the book small and readable. He does give an extensive bibliography for those wishing to further investigate particular points.

A handy appendix gives the five page version of the history of the Austrian movement. It seems foolish to say this with it only being April, but I expect this will be the best book I read this year. I would give it more than 5 stars if I could.

Rating:
Summary: Shhhhh! Don't tell the sheep
Review: Finally the world is being exposed to the thinking of Austrian economists after decades of Keysian propaganda. This book is another of the recent number of books on the subject. Like the others, it's all about common sense, it represents the genius of the spontaneous ordering of the free market system with its attendents; protection of private property rights by a rule of law (and not men), the need for a stable currency, external defense, and internal order.

I would suggest that the reader also peruse "the making of modern economics" by Mark Skousen and anything by Thomas Sowell. The jury is in, the Austrians have won the battle of economic ideas. And, lest we forget, economics is "the business of life."

Rating:
Summary: Great Intro to Real Economics
Review: Just finished the book. It is very impressive. Even if you are already familiar with the Austrian School, the book is useful because it puts in one place the latest refutations of objections to the most important, and timely, Austrian insight, the Business Cycle Theory. The rest of the book is also excellent in its consistent application of the theory of subjective value, the foundation of the Austrian School. I personally love the way the author uses quotes right from Austrian masters to reinforce his points.
For the novice, there are few places to gain a firm grasp on real economics so quickly and painlessly, it's a complete first-year course. After reading this, read, Economics in One Lesson by Henry Hazlitt and then, What Has Government Done to Our Money by Murray Rothbard. Also read the daily articles on Mises.org to stay up on current events and to reinforce your newly found expertise in economics.

Rating:
Summary: Buy it! Buy it now!
Review: That's why you're reading this review. You know you want to. Hit that one-click button. Are you tired and confused by what passes for economics these days? Did you sit in class in college and wonder what the heck was going on? Do you believe people can't think in graphs and algebraic equations? Do you believe if you took all the economists in the world and laid them in a line they'd still all point in different directions? If you answered "yes" to these questions then you'd be interested in the Austrian school of economics (the only school, by the way, that predicted the Great Depression). And Gene's book is an excellent introduction to that school. Of course, you can just bypass this book and go straight to Ludwig von Mises, the grandmaster of the Austrian school, and read his magnum opus, the 1000+ pages _Human Action_...nah, don't do that, at least not yet. Read this book first, and once your appetite is whetted then you can move on to the graduate level stuff. You'll like this book. I promise.

Rating:
Summary: Economics for You and Me
Review: The Austrian School is the most consistently free enterprise school of economic thought. Its most outstanding representative was Ludwig von Mises and its leading thinker in recent memory was Murray Rothbard. Both von Mises and Rothbard wrote substantial treatises on economics. However, there haven't been many introductory works. (Hazlitt's Economics in One Lesson focuses more on government intervention than prices, the evenly rotating economy and capital theory.)

Gene Callahan has remedied that situation with this excellent introductory work. Written in the style of Rothbard, Callahan provides a primer on methodology, economic theory, and a critique of government intervention. The examples are always vivid and at times humorous.

After finishing this book, the reader should tackle Rothbard's Man, Economy and State. Then he should try von Mises's Human Action. Human Action isn't easy, but it will present the reader with the acedmic and theoretical rigor of the Austrian school's greatest exponent. For an introductory work that is more basic that Callahan's, David Gordon's An Introduction to Economic Reasoning is excellent.

Rating:
Summary: Tip of the iceberg
Review: This book is an excellent introduction to the Austrian School, but not a substitute to the work of Menger, Bohm-Bawerk, Fetter, Mises or Rothbard. I suppose that most people who are planning to buy this book are familiar with the Ludwig von Mises institute website. If you think of the best articles on the Mises site, and organize them in the structure of a general treatise, that is what this book is closest to.

While you won't learn as much as you would reading Capital and Interest, or Man, Economy and State for example, there is one purpose where this book is immensely useful: verbal debating. You would be pretty well served to import the arguments from this book directly into your verbal debates.

To the reader from Dulles, you managed to pack an unbelievable amount of fallacies into a handful of seemingly benign sentences. But I think I've spotted the problem: ""Austrian" economics, a super-libertarian school of economic thought founded by thinkers from Central Europe in the early 20th century". Anyone with even a passing knowledge of this school knows that Menger founded it in 1870, and some of its most prominent economists, such as he and Bohm Bawerk were in the 19th century. You are clearly trying to come off as looking more knowledgeable than you are. By the way, is Enrico Barone done writing that article yet? (If you get that, pat yourself on the back)

Edit: Second reply to the reader from Dulles- If I came off as too combative and assumptive, forgive me. Most mainstream economists and professors give an overview of the Austrian School (especially the calculation debate) which is not only logically, but factually distorted (The classic example being the one I alluded to above in which people state that a paper written by enrico Barone in 1908 was an intended refutation of Mises' 1920 paper. Also, the only post-lange contributions on the capitalist side taken into account are those of Hayek). I assumed that you were influenced by this attitude from your statement "the familiar lapses that have made "Austrian" synonymous with "crackpot" in many circles".

Anyway, even if you maintain that Menger did not originate a unique school of thought (I say he does. Although, compared to the Anglo-American classicals, he was very similar to Jevons and Walras, he is far too unique to be classed as simply a "marginalist" along with them), the statement that the austrian School was founded "in the early 20th century" is irreconcilible with the career of Bohm-Bawerk. His most significant work, Capital & Interest saw two volumes published in the 1880s (including the most famed one , 1889's "positive theory of capital).

I would also like to tackle your statement about the minimum wage and the elasticity of demand for labor.

Of course, we can't make a quantitative judgement without knowing this, but we can make a qualitative judgement.

The only way an increase in the minimum wage could not cause a lower demand for labor would be if the demand for labor was extremely inelastic. how inelastic would it have to be? It would have to be as inelastic as a steering wheel (the amoutn of steering wheels demanded at any price are limited by the amount of cars in use. i.e.- if steering wheels were one cent a piece, you still wouldn't have 6 for every car you own). However, labor being incredibly scarce and nonspecific, can never approach this degree of inelasticity.

Also, the idea that the Mises institute is "cultish" is absurd. You should see the critique of Mises in Rothbard's "Ethics of Liberty". (rothbard was a major player in the mises institute)

Edit #2:

Rothbard certainly was a misesian, but he didn't have a cultlike admiration for the man.

From Rothbard's "The Ethics of Liberty" (p. 207) ,attempting (in my opinion failing) to rebut Mises' defense of "value free" economics on the grounds that he could tell what policies would lead to certain ends, and people could then choose what ends they wanted.

"But ingenious as it is, the attempt completely fails. For how does Mises know what the advocates of the particular policy consider desirable? How does he know what their value-scales are now or what they will be when the consequences of the measure appear?.......Mises makes one further attempt to establish his position, but it is even less successful.....Furthermore, it is hardly correct for Mises to denounce these judgements as as "emotional"....It is pointless for Mises to call to call for his critics to use "discursive reasoning" since he himself denies denies that discursive reason can ever be used to achieve ultimate ethical values."

Also, the definition of "inelastic" requires that more money would go to the "poor" (I don't think we want to get into a debate about interpersonal utility comparisons) in the aggregate. I was talking about the total level of employment.

Rating:
Summary: Excellent Introduction and overview. Refreshing.
Review: This book presents an overview of the Austrian School, written refreshingly in accessible and contemporary language. It was fun and enjoyable to read! A book I do not hesitate to recommend to friends and associates who have not yet grasped the importance of understanding economics.

A job well done!

Rating:
Summary: A triumph
Review: This is a great book. Although I would recommend it to neophytes, it is also useful for people who already have a grasp of economics generally and the Austrian school particularly.
The chapter explaining Austrian business cycle theory would make this book worth the money even if the rest of it were ghost-written by John Kenneth Galbraith.