This high-school text, published in May 2000, is aimed at teaching the intelligent young reader how to think about economic problems in a manner consistent with the Austrian School tradition. Its chapters on action, preference, demand and supply, value theory, money, and price controls emphasize deductive logic, the market process, and the failures of government intervention.

As the only text of its kind, this book is engaging, funny, filled with examples, and never talks down to the student. It is perfect for homeschoolers, but every student, young or old, will benefit from it. Indeed, a student familiar with its contents will be fully prepared to see through the fallacies of the introductory economics texts used at the college level.

The contents of this primer include:

    * Introduction
    * 1. The Method of Economics
    * 2. Action and Preference, Part 1
    * 3. Action and Preference, Part 2
    * 4. Demand and Supply
    * 5. The Labor Theory of Value
    * 6. Price Controls
    * 7. Minimum Wages and Wage Control
    * 8. Money, Part 1
    * 9. Money, Part 2
    * 10. The Gold Standard
    * Conclusion
    * Glossary
    * Recommended Readings
    * Index

Download An Introduction to Economic Reasoning

PDF format, 1.6MB, 210Pages.

By David Gordon. Ludwig von Mises Institute.

Introduction: WHY STUDY ECONOMICS?

Why, indeed? A good short answer is that you can’t get away from it. Almost everything you do involves economics. Why do people have to earn a living? Why do some people—heavyweight boxers, rock stars, and movie producers, for example—earn vastly more than bus drivers or policemen? What determines the price of a Big Mac, or, for that matter, a Mack truck? Whenever you have to deal with money or prices, you are talking about economics.

To paraphrase Monsieur Jourdain, a character in a play by the seventeenth-century French writer Molière, you have been speaking economics all your life.

But granted the pervasiveness of economics questions, why study them systematically? After all, we are all governed by the law of gravity—try jumping off a cliff sometime if you don’t think so—but does it follow that we have to study physics?

If people don’t understand the basic laws of economics, we are headed for disaster. You don’t have to understand much physics to know why it’s not a good idea to jump off a cliff; but an economy that runs well depends on enough people grasping some simple truths about how the price system works.

As we’ll see throughout this book, a sound economy depends on allowing people to act freely. If politicians interfere with the free market, or attempt to replace it entirely with socialism, we are in for trouble.

And some people are always tempted to do this. They think that by one or another hare-brained scheme, they can promote their own welfare. Unless you understand the key elements of economics, you may fall for some of these ideas. If people do so, the economy will suffer or collapse altogether; and we may lose our freedom as well. A little time spent learning economics will help you to avoid a great deal of trouble later. ...

Recommended Readings:

Everyone who reads this book should also read Henry Hazlitt, Economics in One Lesson (Arlington House, 1979), which is much easier to understand than the present work. It is a superb account of how economic theory applies to the real world. You will also find extremely helpful Murray Rothbard’s brilliant, and very short book What Has Government Done to Our Money? (Ludwig von Mises Institute, 1990). This is a very clear presentation of Austrian monetary theory. If you want to know how the current U.S. monetary system got started, the same author’s The Case Against the Fed (Ludwig von Mises Institute, 1994) is a good place to begin.

The two greatest twentieth-century works of the Austrian School are Ludwig von Mises’s, Human Action (Ludwig von Mises Institute, [1949] 1998) and Murray Rothbard’s, Man, Economy, and State (Ludwig von Mises Institute, [1962] 1993). You will probably find them hard going, however, and you should be satisfied with reading whatever interests you in them. Rothbard is much easier than most parts of Human Action.

Probably the best way to get the flavor of Mises is to start with essays in his Planning for Freedom (Libertarian Press, 1980) and the essay “Planned Chaos” in Socialism (LibertyClassics, 1982).

About the Author:

Dr. David Gordon is a Senior Fellow at the Ludwig von Mises Institute, and editor of The Mises Review. He was educated at UCLA, where he earned his PhD in intellectual history, and is the author of Resurrecting Marx: The Analytical Marxists on Exploitation, Freedom and Justice; The Philosophical Origins of Austrian Economics, and Critics of Marx.

He is also editor of Secession, State & Liberty, and co-editor of H.B. Acton’s Morals of Markets and Other Essays. Dr. Gordon is a contributor to such journals as Analysis, The International Philosophic Quarterly, The Journal of Libertarian Studies, and The Quarterly Journal of Austrian Economics.

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