Weekend Book Reading: Concise Guide to Economics
This is a wonderful little book. Weighing in at only 126 pages, you have no excuse for not finishing it. It is a quick read, but contains a wealth of useful and factual information. It is particularly effective in debunking some very widespread myths, such as the minimum wage law being a good thing, and “price gougers” and “speculators” being a bad thing. If you find the book to be too concise and want some more in-depth information, I also highly recommend Economics in One Lesson and Defending the Undefendable.
To understand economics is to understand the practical case for freedom. The Concise Guide To Economics is a handy, quick reference guide for those already familiar with basic economics, and a brief, compelling primer for everyone else. Jim Cox introduces topics ranging from entrepreneurship, money, and inflation to the consequences of price controls (which are bad) to price gouging (which is good). Along the way, he defends the crucial role of advertising, speculators, and heroic insider traders. The book combines straightforward, common sense analysis with hard-core dedication to principle, using the fewest words possible to explain the topic clearly. And each brief chapter includes references to further reading so those who are curious to dig deeper will know where to look next. The Concise Guide makes a great gift to those who misunderstand the case for free-market capitalism.
Tags: austrian-economics, economy
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By Fred Dent, Saturday, September 12, 2009 @ 10:08 pm
I completely agree. I read this book a couple months ago, and it is brilliant. I also agree that you should not stop here but read Economics in One Lesson next.
To the people who think the minimum wage law protects everyone and is necessary, read this excerpt from the book:
An enterprising individual starting his own business will often lose money for months, even years, prior to earning a profit on a new venture. Again, he is earning a wage much less than that mandated by minimum wage legislation. But, he is perfectly free, as an entrepreneur, to engage in such behavior–it is not illegal.
But what of the low-skilled citizen with no prospects of college training or a medical career or of starting his own business? Here the heavy hand of government literally outlaws an option freely chosen by others. A worker worth only $3.00 an hour to an employer is denied the opportunity to accept this low wage for the opportunity to learn not in the formal setting of a college classroom or a training hospital or as an actual business owner but in the workplace itself. It’s a safe bet that most readers of this page made wage gains once on the job, not by way of formal training but by way of learning and proving themselves on their jobs.
Anyone doubtful that the minimum wage law is a civil rights issue need only look at the unemployment statistics to see the truth of this question. The unemployment figures below make it clear that identifiable segments of society are being legally discriminated against–discriminated against because their low productive value places them in a position where they cannot legally choose the combination of wages and job training they may prefer.
CATEGORY UNEMPLOYMENT RATE
August 1996
Overall 5.1%
16 – 19 years of age 17.2%
Blacks 16 – 19 years of age 37.6%
25 – 54 years of age 4.1%
Source: Monthly Labor Review, October 1995
Given this analysis it must be asked why are what I’ll call “effective-wage rights” denied to some segments of society? The answer is that denying such a right to the low-skilled has no negative political consequences. Unlike other groups, these populations generally don’t vote, don’t contribute to campaigns, don’t write letters-to-the-editor, and don’t in general make themselves heard politically–these people can be denied a civil right the rest enjoy, because they do not count politically.
The minimum wage law is a cruelty inflicted by government on a group of people who can afford it the least, while politicians reap the benefits of appearing to be kinder and gentler. It is a clear violation of the equal protection clause of the Fourteenth Amendment. In the name of the poor themselves, it is time to abolish this shameful civil wrong.