Want to Learn Economics?

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We cannot avoid economics. We all make money, sell things, buy things, and pay taxes (unfortunately!). But this does not mean everyone understands economics. This is evident from the numerous news articles discussing things like minimum wage, inflation, and the housing crisis. This is even more evident when hearing politicians speak. Whether or not they believe what they are saying, politicians from both sides of the spectrum appear completely ignorant of basic economics.  

This does not mean economics is difficult. Though the subject can get complex, everyone can learn the basic principles of economics. Unfortunately, you will not receive good economic instruction from our modern educational system. Most high schools and colleges do not require economics courses, and if they do, they often teach unsound economics. You will have to go elsewhere for good economic education. Thankfully, there are good resources out there, and many of them are free. And it’s never too late to start learning the subject. 

Free-Market Capitalism

I want to be up front with where I am coming from. I am a free-market capitalist, and I subscribe to the Austrian school of economics. Like all good capitalists, proponents of the Austrian school believe the state should protect private property and avoid interfering with the market. However, Austrians also believe that currency should be backed by a commodity such as gold (or better yet, the commodity should serve as the money itself), so as to prevent the devaluing of the currency through inflation (as the Fed does regularly).

The Austrian school can be contrasted with the Keynesian school of economics, which follows the teachings of John Maynard Keynes. Most of our politicians today are Keynesians, as seen in their use of massive debt to fund government programs. These politicians advocate an expanded state that spends in order to stimulate the economy. In order to fund this, the state must continually borrow money and magically create funds through its central bank, the Federal Reserve.

I believe the Austrian school is the most common sense approach to economics. It holds that the state is not free to act differently than any individual in regard to economics. (No person can just keep taking out loans and printing more money without serious repercussions.) I will therefore be advocating resources from the Austrian position.

The Hand of God

Contrary to the myths of our day, free-market capitalism is good for everyone. The economy is a beautiful system that has a natural way of working itself out. This should not surprise us though, as God designed us and our world to involve economic transactions. God told us to have dominion over the resources of this earth (Gen 1:28), and He gave us property rights (“Thou shall not steal”). We are to use the land and its resources to produce things, which we can sell and trade to one another.

When the market is left free from government intervention, people sell their produce (which includes labor) to one another, and everybody wins. That’s why the Western world is as materially well off as it is today. The only time the government should step in is to regulate wrongdoing, such as theft. Unfortunately, modern governments seek to regulate and tax every aspect of the market, benefitting special interest groups but making it harder on everyone else.

Resources for Economics

As for learning economics, videos are a great resource. For a free two-hour video, check out R.C. Sproul Jr.’s Economics Has Consequences. This is a simple and interesting introduction to economics from a biblical perspective. This two-hour video is an abridged version of Sproul’s DVD series Economics for Everybody: Applying Biblical Principles to Work, Wealth & the World. This 12-part DVD series includes a study guide as well. This is a good series for church groups and homeschoolers.

Mises.org is the place to go for free articles and video lectures on economics from the Austrian perspective. You can also check out the free libertarian/Austrian economics podcast by Tom Woods. For entire adult-level courses on economics, you can subscribe to Woods' site Liberty Classroom for only $90 per year. Ron Paul Homeschool offers a 12th grade economics course as well. 

For anyone who seriously wants to study economics, you will want to read books on the subject. Let me recommend a few.

Economics in One Lesson by Henry Hazlitt. This is the best short introduction to economics. It was last updated in 1979, but it is still as relevant as ever. Hazlitt stresses the Law of Unintended Consequences, which shows how laws and policies regulating economics sound great until the full consequences are later seen. His main point is that a good economist looks at both the short-term and long-term consequences of a policy on all groups—not just one group. This principle would solve most of the problems associated with shortsighted policies like minimum wage, tariffs, subsidies, etc. Hazlitt further argues that government should manage its finances the same way an individual person should, meaning they should not be accumulating massive debt. Gary North has written a Christian version of this book, Christian Economics in One Lesson, which is available for free online. 

Lessons for the Young Economist by Robert Murphy. This is a textbook designed for middle school or high school students. It is an easy-to-read work by one of the best Austrian economists of our day. (You can get it online for free.) There is also a teacher's manual. Murphy is not only skilled at explaining difficult concepts, but he also makes economics interesting. Murphy also does a weekly podcast with Tom Woods called Contra Krugman, where they critique the weekly New York Times article of Keynesian economist Paul Krugman. Murphy has a number of other great books, including The Politically Incorrect Guide to CapitalismThe Primal Prescriptionand Choice

How Capitalism Saved America by Thomas DiLorenzo. This book is a combination of history and economics, making it an interesting resource. DiLorenzo is an economics professor who is also a history buff. He has also written books critical of Abraham Lincoln and Alexander Hamilton, making him quite the controversialist. While this work is not an introductory book on economics, it explains and defends capitalism. The first two chapters, (1) What Is Capitalism? and (2) Anticapitalism, are priceless. They explain how capitalism has benefited all of us and why so many people continue to attack capitalism. As DiLorenzo shows, capitalism made America great. The problems with our modern economy do not result from capitalism but from government regulation and businesses in bed with government ("crony capitalism"). 

This may be overwhelming if you are new to economics, so let me summarize. If you are looking for resources for church or homeschool, go with Sproul's DVDs. (Homeschoolers should also consider Murphy's textbook and Ron Paul Homeschool's 12th grade course.) If you are interested in personal study, get Hazlitt's Economics in One Lesson, and then check out Mises.org and the podcasts Contra Krugman and the Tom Woods Show. Enjoy!