The Creation of 'Economics for Real People'

Email Print
FacebookTwitterShare

When
I was a teen, I almost went to the University of Chicago, to major
in economics, because Milton Friedman was there. Through one of
those typical adolescent swings in interest, instead I wound up
at the University of Connecticut studying philosophy. For many years,
I forgot my early interest in economics.

Over
time, I became a software engineer, because I could make money at
it. In 1992, I began dating my soon-to-be wife. At the time, she
was at First Boston, working as a bond analyst. She would talk to
me about her work, which I found baffling. “What in the world,”
I wondered, “is all of this stuff she is doing? Is it just
some sort of scam?”

I
decided it would be sensible of me to find out, since it seemed
likely she would continue to bring it up from time to time. Besides,
did I really want to marry a scam artist? I began to read The
Wall Street Journal, Barron’s, Forbes, investment
books, and, after a lapse of over a decade, I again began to read
economic books.

When
choosing economists, I returned first to my old favorite, Milton
Friedman. I read Essays
in Positive Economics
,
Money
Mischief
, and Monetary
History of the United States
. I read The
Wealth of Nations
by Adam Smith, since it seemed so fundamental
to the field. I scoured the shelves at Barnes and Noble for whatever
else looked interesting, picking up a worthwhile book now and then.
Gradually, I was gaining an appreciation for the power of the free
market and for the possibility of mischief from government interventions.

One
day, I saw a book on the shelf named The
Road to Serfdom
by F.A. Hayek. I had heard it mentioned
a few times in the press, so I bought it.

The
Road to Serfdom was one of a few books in political economy
that truly was world shaking for me. Suddenly, the progress of the
US political economy over the last century was comprehensible, as
well as its relationship to socialism, fascism, and communism. I
began to understand the worst problem with economic planning: I
had known before that it could lead to inefficiencies, but now I
saw its connection to totalitarianism. I avidly began to search
out other books by Hayek. Over the next several years, I bought
and read most of the Hayek in print, including every volume of the
Collected
Works
.

While
doing so, I ran across the name “Mises” a number of times.
He was some ancient figure, who used to teach Hayek, or something
of the sort. I would occasionally see a book by him in a catalog.
“Must look into him sometime,” I would tell myself.

In
the meantime, I continued to read Hayek and other economists, such
as Ronald Coase, Gary Becker, and David Friedman. I felt I was beginning
to get a handle on the subject, and tried my hand at writing a couple
of pieces on economics and software for a software magazine, Dr.
Dobb’s Journal, for which I had already written technical pieces.

The
first of the economic pieces
discussed the work of Stan Liebowitz
and Stephen Margolis in debunking “path dependence” theories,
the sort of thing pulled out to criticize the market for having
settled on the Windows software standard “too soon.” I
forwarded the article to Stan Liebowitz. He liked it!

It
turned out that he and Margolis were working on a book on the topic,
Winners,
Losers, and Microsoft
. I offered to read it for them. I
read through two pre-release versions and sent Liebowitz my comments
on each. I wound up in the acknowledgements as one of the two “software
veterans” who had helped on the book.

The
encouragement this offered me was tremendous. Here was a real economist,
and he thought it was worth his time to talk to me! My gratitude
to Stan Liebowitz for his patience with a neophyte is enormous.

My
wife, also, was very patient, even indulgent, of my renewed interest
in economics. She had heard me mention Mises several times as being
on my to-read list, and for Christmas of 1999 she bought me Human
Action

on tape
.

My
drive to work, then as now, was about 50 minutes long. I immediately
began playing the tapes during my commute. After about three days
of listening, I said to my wife, “This Mises fellow is something
else! I can’t believe how many ideas are in that book.”

As
I continued to listen, my experience was that of having lived in
a dark room for years, then suddenly having someone flip on the
lights. (And no, I don’t mean that Human Action made my eyes
hurt a lot.) I had stumbled around my “economics room”
for quite a while, so I could avoid running into most of the furniture,
and I knew what a lot of it felt like. Suddenly, however, I could
see the furniture and grasp its orderly arrangement. Things
of which I had only a vague impression, from groping around in the
dark, now were plainly visible to me.

My
confidence was increasing, and I thought to myself, “Self,
you should write a bit more on economics.” I searched the Web
for “Mises,” and found the Ludwig
von Mises Institute
and the daily articles feature of their site.
I quickly updated my other economics piece
from Dr. Dobb’s Journal and submitted it to Jeff Tucker.
Oddly enough, he had already seen it on a third web site and liked
it. He accepted it immediately.

Several
encouraging e-mails in response to that piece spurred me on. I began
to write more for mises.org. I also sought out teachers. I signed
up for seminars at the
Mises Institute
, seminars at FEE,
courses at SUNY Purchase, meetings of the Southern Economic Association,
and so on. (Here, I should remark on the kindness and openness of
the entire Austrian community to a newcomer.)

I
went through Human Action four times on tape before we sold
the truck with the cassette deck in it. I also began to purchase
more books on Austrian economics. Two of the first ones I bought
were Man,
Economy, and State
, by Murray Rothbard, and Principles
of Economics
, by Carl Menger.

Comparing
three masterworks of Austrian literature, by Mises, Menger, and
Rothbard, gave me the inkling of an idea. The basics of Austrian
economics were not esoteric. Instead they were based on the logic
of human action itself, something everyone experiences firsthand.
Furthermore, the results of examining that logic were of great significance,
and were something that I thought would interest anyone who took
the time to understand them. Both on the level of personal behavior
and public policy, an understanding of human action can debunk much
cant and nonsense. In a time where human society seems to be spinning
out of control, what could be more important?

I
felt it should be possible to present the fundamental ideas of economics
in a way that didn’t require a sophisticated knowledge of the social
sciences or philosophy. Any person who acts, I thought, can come
to grasp them. I began to sketch out my ideas for what such a book
would be like.

Well,
whether serendipity smiled sweetly on me or my wife paid off the
Mises Institute in order to keep me out of her hair, right about
that time I received an e-mail from Lew Rockwell. It said (I paraphrase),
“Gene, we’d like you to write an introductory book on Austrian
economics. Would you be interested?” I told Lew I had already
started. Economics for Real People
officially was born that day.

In
writing the book, I tried to keep my original goal always in mind.
I have tried, always, to present the principles of economics in
terms of the actual categories through which real humans view the
world. In later editing passes, I ripped out passages that, although
I thought they were sound, were irrelevant to my basic purpose.
Hopefully, my book presents an economics that truly deals with real
people, not statistical abstractions.

I
suspect I have failed at times, and have wandered off of my narrow
trail into swamps and thickets. But I hope the times I was successful
more than make up for the meandering.

Economics
for Real People is a travel journal, a report on the sights
seen so far in an ongoing adventure. It is intended for anyone who
is willing to think about living in human society. As Bishop Berkeley
said in The
Principles of Human Knowledge
, “I am willing to be
understood by everyone.”

Therefore,
everyone should buy the book. If sales do
not reach six billion copies soon, I’ll know that some of you are
not paying attention.

June
13,
2002

Gene
Callahan [send him mail],
the author of Economics for Real People, is
an adjunct scholar of the Ludwig
von Mises Institute
and a contributing columnist to LewRockwell.com.

Gene
Callahan/Stu Morgenstern Archives

Email Print
FacebookTwitterShare
  • LRC Blog

  • LRC Podcasts