The Creation of 'Economics for Real People'

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 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