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Indian Libertarians

Beginning with Economics: Lessons for the Young Economist by Robert P. Murphy

admin Saturday March 30, 2013

One of the frequent questions that we meet is that from where and how to start learning economics. We all know economics is a science which is we believe is essential for each one of us to know and understand as it affects our lives. Economic science consists of different schools of economic thought differing in method, approach and philosophy. Each of these schools differs in variety of approaches and their method in studying various phenomena.

 

The term "economics" which we use implicitly refers to the present economic theories and practices of the Keynesian school of economic thought. It is also called as Keynesian Economics. The Keynesian theories are based on the work of British economist John Maynard Keynes.  The Keynesian methods are based on extensive use of mathematical and statistical models. These models are explained using Keynesian economic terms, technical jargon and complex models which are beyond the understanding of the most men. The Keynesian economists try to study and explain economic phenomenon using a term called as aggregate demand (total spending in the economy). The other popular economists whose views we often hear in the mainstream media are from the Chicago School of Economic thought. The Chicago School Economists again uses mathematical models and statistics models extensively just like their Keynesian counterpart. The Chicago School theories are based on the concept of rational expectations. They emphasis that it is necessary to judge the results of specific actions would yield and not judging them simply on basis of their intention. The Chicago School economists majorly concentrate on what will be the optimum money supply in the economy. Once again for the average uninitiated people; who has little idea about economic science; the theories of Chicago School may sound highly technical and difficult to comprehend just like that of the Keynesians.

The oldest, smallest, most precise and now the fastest growing school of economic thought is the Austrian School of economic thought. Unlike the Keynesian and Chicago School economists; the Austrian School bases its study of economic phenomena on the interpretation and analysis of the purposeful actions of individuals. Thus it easily avoids complex mathematical models to explain what exactly is going on. Hence it becomes pretty easy for us to comprehend what exactly is going on with the economy. More over unlike the Keynesian and Chicago School, the Austrian economic theories can be applied to most aspects of our lives beside money and market. Ludwig Von Mises explains:

 

"Economics is not about goods and services; it is about human choice and action."

Another famed Austrian Economist and philosopher Dr. Murray N. Rothbard says:

 

It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.

For those seeking bare minimum understanding of economics as well as those who wish to build a strong foundation of economic understanding and reasoning we suggest starting with Lessons for the Young Economist by Robert P. Murphy.

Out of the various books on economics for beginners; we find this book written precisely keeping the audience in mind. Robert P. Murphy did extremely well to keep the language as simple as possible. The simplicity in presentation of the content itself is praise worthy for it's not an easy task to do so. Robert Murphy in this book says:

 

The ability to think like an economist is a crucial component of your education. Only with sound economic thinking will you be able to make sense of how the world works. To make responsible decisions regarding grand political ideas as well as your occupation and mundane household finances, you must first decide to learn basic economics.

You may download the (free) ebook (.epub file format) from this page:

http://mises.org/document/5706/Lessons-for-the-Young-Economist

or you may visit the Ludwig Von Mises Institute website for further information on Austrian Economics.

http://www.mises.org

You may also read this book online in html format here:

http://www.vforvoluntary.com/young-economist/

Here is another recommended list of reading materials for those who wish to pursue Austrian Economics: http://www.libertyclassroom.com/learn-austrian-economics/

Its better to be informed than remain ignorant.