Basic Economics

I finished listening to Thomas Sowell's Basic Economics today, and considering my last article was very short, I've decide to write a quick review on the book.

Also, for those TJ Maniacs, don't worry he'll be back this week after having some computer problems last week.

Sowell has taught Economics, "the study of scarce resources with different uses," at Cornell, Amherst and Cal-LA, currently he is a scholar in residence at the Hoover Institution at Stanford.

I don't have my copy of the book here at school, so I can't do a thorough review, but here are some of the main points explored in the book:

• Prices are essential and price controls always cause shortages. Using hotel rooms as an example: after a hurricane hits many people leave their homes and try to find a hotel somewhere. If the hotel kept the normal low price a family of four or five may choose to rent two rooms, causing the supply of rooms to drop. However, if the price is raised sufficiently, the family will probably choose to use just one room, this allows some other family to use the other room.
• Centrally planned economies cannot succeed. Simply: a farmer knows a helluva lot more about what to plant on his farm than a bureaucrat 1,000 miles away ever can. More complicated: most resources have different uses, with prices they will be put to the use that is most needed, because the low supply will cause the price to rise, if the economy is centrally planned these resources are likely to be misused and there may well be shortages of food, while something like ethanol is in full supply.
• Speculators help, a lot. A commodity speculator effectively takes all risk off the farmer, by signing a contract agreeing to pay that farmer a set price for the commodity, regardless of the eventual real price. Because of this, the farmer takes no risk if the price soars, and the speculator, through a diversified portfolio of commodities, can also reduce his risk
• In international trade there are no 'winners,' or 'losers,' and a lot more jobs are gained then lost. For example, because it is 'free' trade, there can be, by definition, no loser (both parties agree on terms, so both win). Because of this even if some jobs are lost many more jobs are created by the excess of profits.
  

Sowell goes over these points (in much better detail) and many others in the book. It is written very well, and is never hard to understand, thankfully, considering the nature of the book. It is also written with many references and real-world and business examples, that add to the enjoyment of the book while verifying its contents.

Two Must-Reads

I finished Secrets of Libertarian Persuasion last week, and read How Capitalism Saved America last month; here I’ll review these books.

Secrets of Libertarian Persuasion

This book was written by Michael Cloud a motivational speaker and speech writer who ran for the senate seat against John Kerry in 2006 and managed to garner 20% of the vote. He writes a column for the liberator online and made some tapes on political persuasion in the late 80’s.

He’s says he reads 100 books per year, since he slowed down, and its proved with his many book recommendations in the book, he uses this knowledge to effectively show how to increase your chances of converting people to libertarianism.

Some things he recommends:

• Pick people who are likely to listen to you. If you pick die hard liberals or religious conservatives it’s unlikely you can convert them, instead pick an independent or someone who you know well.

• Don’t get in people’s face, no one’s likes this and it usually hurts your chances.

• Use comparative arguments: if you can’t convince someone that drugs should be legalized have them tell you why they think guns should be and use their own arguments with drugs, etc.

• Talk the same way, he knows salesmen who have tripled their commissions by simply using the same volume, speed and pitch of the person to whom their talking.

• Finally, a lot of debates about libertarianism end with, “…but there’s no way that would ever be able to happen!” Cloud recommends two things for this: What if and the magic button. He recommends you say, but what if it could happen or what if you had a magic button that could make it happen? When people are forced to agree with you under these terms they break-down and tend to agree with libertarianism.

These (explained much better) and more are available in the book, plus when you buy it from the above link you support The Advocates which has been spreading the word for thirty years.

How Capitalism Saved America

The author, Thomas J. DiLorenzo, is a columnist for LewRockwell.com and his written a few books before, including two arguing that Lincoln was one of our worst presidents and an upcoming book arguing Alexander Hamilton was bad (Amazon link). This books was actually endorsed by Ron Paul, Lew Rockwell and, Larry Kudlow.

DiLorenzo goes over many time periods I American history and shows how Capitalism helped America or the opposite (either Mercantilism, Socialism or New Dealers, all are the same pretty much) hurt America, some things he goes over are:

• When the Pilgrims came they all worked for the collective and they were starving, Sir Thomas Dale came over and started private property where each colonist had to work for his own food and the colonists were prosperous almost immediately.

• The Americans who started the Revolution were for liberty (or capitalism as we would call it today) and were against the mercantilism run by England’s parliament (which is pretty much the same as socialism).

• ‘Robber Barons’ in the late 1800’s and early 1900’s were supposedly greedy, but they actually created jobs for millions of Americans and drove the prices of every day goods down.

• Anti-Trust laws are always bad, and there has literally never been a case where anti-trust helped ordinary citizens and wasn’t pushed through by the competition or special interest groups.

• It is common knowledge that Herbert Hoover’s Laissez Faire economic policies caused the Great Depression. However, it is a fact that Hoover’s response to a recession with more government caused the depression, and Franklin Roosevelt’s socialist policies kept the unemployment rate high and the economy in the dumps for twenty years.

In addition to the above DiLorenzo explains Capitalism, explores the never-ending war on it and shows hoe price controls caused the 70’s energy crisis. The book is a great addition to any bookshelf, in history and economics, but be aware that DiLorenzo tends to write with anger and sarcasm at some points, which made me weary after reading more than 3-4 chapters in a row.

I finished The Fountainhead last week, so that review is coming up next, please visit our Book Store,/a> for more book, music and movie recommendations.

Roark is a soon to be college student who has gotten by this summer by reading books as much as possible.

Most Influential Books

Before starting with articles TJ and I have written reviews on the five books, which influenced us the most.

TJ's

A Republic, Not an Empire: Reclaiming America's Destiny By Pat Buchanan

I credit Pat with getting me interested in politics. I loved watching him beat down Leftists on the show Crossfire.

Even though at this time in my life, my political beliefs tend to lead to a much smaller government then Mr. Buchanan, I do see eye to eye with him on staying out of foreign entanglements. For those who don’t know, A Republic, Not an Empire, is a well researched book on America’s foreign policy over the last 200 years, and it’s not hard to agree with his conclusions.
I think if we want much smaller government, we must contain our politicians need to intervene in foreign conflicts not directly related to our National Security. In this book, Pat is very persuasive in his attempt to show you how our foreign policy has led astray from what our Founders had intended.

What It Means to Be a Libertarian. By Charles Murray

This Charles Murray book gets the credit with making me aware that I was a libertarian Republican. I knew a wanted smaller government, but after reading his book, I knew then I wanted much smaller government.

It really made me feel comfortable with beliefs of some real ‘radical’ changes in the size and scope of government.

This book will not make a Socialist turn into a Jeffersonian, but it can help a Conservative who’s wondering what happen to “Buckley-Goldwater” Conservatism.

The Fountainhead By Ayn Rand

I haven’t been much of a fiction reader, lately. However, in my early 20’s, when I read this book, I think it helped underscore my beliefs of Individualism.
If you have not read this classic, I guarantee you will end up loving the main character, Howard Roark. The best thing you can learn in the book is that selfishness is a virtue, not some demeaning character flaw.

Capitalism and Freedom: Fortieth Anniversary Edition By Milton Freidman

I saw Milton Friedman on television, when I was younger, and even though he wasn’t an animated guy by any stretch, his greatness was making economics understandable to me.

So I bought Capitalism and Freedom and it didn’t disappoint. He covers Monetary policy to the role of government in education. He is very clear in proving that ‘good’ things come from the free-market system, not the government.

The Roosevelt Myth By John T. Flynn

It has always bothered me that FDR is known as one of our greatest Presidents. If you feel this way, this is a book you should read. Flynn does a great job categorically tearing down FDR’s flawed policies. Which he rightly concludes how the New Deal made the depression worse. It details the administration with only facts that can not be contradicted.

Roark's

Before I start writing this, I'd like to point out that I have been a libertarian for approximately two months and the following books are the ones that have most influenced my thoughts on economics and liberty.

My conservative leanings have been developed from reading political books and listening to countless hours of talk radio for the past eight years.

Also, I originally put 1984 and Anthem on my list; I've decided that they are very similar and I will be replacing 1984 with What it means to be a Libertarian.

The books that have influenced me most and that I will be reviewing are (in order of my reading them):

The Politically Incorrect Guide to Capitalism

The Myth of the Robber Barons

Somebody's Gotta Say It

Anthem

What it Means to be a Libertarian

__________

The Politically Incorrect Guide to Capitalism

I believe this is the best book for putting down leftist (it may be more prudent to just start calling them Marxist) myths on the economy. It's very readable (I read it just a few months after getting my driver's license) and systematically states the liberal arguments then breaks them down using facts and common sense, two things which liberals seem to be short on these days.

Up until reading this book I kind of understood why tax cuts work and that there wasn't really a reason for liberals to whine about trade deficits. Including these two subjects the books talks about:

· Why rent control doesn't work

· Why slave labor doesn't make sense

· The Free market kills any discrimination

· Charitable givings were up 50% during the 'Decade of Greed'

· Athletes and CEOs deserve their high salaries

After reading this book I had a foundation for my philosophy, but had not yet cemented in my mind the philosophy of limited government.

The Myth of the Robber Barons

This is possibly my favorite book. I originally bought on the recommendation of the PIG to Capitalism, which spent a chapter on the same subject.

The book sets out to prove that the so called 'Robber Barons' (Rockefeller, Vanderbilt, Carnegie, etc.), helped the US and were not just ruthless and greedy, well Robber Barons.

It easily accomplishes this, but also proves another extremely important fact, that has become a huge part of my philosophy: Businesses receiving government help generally suck.

The relatively short (170 pages) book goes over 6 barons and shows how they beat the competition, which many times had government help.

Somebody's Gotta Say It

This was the first book I read that explained the libertarian philosophy of limited government.

Boortz is a talk show host in Atlanta who uses humor and a no-nonsense approach to politics in this book.

It goes over why welfare is bad, government subsidies to art, what should be taught in school, why you don't have the right to vote and many more subjects that made it the first book that really put the idea in my head of small government.

Anthem

I had read that Ayn Rand's books The Fountainhead and Atlas Shrugged were two Libertarian stalwarts, so when I needed an extra hundred pages read for English Anthem was the book I chose.

To this point I understood why small government is the best for prosperity and many economic things, but Anthem is very good at showing why collectivism will vastly stunt progress.

What It Means to Be a Libertarian

By the time I had written this book I was a self-proclaimed Libertarian, though I really only though about the Economics part of politics.

This book shows why limited government works and uses trend lines to show that in every single aspect things get worse or improve to a much lower extent after government interference.