Economics, 17th Edition by Paul A. Samuelson and William D. Nordhaus is the “gold standard” in Economics textbooks to the point where nobody even questions the basic premises. Originally written in 1948, and revised periodically, it is now in its 17th edition. Think about the real sciences – Physics, Chemistry, and how much has been learned and discarded in that time. But not Economics.

Samuelson’s Economics is Keyesian. What’s not to love about it? It is convenient and fits well with the popular belief that all the men are good looking and all the children are above average [1]. Tax and spend your way to prosperity is a politician’s dreams come true. Let the good times roll. There is a free lunch.

Keynesian economics was adequate until the wheels started to fall off the economy. But now, there are cracks and fissures appearing. The explanations in the book don’t explain what is going on around us. Important highly-visible and powerful Economists are saying that they are surprised by the current situation. So the fix must be to apply more of “it” – whatever it is. The notion that the previous actions might have caused the problem in the first place are not being examined. Real experience and data are discarded as anomalous as they don’t fit the Keynesian theories.

Even the award is wrong – Nobel did NOT award a prize for Economics as he didn’t think the subject merited this recognition. Paul A. Samuelson was awarded …

In today’s financial times, it is becoming increasingly clear that, maybe, there ought to another economic worldview. Emperor Samuelson has no clothes…

Make way for citizen academics. Just like citizen journalism, there is a new wave of academic work being done and distributed via the internet by folks without doctorates and accreditation. This is their field of interest. Many have other lives – successful businesses, Engineering degrees, and a real world perspective of world markets and the global financial system. In other words, excellent sources of information.

The Other Economics

There is another explanation that has been put forth and does a much better job of describing a predicting the current outcomes. Though not as high profile, Austrian economics has been studied in parallel with Keynesian theories.

… more to follow

There are many great resources about Austrian economics on the Mises Institute site. I’m just picking something that sounds like it might have basic information geared to someone just getting into this. As I find passages that are interesting, I transcribe them and post them. Unfortunately, most of the documents are in PDF format and therefore, horrible to read online, so progress is slow.

As long as men continue to view goods and services as a package of labor or the sum of the costs of production, they will continue to turn to government for subsidies, handouts, privileges, guaranteed incomes and the like. The more this is done, the less chance there is to trade for gain in the open market – the only system of pricing that conserves rather than wastes scare resources. Chief and foremost among those scarce resources is man, not for his capacity to consume as the socialists imply, but for his productive power to serve himself by serving others.

Free Market Economics: A Basic Reader
Irvington, NY: FEE, 1974. Bettina Bien Greaves
http://mises.org/books/reader.pdf

Valuing man for his capacity to consume is no longer limited to socialists. The Democrats have long been for subsidies, handouts, privileges, guaranteed incomes and the like. Even the current Republican administration is on this consumption-advocating bandwagon. We have come a long way since this document was published in 1974.

But on the bright side, there is a way out of this mess – trade for gain in the open market – the only system of pricing that conserves rather than wastes scare resources … [man's] productive power to serve himself by serving others.

It may be difficult to get there from here, but it will be worth it.

Austrian economics – economics for the rest of us. The notion that economics must some how account for masses of people with individual interests, needs and motivations sounds messy but realistic. Like the human body – it is there working smoothly before your very eyes. But poke around and you realize that this is an incredibly complex system with its amazing ability to function within a wide range of conditions, even when subjected to stress, uncertainty, meddling and abuse.

Rooted in the tradition of Carl Menger and Ludwig von Mises, as well as Murray Rothbard and F.A. Hayek, the Austrian School offers a rigorous and logical approach to economics that gives free markets their due and takes full account of the reality of human choice.

More than a field within economics, the Austrian School is an entirely different approach that dissents from the mainstream on method, theory, and policy. It views economic actors as unique, conscious, and freely choosing individuals, not as undifferentiated data to be manipulated mathematically or politically.
–Mises University

from DealBreaker

newsletter published by the Ludwig Von Mises institute, the foremost center for Austrian economics in these United States. Each year around this time our favorite edition of the newsletter was printed, the Christmas issue. It usually presented some contrarian take on a famous Christmas story. One year it might be the economics of Santa’s workshop. Another year the feature story was about the entrepreneurialism of shiny red noses. Another year about Scrooge’s generosity.

Learn more…

Ludwig von Mises Institute
“Within the market society each serves all his fellow citizens and each is served by them. It is a system of mutual exchange of services and commodities, a mutual giving and receiving.” – Omnipotent Government

LewRockwell.com