Economic Policy is a marvelous introduction to economics—and to one of the greatest economists of all time. The book contains more information than seems possible: Mises covers much of history, explodes many economic fallacies, illustrates several economic principles, and even cracks a couple of jokes.
His history lessons describe the disastrous effects of price controls in ancient Rome, the staggering increase in productivity that allowed Britain’s population to triple during the industrial revolution, and the ravages of Germany’s runaway inflation in 1923. The economic truths he illustrates include the facts that under capitalism a big business can remain big only by satisfying its customers, and that capital accumulation is the primary economic determinant of progress. Among the myths he shatters are Marx’s iron law of wages, the notion that political and economic freedoms are unconnected, and the claim that capitalism causes class conflict. He restates the false alternative of “planning vs. no planning” as: totalitarian dictates vs. individual planning. He traces the effects of price controls on milk as a demonstration of the principle that controls breed more controls.
The simple examples that this powerful thinker uses are well chosen. In contrasting the way capitalism and socialism serve the consumer, he notes that one will see “Thank you, Come Again” signs in the U.S. stores—while in “socialist 7 countries, It IS not the seller who has to be grateful, it is the buyer.” To those who say he IS opposed to the government since he does not want It to Intervene m economics, he replies that his opposition to drinking gasoline does not mean he is against using gasoline properly.
If you want to help stave off our descent into self-imposed impoverishment, read this book and send a copy to your economic policy-makers.
This review is made available by the Ayn Rand Bookstore (formerly Second Renaissance Books)