Missouri's 7th District, U.S. House of Representatives




Congressional Issues 2010
Economic Theory for the American Free Enterprise System

The 112th Congress should
  • reject all manifestations of socialist economic theory and return to the principles of "laissez-faire" capitalism that raised the American standard of living to the highest in the world.

Kevin Craig supports capitalism and opposes all forms of socialism. Capitalism (also called "Free Enterprise," "Free Market," and "Laissez-faire" economics) has brought human beings the highest standard of living. Socialism brings poverty and tyranny. Both Republicans and Democrats favor various levels of socialism.

Socialism is institutionalized theft. It destroys the incentive for productivity, and reduces the living standard of us all.

What is "Austrian Economics?" (Answer: Free Market Economics)

This theoretical school differs from other schools of economics because it does not deal with aggregates, large numbers, or historical data. It uses a micro rather than a macro approach to economics. It traces all economic phenomena back to the actions of individuals -- to their subjective values and to the value each market participant places on the marginal utility of a particular good or service. The Austrians view the world economy as a giant auction in which everyone is always bidding for the various goods and services he or she wants by offering something he or she has. By starting from the viewpoint of the individual actor and by reasoning logically step by step, Mises and his fellow Austrian economists were able to explain the development of prices, wages, money, production, trade, and so on.
Bettina Bien Greaves, "Foreword,"
Interventionism, An Economic Analysis, by Ludwig von Mises

An Introduction to Economic Reasoning

These three books, all relatively short and available online or for purchase, are an excellent starting point for an education in sound economics.
Economics in One Lesson by Henry Hazlitt; online here
Essentials of Economics by Faustino Ballve; online here (.pdf)
An Introduction to Austrian Economics by Thomas C. Taylor; online here and here (.pdf)
A useful companion to Hazlitt's Economics in One Lesson is this series of videos, recorded in July-August 2008, in which various professors comment on each of the book's chapters — explaining the argument, elaborating on it, and applying it to present conditions.
Video 1: The Lesson
Video 2: The Broken Window
Video 3: Public Works Mean Taxes
Video 4: Credit Diverts Production
Video 5: The Curse of Machinery
Video 6: Disbanding Troops and Bureaucrats
Video 7: Who's Protected by Tariffs?
Video 8: "Parity" Prices
Video 9: How the Price System Works
Video 10: Minimum Wage Laws
Video 11: The Function of Profits
Video 12: The Assault on Saving
Additional Introductory Reading in Economics
Study Guide to Human Action: A Treatise on Economics (PDF)

It has been a work years in the making, but finally the Study Guide to the Scholar's Edition of Ludwig von Mises's Human Action, is available. You can order the handsome volume here, and — as we've come to expect — the Mises Institute is generously providing the entire book free for download.
The Revolution: A Manifesto by Ron Paul, ch. 4; the audiobook is here
The Concise Guide to Economics by Jim Cox
Making Economic Sense by Murray N. Rothbard
Pillars of Prosperity: Free Markets, Honest Money, Private Property by Ron Paul
Economic Policy: Thoughts for Today and Tomorrow by Ludwig von Mises
Free Market Economics: A Reader by Bettina Bien Greaves
The Politically Incorrect Guide to Capitalism by Robert P. Murphy
Free Market Economics: A Syllabus by Bettina Bien Greaves
The Church and the Market: A Catholic Defense of the Free Economy by Thomas E. Woods, Jr.
Whatever Happened to Penny Candy? by Richard J. Maybury (a great introduction to economics for homeschoolers; study guide included)

Introduction to Austrian Economic Analysis: A Ten-Lecture Course

This course with Professor Joseph Salerno of Pace University, courtesy of the Ludwig von Mises Institute, is available in both video and mp3 audio at the links below. To learn more about the Austrian School of economics, read this essay and this essay.

Recommended supplemental reading follows each lecture.
      Lecture 1: Scarcity, Choice, and Value — Audio and Video
Percy L. Greaves, Jr., Understanding the Dollar Crisis, pp. 1-20, 27-54
Milton M. Shapiro, Foundations of the Market-Price System, pp. 81-113
Thomas C. Taylor, An Introduction to Austrian Economics, pp. 40-51 (ch. 4)
      Lecture 2: Exchange and Demand - Audio and Video
Shapiro, pp. 31-58, 115-78
Taylor, pp. 12-39 (chs. 2-3)
Leonard Read, "I, Pencil"
      Lecture 3: The Determination of Prices — Audio and Video
Greaves, pp. 65-91
Shapiro, pp. 179-233
Taylor, pp. 52-62 (ch. 5)
Murray N. Rothbard, The Mystery of Banking, pp. 15-27 (online pp. 14-23)
      Lecture 4: Price Controls: Case Studies — Audio and Video
      Lecture 5: Profit, Loss, and the Entrepreneur — Audio and Video
Taylor, pp. 74-89 (ch. 7)
Ludwig von Mises, "Profit and Loss," in Mises, Planning for Freedom and Sixteen Other Essays and Addresses, pp. 108-30
      Lecture 6: Pricing of the Factors of Production and the Labor Market — Audio and Video
Henry N. Sanborn, What, How, For Whom: The Decisions of Economic Organization, pp. 112-85
Taylor, pp. 63-73 (ch. 6)
Greaves, pp. 105-32
Murray N. Rothbard, "Restrictionist Pricing of Labor," in Rothbard, The Logic of Action Two
      Lecture 7: Capital, Interest and the Structure of Production — Audio and Video
Shapiro, pp. 235-60
Mark Skousen, The Structure of Production, pp. 133-49
Richard Fink, "Economic Growth and Market Processes," in Fink, ed., Supply-Side Economics: A Critical Appraisal, pp. 372-94
      Lecture 8: Competition and Monopoly — Audio and Video
Shapiro, pp. 319-72
Sanborn, pp. 62-65
Hans Sennholz, "The Phantom Called 'Monopoly,'" in Bettina B. Greaves, ed., Free Market Economics: A Basic Reader, pp. 162-69
Sudha R. Shenoy, "The Sources of Monopoly," in New Individualist Review, pp. 793-96
      Lecture 9: Money and Prices — Audio and Video
Greaves, pp. 141-67
Rothbard, What Has Government Done to Our Money? pp. 1-96 (online, chs. I-III; online .pdf, pp. 7-48).
Rothbard, The Case Against the Fed, pp. 29-69 (or Rothbard, The Mystery of Banking, pp. 77-177; online, pp. 52-108)
      Lecture 10: Banking and the Business Cycle — Audio and Video
Ludwig von Mises, et al., The Austrian Theory of the Trade Cycle and Other Essays, Read: Garrison, Introduction and Summary;
     Mises's essay and Rothbard's essay.
Taylor, pp. 90-95 (ch. 8)

Advanced Texts in Austrian Economics
     Man, Economy, and State: A Treatise on Economic Principles by Murray N. Rothbard
The Scholars' Edition of this book, which we link to, also contains the book Power and Market, which had originally been intended as the concluding section of Man, Economy, and State but was released in 1970 as a separate book. The entire text is also available online here. A study guide is available for purchase and online here (.pdf).
     Human Action: A Treatise on Economics by Ludwig von Mises
This entire book is available online here. A study guide to this book is now available here.
     Money, Banking, and Economic Cycles by Jesϊs Huerta de Soto
A sweeping and historic contribution to the literature of the Austrian School, showing how monetary freedom avoids the disadvantages of fiat money, including inflation, business cycles, and financial bubbles.

Foreign Aid and Development Economics
Equality, the Third World, and Economic Delusion by Peter Bauer
From Subsistence to Exchange and Other Essays by Peter Bauer
"The Marshall Plan: Myths and Realities" (.pdf) by Tyler Cowen
The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics by William Easterly
"The History of Foreign Aid Programs" (mp3) by Thomas E. Woods, Jr.
Miscellaneous Readings in Economics
"Politically Contrived Gasoline Shortage" (.pdf) by Craig S. Marxsen
"The Anatomy of Social Security and Medicare" (.pdf) by Edgar K. Browning
Losing Ground: American Social Policy, 1950-1980 by Charles Murray
The Conquest of Poverty by Henry Hazlitt
The Economics and Ethics of Private Property (advanced) by Hans-Hermann Hoppe

Learn Austrian Economics | Tom Woods

The Role of Government in the Economy

Dr. Mary Ruwart has written a wonderful book entitled Healing Our World. Here are links to the old edition of this book.

Chapter 1. The Golden Rule
We are well aware that if we commit certain violent or aggressive actions against our neighbors, fighting and impoverishment will result. Somehow we think these same actions create peace and plenty if applied to our community, state, nation, and world.

Chapter 2. Wealth Is Unlimited!
Wealth is created when we use existing resources in new ways. Since creativity is virtually limitless, wealth is too. Government does not increase creativity or wealth. It only redistributes wealth to the winning voters and the most powerful lobbies.

Chapter 3. Destroying Jobs
When we use aggression to increase the wealth of disadvantaged workers, we succeed only in making them poorer.

Chapter 4. Eliminating Small Businesses
"Only in America" could penniless immigrants become affluent by starting their own businesses. Today, our aggression keeps the disadvantaged from following in their footsteps.

Chapter 5. Harming Our Health
Licensing of health care services gives us the illusion that we are protected against selfish others who would defraud us. Instead, our aggression boomerangs back to us, costing us our wealth, our health, and our very lives.

Chapter 6. Protecting Ourselves to Death
By using aggression to avoid medications that might harm us, we lose access to life saving drugs.

Chapter 7. Creating Monopolies that Control Us
Most monopolies are not created by selfish others, but by our own aggression.

Chapter 8. Destroying the Environment
We are more likely to protect the environment when we own a piece of it and profit by nurturing it.

Chapter 9. Banking on Aggression
We established the "money monopoly" in the hopes of creating economic stability. By using aggression as our means, we created boom-and-bust cycles instead.

Chapter 10. Learning Lessons Our Schools Can't Teach
How can our children learn to abhor aggression when we teach them in a system built on it?

Chapter 11. Springing the Poverty Trap
When we use aggression to alleviate the poverty caused by aggresssion, we only make matters worse.

Chapter 12. By Their Fruits You Shall Know Them
It's just as well that our aggression creates poverty instead of wealth. Otherwise, we'd be eternally at war with each other!

Chapter 13. The Other Piece of the Puzzle
Justice does not consist of punishing the aggressor, but of making the victim whole.

Chapter 14. The Pollution Solution
Restoring what we have harmed is the best deterrent of all!

Chapter 15. Dealing in Death
Using aggression to stop drug abuse kills more people than the drugs themselves!

Chapter 16. Policing Aggression
We can protect ourselves from aggression only by refusing to be aggressors ourselves.

Chapter 17. Putting It All Together
The practice of non-aggression domestically creates a peaceful and prosperous nation.

Chapter 18. Beacon to the World
The most effective way to help poorer nations is to practice non-aggression.

Chapter 19. The Communist Threat Is All in Our Minds
Using aggression domestically creates a foreign enemy here at home.

Chapter 20. National Defense
The best defense against foreign aggression is the practice of non-aggression domestically.

Chapter 21. A New Age or a New World Order?
Once we understand how global peace and prosperity are created, we cannot be easily fooled.

Chapter 22. How to Get There From Here
If each of us works on the piece of the puzzle that appeals to us most, the final picture will reflect the composite of our dreams.

What role should the government play in our daily affairs?

Let's look at the different departments of government and see if they play a legitimate role in our economy.

So how much should government be involved in our economy?

Much less, to start; eventually, none.

If you believe the government should be involved in a certain aspect of our economy, type your suggestion in the box below. I will send you a link to the webpage that shows how "The Government" can be replaced by self-government and trust in "Divine Providence."

next: Prosperity: The Pursuit of Happiness