You must know basic economics in order to understand historic events. Human Action is the basic book. Economic laws determine the way people cooperate by exchanging property rights, by dividing their labor, and by subjectively calculating prices.
The Federal Reserve Chairman, Bernanke, calls a fall in purchasing power of the dollar by over 95% stable. Interest rates have been pushed to zero. Continual inflation is deliberate and designed. Bernanke pretends he knows what he is doing.
Profit and loss is the heart of business and economic change. Entrepreneurs drive the market at every level, predicting future wants and taking risks with their property. Earning profits is never guaranteed.
Deposit banking rests on the bank honoring property rights. Loan banking rests on making good loans that will pay off. But when loan banking and deposit banking merged, the temptation to loan out much more than was actually in the bank arose.
Austrian economists differ from mainstream economists mainly in this way: they do not rely on mathematical models, but on understanding what causes success or failure in the real world. Opportunity costs determine the choices people make.
Instead of each person doing all of the work creating what he needs and wants, dividing the labor amongst all of us into specialties is clearly superior by increasing the productivity of labor.
First published in the December 1958 issue of The Freeman, "I, Pencil: My Family Tree as Told to Leonard E. Read" is written from the point of view of an Eberhard Faber pencil.
When government assigns positive rights to others, some of us will be forced to pay for it. No right to healthcare is a legitimate right.
A free market is just people making voluntary exchanges. Woods makes an example out of the creation of a ham sandwich. Welfare and warfare undermine the natural economic harmony of large scale social cooperation - the free market.
