Customer Reviews

The Economic Way of Thinking (9th Edition)

5 star:		(11)
4 star:		(2)
3 star:		(0)
2 star:		(2)
1 star:		(3)

 

 

Heyne begins w/ the first principles of economics: how human beings interact on a mass scale, and the positive consequences of those actions, and the negative consequences of interferring w/ voluntary human interaction. He then carries the reader through the traditional economic concepts of Supply and Demand, Specialized Labor, Externalities...all focused through the lens of the "Economic Way of Thinking".

Make no mistake--this book is a substantive, philosophical refutation of "Statism". Heyne hits Comparative Advantage, Price Theory, Rule of Law, and Private Property hard (in the affirmative), and if you're for tariffs, regulated prices, arbitrary Gov't intervention, and public property, your views won't be validated. All the more reason for you to read this book, and understand why so many stamp their foot down against politicized economic policies that superficially sound and feel so good. Heyne's lesson is to think on a macro-scale, think about the unintended consequences of mass social change, for that is the Economic Way of Thinking.

I recently took a course that used this as the main textbook. When I read the book the first time before the course started, I didn't like it at all and was thinking of dropping the course. But after the course started and the professor went over the material in greater detail, I began to understand and appreciate why the authors chose to write the book this way, instead of in the way most conventional textbooks are written -- define and explain new terms or concepts, etc.

Like other conventional economic textbooks, the Economic Way of Thinking teaches major concepts in micro and macro economics (such as supply and demand, inflation, GDP, etc.) but teaches them in a much more engaging way -- not just a collection of facts, definition of terms or concepts, etc. The authors pointed out the importance and subtlety in each new term or concept. That gave me additional insight into the material in the book. I also found the exercises at the end of the chapters very useful.

Heyne's text explains what it explains well. It is a good Freshman level price theory text. Its strengths are in explaining informational and coordination issues in markets. It does more to explain how the price system works as a communications network than any other text I have seen. It also explains the issues of property rights and transactions costs clearly.

When it comes to the public sector, it is vastly better than many other texts. There are other texts, like Gwartney and Stroup, and Ekelund and Tollinson, which are arguably better at explaining the public sector.

The biggest weaknesses of this book are in macro and international economics. Its chapters on money are ok, but it explains far too little about trade cycles. It has some good material on growth, but could explain more and in more detail. The chapter on international economics could go further as well. The shortcomings of this book likely reduce its sales. So, it seems that the marginal benefits of such revisions exceed their marginal costs.

Heyne is no longer around to revise this book, but the co-authors who took over for him could improve this book greatly for the next edition.

To counter some of the negative reviews, consider this -- they don't get it. Indeed, it was only in reading the introductions of the 10th edition that I gained a deeper understanding of what I already knew to be the brilliance of Paul Heyne. He left the academic restrictions of SMU to be granted the freedom at the University of Washington to introduce his new way of thinking about economics.

Having been taught economics by these principles it took me a long time to understand why when I talk about economics it seems to be at odds with others...my perspective is clearly different based on these fundamental principles.

Indeed, there are several compelling tributes to Paul Heyne and his approch to economic thinking: 1) There is an 11th edition...a second edition beyond his death, that bears his name, 2) The 10th edition includes a reference to Ph.D.s in economics suggesting that they had a deeper understanding of their own discipline by reading this book.

Contrary to another review, economics is NOT about charts...that's the message Paul illustrates in his concepts. Economics is a way of thinking about the world around us. Those who fail to embrace it in this way will miss the potential that it holds: helping us to understand the dynamics of decision making.

Warren Buffet once said of Benjamin Graham's Intelligent Investor: "I read the first edition of this book early in 1950, when I was nineteen. I thought then that it was by far the best book about investing ever written. I still think it is."

Allow me to paraphrase, loosely though with verity in the details. I read the eleventh edition of this book early in 2003, when I was nineteen. I thought then that it was by far the best book about economics ever written. I still think it is.

This book lit a fire in me that led me to my college major, my career, and one of my life's great passions, the study of economics. Heyne guides us with the simple but powerful idea of economics, that scarcity is the ultimate factor in all our choices. What motivates people to organize and to specialize? And, given the scarcity constraint, in what manner would we expect that they organize and specialize? The thesis recurs and builds on itself in a most elegant manner throughout the text.

I cannot say how powerful this text is. I have taken graduate courses in economics but none come close to explaining the world like this book. I have read it several times over, and all to whom I recommend this book have been equally impressed by its power and beauty.

As I mentioned this is one of the few books that has forever guided the way I think about the world. READ THIS BOOK!

I used this book as an essential study material for my MacroEconomics course at UCBerkeley. I enjoyed it immensely.

The book is organized into 22 chapters and takes you through what could be termed as a more of libertarian, laissez faire form of markets.

It begins with the assertion that it is very difficult to approach the process of economic exchange with an open mind. And that there is a need for a framework. And I agree. Then it gives you a typical example of rush-hour traffic to illustrate and then explain the importance of "agreement on certain rules" in order to ensure co-operation which facilitates transaction.

And then it takes you through the supply and demand PROCESS (rather than STRUCTURE), Elasticity, Price-searchers/takers, MR/MC, importance of price discrimination, price-controls (and perils thereof) etc and then back to the macroeconomic issues (role of Fed, Government, Treasury, inflation, externalities, regulation).

This book (as its title indicates) tends to blur the boundries between Macro and Micro.

Some of the salient features -
1) Uses more enonomics and less mathematics (Paul Krugman's approach).
2) A lot of emphasis on Marginalism.
3) Claims to be simple (e.g. The preface opens up with an important question - Why are so many introductory economics courses taught as if every student is going on to acquire a PhD in the subject?) And the book tends to live by the expectation.
4) The tone is a lot more prescriptive that you could imagine.
5) Maintains that the term Monopoly is very hard to define.
6) Goes close to Austrian school.
7) All in all approaches the economic theory as a process rather than structure.

I will certainly recommend this one to a beginner. And if you are more of left-of-center then this one is for you if you want to understand the other side of the argument.

If you need a textbook on Economic, and you do not know the theory, you HAVE to read it before you get started. It's also very usefull for businessmen. I've read it in Russian

I found this book very comprehensible which made for a quick read. The authors even have a sense of humor which made the book more enjoyable. I would definitely recommend this text for any reader or student who dreads having to read a dry, standard economics textbook. The examples are witty and relatable, making for an easy, enjoyable read.

His book is terrific, I still have my copy from 1979 and refer to it often. Professor Heyne (and the whole UW Economics department) are pretty Chicago School in their world view as a whole - but his textbook is clear and easy to use. I highly recommend it.

This textbook is outstanding. I use it for my "Managerial Econ" class and its unique approach to explaining economic concepts is second to none. This is one of the few textbooks that actually "connects" with students and it is also one of the very few economics textbooks that is not saturated with political propaganda.
Outstanding!