Customer Reviews

Economics on Trial: Lies, Myths, and Realities

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

 

 

This book does something truly revolutionary. All arguments originate from common-sense understanding of how people and businesses actually use their resources--including, and especially--their time. Time is a crucial element in understanding basic economics. The proper consideration of time is critical in laying the ridiculous notions of Keynesian theory to rest.

I sympathize especially with the author's introductory remarks in which he describes how he manages to get a Ph.D. in economics without much confidence that he had learned anything useful about the subject. It is essential that we introduce real-world, practical considerations into the educational curricula in this country. The tyranny of the Ivory Tower must end! Mark Skousen offers an important step in the right direction.

This book finally provides a student of Principles of Economics the truth about macroeconomic policy. Ignore most that you read in those classes and concentrate on understanding this book. Do you think the economy can be controlled and managed by government? Read this and realize that all government policy serves to do is distort allocation of economic resources. A must read for any economics fan

This is probably the most accurate text on economics that has ever been penned. What Mark Skousen does in this book is absolutely astounding, at least for an economist. He seems to be out in the real world, seeing just what effects the newest policy has on businesses and people. He first of all destroys the myth that the GNP is an accurate number and shows what should be done to reflect a more accurate measurement of the economy. He also brings back the Gold Standard and idea that will have to be put into place especially now that we have the Euro Dollar.
I highly suggest this book to anyone who has an interest in basic economics. This book should be required reading for all high school students, because if they read this text and understand it America will grow to be a very strong financial secure nation.
Good Job Mr. Skousen
One suggestion: A good book that could complement this one is to read "The Seven Fat Years: and how to do it again" BY: Robert L. Bartley

Skousen's book is mistitled.It essentially deals with Skousen's partially correct belief that the introductory principles courses in macroeconomics and microeconomics for freshmen(women)are not doing an effective job in teaching the core fundamentals of economic decision making because a number of the leading textbooks overemphasize technical,graphical, and mathematical manipulation of oversimplified models rather than understanding.Skousen should have stopped here.Unfortunately,his diatribes against the paradox of thrift analysis in Keynes's GT and Samuelson's principles textbook means that he has no technical idea of what Keynes /Samuelson is talking about.The boundary of the production possibilities frontier(with consumption good placed on the ordinate and investment goods placed on the abscissa) is a concave shaped curve that incorporates the law of increasing opportunity cost and the need to make trade offs if the economy is operating on the boundary.The relationship between consumption goods and investment goods is negative(inverse).This is the aggregate supply side of the macroeconomy.One now needs to define the aggregate demand (expenditure or income)side of the economy.Define consumption good expenditure on the ordinate and investment goods expenditure on the abscissa.Keynes defines aggregate consumption expenditure,C,to be a positive function of aggregate income,Y,where C=bY.b is the marginal propensity to consume out of income and is defined to be between 0 and 1(0<b<1).Aggregate income is Y=C+I.It is a straightforward intermediate algebra problem to solve for the the change in C given the change in I(dC/dI).Given C=[1/(1-b)]+[b/(1-b)]I then dC/dI=b/(1-b).Keynes presented this "simplist" form of his theory in chapter 10 of the GT.Keynes worked out a simple example for Dennis Robertson in a letter to Robertson on December 13,1936(See CWJMK,1973,Volume 14,p.90:"The amount of consumption goods that it will pay entreprenuers to produce depends on the amount of investment goods they are producing...") This means that the relationship between consumption expenditure and investment expenditure is positive,not negative.Given the positive relationship,one possible equilibrium position would occur on the boundary of the production possibilities curve.Unfortunately,all other points occur inside the boundary of the ppf curve in the interior of the ppf.There will be a gap between the aggregate supply side and the aggregate demand side.These various gaps represent multiple unemployment equilibria.The more advanced versions of Keynes's theory ,specifically the D-Z model, appear in chapters 20 and 21 of the GT.Robertson was never able to understand this version because he lacked mathematical training in the differential and integral calculus.The paradox of thrift is now easy to understand.If,in the aggregate,people save more in the present because they develop negative expectations involving fear of the uncertainty(not riskiness)of the future,due to increased reported layoffs,personal and business bankruptcies,home foreclosures,etc.,the positive relationship between C and I guarantees movement even deeper into the interior of the PPF.Skousen's point should have been that Samuelson leaves out a number of steps that Samuelson thought were self evident,not that the paradox of thrift itself makes no sense.