Economics for Real People

The second edition of the fun and fascinating guide to the main ideas of the Austrian School of economics, written in sparkling prose especially for the non-economist. Gene Callahan shows that good economics isn’t about government planning or statistical models. It’s about human beings and the choices they make in the real world.

This may be the most important book of its kind since Hazlitt’s Economics in One Lesson. Though written for the beginner, it has been justly praised by scholars too, including Israel Kirzner, Walter Block, and Peter Boettke.

Gene Callahan is a software-technology professional in Connecticut, an adjunct scholar of the Mises Institute, and a commentator on economics issues in venues such as Marketplace and The Free Market. This is his first book.

Israel M. Kirzner (New York University): “Even a cursory examination of this book is sufficient to impress the reader that we have here a remarkably well-written exposition for the layman of the highlights of Austrian Economics.”

Peter J. Boettke (George Mason University): “Written in a jargon-less and engaging style, Callahan’s work provides the most comprehensive introduction to modern Austrian economics currently available to the intelligent layman.”

Walter Block (Loyola University, New Orleans): “I don’t toss around compliments like this lightly, but the passion, eloquence and sheer witty writing style of this author is also reminiscent of Rothbard. I plan to use it in all of my future intro courses.”

Barron’s calls Economics for Real People “a terrific new book on economic theory.” “If I were teaching an introductory course in economics,” writes Gene Epstein (Dec. 2, 2002), “I’d assign Gene Callahan’s Economics for Real People: An Introduction to the Austrian School. I also commend it to folks in search of a good read on the joys of economic insight.”

He continues:

“Callahan’s reference to ‘real people’ consciously echoes the more austere title of Austrian economist Ludwig von Mises’ magnum opus, Human Action. For as the author explains, economics is the study of how real people act to relieve dissatisfaction. For example, dissatisfied with the inconvenience of barter, folks start using more marketable goods for indirect exchange, a practice that eventually results in one or two commodities becoming the preferred medium of exchange, usually gold or silver….

“The first half of the book sets forth basic principles; the second shows how the myriad ways of interfering with the market make matters worse, sometimes much worse. Callahan cites the ‘health-care crisis’ as a prime example of how ‘the problems resulting from one intervention tend to lead to calls for other interventions to fix those problems.’ While the hated HMOs are generally viewed as creatures of capitalism, these ‘strange entities’ are just a response to the soaring costs arising from the government-instituted system of third party payments.”

“’We do not see AMOs in the automobile industry or CMOs in the computer business,’ observes Callahan. That insight cuts to the core of what is really going on. Auto dealers might also find their professional live unbearable, just as many physicians do, if AMOs told them how to service their customers. But happily, the disease of third party payments has only infected health care.”

“On the issue of government subsidizing business to build things, the author quotes from a review by Newt Gingrich of a book about the transcontinental railroad, in which the former congressman celebrates the ‘public-private partnership’ without which ‘the railroad could not have been built for another generation.’ To which Callahan responds, ‘Gingrich simply assumes that a transcontinental railroad ought to have come before the alternatives that entrepreneurs might have created with those same resources.’”