Principles of Economics distills 20 years of teaching into a valuable resource for students and economists.
Focus on human action and subjective valuation offers readers a practical understanding of economics.
Understanding interest rates through time preferences is crucial for grasping monetary issues.
Deep dives
Principles of Economics Book Launch
The new book, Principles of Economics, presents a comprehensive overview of economics catering to university students, general readers, and professional economists. Written in an engaging and clear style, the book distills 20 years of economics teaching and learning into a valuable resource. Embracing an unapologetically Austrian approach, the focus is on introducing economic principles without delving into arcane theoretical models.
Motivation for Writing the Textbook
The motivation behind creating the textbook lies in providing a purely Austrian perspective on economics without getting bogged down in arguing against mainstream narratives like Keynesian economics. By focusing on core Austrian principles, the author seeks to offer readers a clear, concise, and practical understanding of economics, emphasizing the importance of human action and subjective valuation.
Development of the Textbook
The author's four-year journey in creating Principles of Economics stemmed from a pivotal course on Austrian economics taught at a university. Recognizing the absence of a concise Austrian economics textbook for undergraduate study, the author embarked on structuring the book to present economic concepts in a reader-friendly manner, steering away from academic debates and focusing on real-world applications.
Fundamentals of Economics and Market Order
The groundwork of the book covers fundamental economic concepts like human action, subjective valuation, and the economizing of time. Moving into discussions on labor, property, capital, and technology, the text delves into how individuals strive to improve their economic value and time allocation. Exploring topics such as money, markets, and capitalism, the book elucidates how social economizing within a market order enhances economic prosperity and individual freedom.
Explaining Time Preferences and Interest Rates
The Austrian perspective highlighted in the podcast emphasizes understanding interest rates through time preferences. According to the perspective, interest rates are determined by the level of time preference, where higher time preferences lead to higher interest rates. This concept lays the groundwork for grasping monetary issues, such as the effects of interest rate manipulation on credit markets, business cycles, and market failures.
Credit, Banking, and the Business Cycle
The discussion delves into the distinction between commodity credit and circulation credit, with a focus on Mises' differentiation between the two. Commodity credit involves a sacrifice on the lender's part, while circulation credit allows institutions to issue loans without such sacrifice. The issuance of circulation credit, considered the root of business cycles, disrupts economic calculation and capital accumulation, leading to market distortions and ultimately impacting civilization. The podcast connects how these economic principles tie closely to the functioning of modern societies and the role of sound money like Bitcoin in preserving economic order.
Saifedean's latest book is now out, and in this episode he gives an overview of the book's contents and what you can expect to learn from reading it! Principles of Economics is the Austrian economics textbook you wish you had at university, an enjoyable and informative read that covers the most important concepts of economics, valuable to the student, general reader, and professional economist.
Enjoyed this episode? You can take part in podcast seminars, access Saifedean’s courses – including his ongoing course ECO22: The Fiat Standard – and read his new book available now, Principles of Economics, by becoming a Saifedean.com member. Find out more here.
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