A Student's Guide to Economics: Economics Guide

by Paul T. Heyne

What is economics and what can you expect to learn from studying it? In this guide, Paul Heyne, for many years one of America’s most respected free-market economists, takes this question as his guiding principle. The story of the progress of economic thought—as embodied in the methods and theories of Adam Smith, John Maynard Keynes, Friedrich von Hayek, James Buchanan, and other influential scholars—provides Heyne with the material for an effective demonstration of the power and promise of the economic way of thinking.

Genres: Economics, Education, Finance, Money

72 pages, Paperback

First published December 1, 2000

About the author

Paul T. Heyne was a professor in economics at the University of Washington, Seattle, United States.

Reviews

[J. Wootton · Rating 3 out of 5]

My final foray into ISI's Student's Guide series. Formatting quibbles re: mini-biographies remain, but the primary text really did perform as advertised. This book provides an excellent little survey of the major movements and important works in economic theory from feudal-mercantilism through the end of the twentieth century; a sort of "what to read next" guide for new entrants into the field. This, plus a few of the primary texts Heyne highlights, will almost definitely serve introductory students better than a dry, semi-comprehensive textbook can manage.

I'll end with a minor aside from the book I found interesting: Heyne considers why communist and other highly centralized economies underperform, arguing that the primary reason isn't so much a problem of incentives as of information. Economies are such complex systems, and real-time information collection and analysis so difficult, that centralized decisionmaking will always lag behind a network of locally empowered nodes (businesses and households; local governments). Fascinating. I finished reading this short book months ago, and I'm still thinking about it.

[Nathan Albright · Rating 5 out of 5]

I found this book to be greatly enjoyable to read, and I feel so charitably towards it that I will not even ding the book too harshly for having an afterword by someone whom I have no respect for as a thinker and writer, the grossly overrated Thomas DiLorenzo [1].  Even so, this is a book that deserves to be taken on its own merits, and even the afterword is worthwhile because it focuses on the late author himself and not on the regrettably poor scholar who wrote the afterword.  To make me feel even somewhat charitable about DiLorenzo, this book had to be a remarkably good one on the subject of economics [2].  If it could have mentioned Bastiat, it would have been an even better book, but at just over 50 pages, it is a good enough book for its size to overlook such omissions.  Like the other books in this series, this book is a short, almost pocket-sized introduction to a subject that is of great importance but that is viewed as being somewhat arcane for many people, even though a great many engage in economic discussion without being aware of the field.

After a short introductory note, the author discusses the beginnings of economic growth and price theory before discussing the reformulation of economic through, an introductory survey into the subject, the neglect of recessions and the rise of macroeconomics, the divergence between microeconomics and macroeconomics, and the change from the exchange process to the economizing process that took place for many theorists.  After that there is a discussion of who is in charge of the economy (a serious question), the relation of ignorance and self-interest, exit and voice, questions of wealth, justice, and freedom, the relationship between organizations and markets, before some discussions about economic growth, the strange nature of economic theory, and some concluding comments as well as a bibliographic essay that encourages the reader to pick up some later books on economics like the writing of Peter Bauer, James Buchanan, Ronald Coase, Milton Friedman, Friedrich von Hayek, Ludwig von Mises, and others who had a great deal of influence on the author's thinking.  After this comes the aforementioned afterword by DiLorenzo that plugs the author's textbook and its approach to economics by focusing on the issue of exchange, something that has been too much neglected by many writers.

When we examine economics as a subject, it is very common that people will try to argue that there is a harsh divide between macroeconomics and microeconomics, especially when it comes to claiming that what is best for a country (or even a city) is different than what is best for a household.  In general, those who wish to denigrate the need for restraint and fiscal responsibility when it comes to civic organizations are quick to impugn the good sense and understanding of those who would wish to undertake macroeconomic policies that were suitable for the household, from which economics (derived from the Greek word for the household, oikos) comes.  This book, and presumably the author's work as a whole, does a good job in exposing the falsity of a great deal of contemporary thinking that rejects the insights of microeconomics and points out that macroeconomics is unlikely to see a resurgence as a field of study until it takes the insights of macroeconomics into greater account.  The book also focuses on the question of exchange, pointing out that larger economizing motives are themselves beyond the scope of the field and are theoretical assumptions that are likely to be false.  This is an author who wishes to see economics as it is, not as we would wish it to be, and that is for the best.

[1] See, for example:

https://edgeinducedcohesion.blog/2010...

[2] See, for example:

https://edgeinducedcohesion.blog/2018...

https://edgeinducedcohesion.blog/2017...

https://edgeinducedcohesion.blog/2018...

https://edgeinducedcohesion.blog/2018...

https://edgeinducedcohesion.blog/2018...

https://edgeinducedcohesion.blog/2018...

[Grace · Rating 3 out of 5]

Despite the attractive size and the promising title, not the best short introduction. I'm not sure who the audience is supposed to be on this — it's a pretty good overview of the history of economic thought, but leaves some basic concepts unexplained/assumed (e.g. inflation), and the introduction of key terms seems a little bit haphazard. I think I was hoping for something more applied, more basic, and also more in depth. Not a waste of time, though; it raised some good questions.

[Jason · Rating 4 out of 5]

Very short, but it gives a good introduction to economics. The author is decidedly biased in favor of Austrian and public choice methodology which I don't mind in the least.

[Suman · Rating 5 out of 5]

A very good overall elaboration on the history of Economics as a subject, the different theoretical ideas given by economists over the ages and the practical effect of those on society. As per my opinion Economics is a very difficult subject as also Physics. As per the author "economists use far more theory and use it with more confidence than they could ever justify on the basis of empirical studies". He continues to mention "Anyone who wants to become a professional economist today will have to be far better trained in mathematics than is the typical undergraduate in American colleges and universities."

We India, as a developing nation, fortunately have a couple of non-resident Nobel laureates but I still wonder "What Do Economists Contribute?" Either we do not understand or implement what they say/suggest or what they say/suggest is too theoretical to implement and to have any meaningful effect on our society.

[Chad · Rating 1 out of 5]

This overview of economics spans historical figures who influenced modern economic theories from Adam Smith to Milton Friedman. The author focuses on the history of how economics has been studied for most of the book. The next half is about the strengths and weaknesses of capitalism while sharing his opinion on socialism in one paragraph of the 50 pages. The bias is evident. Also, the piece does not offer tips or techniques to study economics. This is not a guide. It’s an opinion piece with bias intended to indoctrinate newcomers and thwart independent thought and open discourse. I recommend you do not waste your time.

[T. Farhat · Rating 3 out of 5]

Many praise the book, yet I could not find that shining side of it. I think it is deep, however, and should be reread after reading the primary sources. It is not uninsightful however!

[Joe Haack · Rating 5 out of 5]

I devoured this book in one sitting. As one who studied economics as an undergraduate, this book was both exhilarating and depressing. Exhilarating because Paul Heyne cuts through the fog and clarified all the aspects of economic thinking that excited me many years ago as a student. Depressing because this book came into my life 14 years too late. If this small volume was on my dorm book shelf, I might have avoided many semesters of frustration and confusion. Now I want to read his textbook The Economic Way of Thinking as soon as possible. I also want to dive into his works concerning business as a serious vocation.

[Jonathan]

None

[Trae Johnson · Rating 3 out of 5]

A good resource for further study. The author provides a reading list and includes biographical info on noted economists.