What do you think?
Rate this book
Living Economics: Yesterday, Today, and Tomorrow
A great supplemental text for the teaching of economics, this book offers a clear perspective and a passion for a deeper understanding of the subject. Economics is not merely a game to be played by clever professionals, but a discipline that touches upon the most pressing practical issues at any historical juncture. The wealth and poverty of nations is at stake; the length and quality of life turns on the economic conditions individuals find themselves living within. Touching upon a variety of subjects—including market socialism, political economy, and economics education—this reference contains the wisdom of an expert in the field.
458 pages, Kindle Edition
First published January 1, 2012
35 people are currently reading
405 people want to read
About the author
Peter J. Boettke
109 books54 followersPeter Joseph Boettke is an American economist of the Austrian School. He is currently a University Professor of Economics and Philosophy at George Mason University; the BB&T Professor for the Study of Capitalism, Vice President for Research, and Director of the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at GMU.
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 12 of 12 reviews
September 5, 2020
2014 - updated 2020-09-05 - What a marvelous Introduction to Peter Boettke's overview of Economics. Boettke is incredible. But this book is not for beginners. It is for advanced students of economics or possibly highly motivated students at an intermediate level, especially if they are considering graduate school. Perfect also for Graduate level students in economics.
I love his summaries of the key issues in economics and the teaching of economics.
His chapter "Was Mises Right" was a fantastic synthesis of most of Mises's main ideas as well as putting Mises in context.
The next chapter on Kirzner was excellent too.
Loving this book. Wish I had more time to read to the end and digest.
I love his summaries of the key issues in economics and the teaching of economics.
His chapter "Was Mises Right" was a fantastic synthesis of most of Mises's main ideas as well as putting Mises in context.
The next chapter on Kirzner was excellent too.
Loving this book. Wish I had more time to read to the end and digest.
August 23, 2012
I just finished reading an excellent book by Economist Peter Boettke titled Living Economics: Yesterday, Today, and Tomorrow. The book is filled with comparisons of economic philosophies and the history of the economists who introduced these ideas. From the Classical economists to the Keynesians to the Neo-Classical economists to the Austrians, this book has something in it for everyone.
Dr. Boettke also focuses on the importance of teaching economics. Although economists should not direct public policy to achieve specific outcomes as though they are omniscient, the author argues that economics is a very important subject that covers multiple disciplines and it helps explain our world by noting the interaction of humans in ways that other disciplines cannot.
Here is an excerpt from the final pages of Dr. Boettke's book that nicely sums up his views:
"The business we are engaged in as practitioners and teachers of economics is a serious one. We must push out the frontiers of knowledge in our research and be able to communicate to our students, to policymakers, and to the general public the fundamental truths of mainline economics. We don't just need logically sound economic reasoning and a grasp of human history. We have to understand man as a fallible yet capable chooser, who lives within an institutional framework that is historically contingent."
"As I have tried to argue in this book, economics is both an illuminating and entertaining discipline and a discipline that tackles the most important questions of our age where questions of life and death hang in the balance. It is our professional responsibility to teach our students the sheer fund of using the economic way of thinking to make sense of the world and the stakes involved when the knowledge from the science of economics is denied for reasons of political expediency."
"The best economists read widely and deeply, think hard, speak directly, and write clearly. This is a serious business for serious people, but it also happens to be an amazing intellectual adventure into the "doings of man" in all their given variety and diversity, and across time and place. It is my sincere hope that the various explorations in economic principles of the mainline of economic science, and the examples of the master teachers who taught these principles to me, effectively communicates my enthusiasm for the disciplines of economics and political economy, and more importantly can serve as an invitation to my readers to join the great economic conversation."
I hope we will all join this great economic conversation. If you want to read a motivational book to learn more about economics and our world, please check out this book!
Dr. Boettke also focuses on the importance of teaching economics. Although economists should not direct public policy to achieve specific outcomes as though they are omniscient, the author argues that economics is a very important subject that covers multiple disciplines and it helps explain our world by noting the interaction of humans in ways that other disciplines cannot.
Here is an excerpt from the final pages of Dr. Boettke's book that nicely sums up his views:
"The business we are engaged in as practitioners and teachers of economics is a serious one. We must push out the frontiers of knowledge in our research and be able to communicate to our students, to policymakers, and to the general public the fundamental truths of mainline economics. We don't just need logically sound economic reasoning and a grasp of human history. We have to understand man as a fallible yet capable chooser, who lives within an institutional framework that is historically contingent."
"As I have tried to argue in this book, economics is both an illuminating and entertaining discipline and a discipline that tackles the most important questions of our age where questions of life and death hang in the balance. It is our professional responsibility to teach our students the sheer fund of using the economic way of thinking to make sense of the world and the stakes involved when the knowledge from the science of economics is denied for reasons of political expediency."
"The best economists read widely and deeply, think hard, speak directly, and write clearly. This is a serious business for serious people, but it also happens to be an amazing intellectual adventure into the "doings of man" in all their given variety and diversity, and across time and place. It is my sincere hope that the various explorations in economic principles of the mainline of economic science, and the examples of the master teachers who taught these principles to me, effectively communicates my enthusiasm for the disciplines of economics and political economy, and more importantly can serve as an invitation to my readers to join the great economic conversation."
I hope we will all join this great economic conversation. If you want to read a motivational book to learn more about economics and our world, please check out this book!
April 4, 2013
Boettke is great of course and the main thrusts of this book are important to made and repeated. But it felt like too much repetition to me -- at least if read straight through rather than sampled at leisure over time. It is a collection of previously published essays and so the same or similar points seem to get made over and over again. And at times it can get a little dry. But for someone who is a student of economics, the lessons taught are invaluable.
June 11, 2025
Professor Boettke can see the gossamer lines between the scholars in economics all at once. This is because Boettke is constantly asking: What is Economics to you? Where do you stand in the field? What will be your research project? It is in this way that he has mapped the territory. This particular book reads as if Professor Boettke sat down and started writing with no clear intent but to discuss things of interest to him. It is therefore voluble and without thesis, but winding its way towards wisdom.
Boettke has full command of the language of scholars. This is apparent when he says things like "begs the question," properly meaning "assumes the truth of the conclusion in the premise, invalidating the conclusion" rather than the vulgar meaning of "inspires us to ask" (p. 287). Since Boettke does not feel the responsibility to elaborate the details of any one argument, I found myself supplying a few ideas of my own. This book is unusually good at inspiring thought. Here are some Maxims for Austrian Economists that are inspired by this book and later influenced by conversations with Boettke, McCloskey, and others:
Sociology studies upstream of desire, economics studies downstream of desire
If a young woman buys a car, the sociologist's first thought is liable to be that she wants the car because events in her past have caused her to desire freedom of mobility. The economist's first thought is liable to be that she wants the car because it will serve her in the pursuit of other goals, like driving to a job with higher wages.
I am a radical marginalist
Take gambling: the drinks, the lights and flashes, it is all to influence you at the margin. Marginal thinking is no assumption, it is a nearly universally true description of human behavior. Rarely if ever do people take the time to think outside the current moment, and it is at the current moment that human actors must always decide.
The laws people know about are the important ones
Laws and norms are the ways groups of humans influence the action of their members. A written law may well have no influence on actual behavior. Only laws that people know about can influence people's behavior.
Contracts are the fundamental object of economic study
Contracts are ephemera; primary sources which happen to be preserved but are not intended to be so. They are one of the few places where people write down with near complete honesty conditions and expectations about behavior. Contrast with laws, which are often deceitful, useless, or irrelevant. When we look to an innovations in the field of economics, it is often contracts-be it monetarism (Friedman), options pricing (Black), or community norms (Ostrom). While behavioral economics and survey data exist, it is through the careful analysis of contracts that an economist is most likely to generate novel insight into human behavior.
Observe adjustment to predict displacement
Economists are not for the most part experimentalists. Forcing people to do things or compensating people to do things always influences their behavior. This is one economic measurement problem. Economists have the option of forcing or compensating people in ways too subtle to influence the outcome, but even so there are many large changes that cannot be induced, and for which there is no historical precedent to be investigated. In these cases, economists' best recourse is to observe adjustment in response to small changes in order to build a contextual model of human behavior that will predict action in case of a large displacement which has never happened. You can apply this maxim immediately in your own life. What would happen if your boss quit? Consider what happens when he takes a vacation. What would happen if your best friend's spouse died? Consider what happens when they are apart for a little while. Observe adjustment to predict displacement.
Common law is non-neutral in the short run, civil law is non-neutral in the long run
When a judge decides in favor of one party, that party benefits. In common law, over time, the rulings in a particular context will approach what is considered mutually fair. This is because the law, precedent, is being developed through arguments made by the relevant parties. In civil law, however, the law is made by irrelevant parties. Thus the decisions are likely to be made with very, very little knowledge about the true nature of the dispute. Rulings on top of civil law will be therefore be persistently at odds to the type of ruling preferred by the classes of people who get involved in these sorts of disputes, which is what we get in common law.
Centrally planned means individually prohibited
This follows logically. You cannot plan on the behalf of another unless you are able to prohibit the other from acting on their own behalf. When the state declares something within its purview, it is as if you have signed over power of attorney.
Capital is non-fungible
Not all things are equivalent. Say a movie star gets a rhinoplasty. His beautiful nose is not exchangeable for other things. It cannot be sold. And yet, it is productive capital because it contributes to making movies with beautiful people in them. The non-fungibility of capital is important to remember when we measure capital investment because capital aggregates count some things too much, other things too little, and do not account for the inability to transfer capital. Once capital is invested, it is hard to uninvest it. This is why tampering with the price system and causing malinvestment now can have negative effects that never go away.
In politics, outcomes often reveal secret intentions
Politicians have an incentive to lie. However, if they are doing corrupt things, there will always be corrupt outcomes. If a politician says she is raising the minimum wage to help the poor, but the poor are not helped, we must infer that she was not intending to help the poor, or that she is incompetent. It is unlikely that an incompetent politician and staff would attain office. It is better to assume the former hypothesis and look for the true beneficiary. For example, Walmart gave campaign contributions in support of the Affordable Care Act because they were already supplying health insurance to their employees, and by mandating health insurance, the government would force small businesses to effectively raise their wages and have more trouble competing with Walmart on price.
Policy tends towards concentrated benefits for the well organized few and diffuse costs for the disorganized many.
This is a classic saying in public choice economics for which I cannot take credit. The idea is that interest groups will be able to advocate for a policy that pays each interested member something like $100 at the expense of $1 from one thousand unrelated people. Say there are one hundred people in the interest group. The interest group shares some of their $10,000 spoils as a campaign contribution to the politician, and the policy is enacted. Concentrated benefits of $10,000 across one hundred people, diffuse costs of $100,000 across one hundred thousand people. But for none of the one hundred thousand people is it worth fighting for their lost value back, and $90,000 of value is lost to society. Concentrated benefits, diffuse costs.
Platonic forms are our cultural heritage.
In our learned mental concepts and abstractions, we each inherit a jumbled pile of profound wisdom mixed with metaphysical waste. It is our challenge to sort them out for ourselves. This is how a radical empiricist can explain the existence of the ideals. When we are children we see furry four legged animals and are taught that some are cats and others are dogs. Eventually we see that cats have pointed ears, whiskers, and no snout while dogs have floppy ears, an attentive disposition, and a snout. We might still be confused when we see a dog with pointed ears or that is smaller than a cat, or again when we see a mountain lion. But at each turn we look to our elders and the confusion is cleared up. In this way our elders also introduce metaphysical ideas: useless or counterproductive concepts. Since any one person cannot empirically investigate everything he knows, he will always find himself accepting things on faith. It is only when one has an experience that counteracts the forms, or when one is working within a novel area of human experience that a completely empirical perspective is practical. The world of the forms is culturally contingent and fragile. If you killed all English speakers, the English world of forms would be dead. Each language has its own world of forms. Many conceptual distinctions, like cats and dogs, are shared across cultures because the concepts are necessary for the regular way of being in the world. But no one would say that the concepts of the calculus exist in every culture; they only exist in the minds of those in the academic culture.
If you have a market failure, invent a self-enforcing equilibrium
If you see a problem in human behavior, you can often solve it by inventing a rule. If the rule benefits all parties involved, they will generally adopt this rule. Take the Universal Serial Bus (USB) for example. While it is partly arbitrary, it has improved billions of lives and made millions very rich. In economics, these sorts of rules are called "institutions."
Institutions with pillars can be coerced or corrupted, institutions with no center remain free
In the way the word institution is normally used, the Federal Reserve is an institution. An economist would say that the Federal Reserve is a powerful organization that controls institutions, agreed upon rules that people abide by that is, like the discount rate. The thing is, the discount rate is often manipulated by powerful politicians. In the free banking era, there was no easy way to influence the interest rates; now there is. Someone has yet to influence the design of stop signs for their own gain. Institutions with pillars can be coerced or corrupted, institutions with no center remain free.
Boettke has full command of the language of scholars. This is apparent when he says things like "begs the question," properly meaning "assumes the truth of the conclusion in the premise, invalidating the conclusion" rather than the vulgar meaning of "inspires us to ask" (p. 287). Since Boettke does not feel the responsibility to elaborate the details of any one argument, I found myself supplying a few ideas of my own. This book is unusually good at inspiring thought. Here are some Maxims for Austrian Economists that are inspired by this book and later influenced by conversations with Boettke, McCloskey, and others:
Sociology studies upstream of desire, economics studies downstream of desire
If a young woman buys a car, the sociologist's first thought is liable to be that she wants the car because events in her past have caused her to desire freedom of mobility. The economist's first thought is liable to be that she wants the car because it will serve her in the pursuit of other goals, like driving to a job with higher wages.
I am a radical marginalist
Take gambling: the drinks, the lights and flashes, it is all to influence you at the margin. Marginal thinking is no assumption, it is a nearly universally true description of human behavior. Rarely if ever do people take the time to think outside the current moment, and it is at the current moment that human actors must always decide.
The laws people know about are the important ones
Laws and norms are the ways groups of humans influence the action of their members. A written law may well have no influence on actual behavior. Only laws that people know about can influence people's behavior.
Contracts are the fundamental object of economic study
Contracts are ephemera; primary sources which happen to be preserved but are not intended to be so. They are one of the few places where people write down with near complete honesty conditions and expectations about behavior. Contrast with laws, which are often deceitful, useless, or irrelevant. When we look to an innovations in the field of economics, it is often contracts-be it monetarism (Friedman), options pricing (Black), or community norms (Ostrom). While behavioral economics and survey data exist, it is through the careful analysis of contracts that an economist is most likely to generate novel insight into human behavior.
Observe adjustment to predict displacement
Economists are not for the most part experimentalists. Forcing people to do things or compensating people to do things always influences their behavior. This is one economic measurement problem. Economists have the option of forcing or compensating people in ways too subtle to influence the outcome, but even so there are many large changes that cannot be induced, and for which there is no historical precedent to be investigated. In these cases, economists' best recourse is to observe adjustment in response to small changes in order to build a contextual model of human behavior that will predict action in case of a large displacement which has never happened. You can apply this maxim immediately in your own life. What would happen if your boss quit? Consider what happens when he takes a vacation. What would happen if your best friend's spouse died? Consider what happens when they are apart for a little while. Observe adjustment to predict displacement.
Common law is non-neutral in the short run, civil law is non-neutral in the long run
When a judge decides in favor of one party, that party benefits. In common law, over time, the rulings in a particular context will approach what is considered mutually fair. This is because the law, precedent, is being developed through arguments made by the relevant parties. In civil law, however, the law is made by irrelevant parties. Thus the decisions are likely to be made with very, very little knowledge about the true nature of the dispute. Rulings on top of civil law will be therefore be persistently at odds to the type of ruling preferred by the classes of people who get involved in these sorts of disputes, which is what we get in common law.
Centrally planned means individually prohibited
This follows logically. You cannot plan on the behalf of another unless you are able to prohibit the other from acting on their own behalf. When the state declares something within its purview, it is as if you have signed over power of attorney.
Capital is non-fungible
Not all things are equivalent. Say a movie star gets a rhinoplasty. His beautiful nose is not exchangeable for other things. It cannot be sold. And yet, it is productive capital because it contributes to making movies with beautiful people in them. The non-fungibility of capital is important to remember when we measure capital investment because capital aggregates count some things too much, other things too little, and do not account for the inability to transfer capital. Once capital is invested, it is hard to uninvest it. This is why tampering with the price system and causing malinvestment now can have negative effects that never go away.
In politics, outcomes often reveal secret intentions
Politicians have an incentive to lie. However, if they are doing corrupt things, there will always be corrupt outcomes. If a politician says she is raising the minimum wage to help the poor, but the poor are not helped, we must infer that she was not intending to help the poor, or that she is incompetent. It is unlikely that an incompetent politician and staff would attain office. It is better to assume the former hypothesis and look for the true beneficiary. For example, Walmart gave campaign contributions in support of the Affordable Care Act because they were already supplying health insurance to their employees, and by mandating health insurance, the government would force small businesses to effectively raise their wages and have more trouble competing with Walmart on price.
Policy tends towards concentrated benefits for the well organized few and diffuse costs for the disorganized many.
This is a classic saying in public choice economics for which I cannot take credit. The idea is that interest groups will be able to advocate for a policy that pays each interested member something like $100 at the expense of $1 from one thousand unrelated people. Say there are one hundred people in the interest group. The interest group shares some of their $10,000 spoils as a campaign contribution to the politician, and the policy is enacted. Concentrated benefits of $10,000 across one hundred people, diffuse costs of $100,000 across one hundred thousand people. But for none of the one hundred thousand people is it worth fighting for their lost value back, and $90,000 of value is lost to society. Concentrated benefits, diffuse costs.
Platonic forms are our cultural heritage.
In our learned mental concepts and abstractions, we each inherit a jumbled pile of profound wisdom mixed with metaphysical waste. It is our challenge to sort them out for ourselves. This is how a radical empiricist can explain the existence of the ideals. When we are children we see furry four legged animals and are taught that some are cats and others are dogs. Eventually we see that cats have pointed ears, whiskers, and no snout while dogs have floppy ears, an attentive disposition, and a snout. We might still be confused when we see a dog with pointed ears or that is smaller than a cat, or again when we see a mountain lion. But at each turn we look to our elders and the confusion is cleared up. In this way our elders also introduce metaphysical ideas: useless or counterproductive concepts. Since any one person cannot empirically investigate everything he knows, he will always find himself accepting things on faith. It is only when one has an experience that counteracts the forms, or when one is working within a novel area of human experience that a completely empirical perspective is practical. The world of the forms is culturally contingent and fragile. If you killed all English speakers, the English world of forms would be dead. Each language has its own world of forms. Many conceptual distinctions, like cats and dogs, are shared across cultures because the concepts are necessary for the regular way of being in the world. But no one would say that the concepts of the calculus exist in every culture; they only exist in the minds of those in the academic culture.
If you have a market failure, invent a self-enforcing equilibrium
If you see a problem in human behavior, you can often solve it by inventing a rule. If the rule benefits all parties involved, they will generally adopt this rule. Take the Universal Serial Bus (USB) for example. While it is partly arbitrary, it has improved billions of lives and made millions very rich. In economics, these sorts of rules are called "institutions."
Institutions with pillars can be coerced or corrupted, institutions with no center remain free
In the way the word institution is normally used, the Federal Reserve is an institution. An economist would say that the Federal Reserve is a powerful organization that controls institutions, agreed upon rules that people abide by that is, like the discount rate. The thing is, the discount rate is often manipulated by powerful politicians. In the free banking era, there was no easy way to influence the interest rates; now there is. Someone has yet to influence the design of stop signs for their own gain. Institutions with pillars can be coerced or corrupted, institutions with no center remain free.
July 27, 2013
This is a solid book. It felt, to me, like an introduction to many important characters within the classical liberal and Austrian tradition (as well as Public Choice and New Institutionalists) as well as their important contributions. I don't recommend this, however, for someone who does not really love reading about economics, but hasn't taken a macro class. There are a lot of references to things like general equilibrium theory and what not. There are reoccurring themes in the book like the entrepreneurial discovery process, and especially the Socialist calculation debate. Boettke does a great job cramming a lot of information that is truly valuable into about 390 pages (rest is bibliography).
August 11, 2018
Classic Boettke. He discusses the art of teaching economics (Part 1), important teachers of economics (Part 2), and the practice of economics (Part 3).
Highly recommended as an introduction to Austrian economics.
Highly recommended as an introduction to Austrian economics.
August 30, 2014
Excellent work tracing the main issue in Economics from the late 1800s forward. Good source material on Public Choice theory.
September 5, 2019
Peter Boettke's intellectual enthusiasm for the study of economics really shines through in this lively book. Economics, Boettke demonstrates, is an exhilarating exploration of all human endeavors, whether in the marketplace, voting booth, family, church or any other activity. It offers a tremendous framework in understanding human behaviour in real-world situations.
He does an excellent job of surveying the great thinkers that have honed and advanced the classical economics tradition, tracing all the way back to Adam Smith himself. He gives a sharp critique of modern economics which has morphed into a tool for utopist social engineering in the hands of activist public servants and economists. The proper vocation of an economist, Boettke maintains, is to be a student of the economy, not its saviour. To be a cautionary prophet that humbly learns and teaches his fellow man the processes of social cooperation and spontaneous order that no single man can design or control. Time will tell whether the caution of Boettke and others will be heeded.
He does an excellent job of surveying the great thinkers that have honed and advanced the classical economics tradition, tracing all the way back to Adam Smith himself. He gives a sharp critique of modern economics which has morphed into a tool for utopist social engineering in the hands of activist public servants and economists. The proper vocation of an economist, Boettke maintains, is to be a student of the economy, not its saviour. To be a cautionary prophet that humbly learns and teaches his fellow man the processes of social cooperation and spontaneous order that no single man can design or control. Time will tell whether the caution of Boettke and others will be heeded.
November 4, 2022
Great book to learn about different schools of economic thought
Comes form Classical Liberal perspective
Comes form Classical Liberal perspective
January 3, 2017
A masterpiece on the study of economics. Highly recommend.
Displaying 1 - 12 of 12 reviews