A Readable Book About Economics
by JBS President John F. McManus
Harry C. Veryser is an unusual individual. A businessman who owned an auto supply company for many years, he also spent many years teaching economics at the college level. Most who teach what is wrongly termed “the dismal science” at that level have no experience in the business world.
Now an author, Veryser had written a very readable book entitled “It Didn’t Have to Be This Way.” The book’s jacket entices readers with: “Why Boom and Bust is Unnecessary – and How the Austrian School of Economics Breaks the Cycle.” Unfortunately, many Americans think the “Austrian School” is located in a building somewhere in Austria, probably in Vienna. Not so! The Austrian School isn’t a place; it’s the viewpoint of many economists who derive their attitude from a study of history and of human nature, and from Ludwig von Mises who was born in Austria and lived most of his life in the United States. The author of numerous valuable treatises dealing with economics, Mises always claimed, and backed his claims with clarity and forcefulness, that boom and bust cycles afflicting numerous nations – certainly including ours – are both unnatural and unnecessary.
Veryser explains that mainstream economic thinkers view economics as though it were similar in many ways to physics, a discipline that can be reduced to numbers and mathematical formulas. No, he says, economics is an understanding of human action that “distrusts” the mathematical modeling that brought on the financial collapse in 2007, and many other busts throughout the years. His book presents a clear explanation of what anyone studying economics should know, even including how the Great Depression of the 1930s could have been avoided.
In addition to von Mises, clear thinkers presented by Veryser include Aristotle, Thomas Aquinas, and recent Mises disciples such as Carl Menger, Friedrich Hayek, and Henry Hazlitt. Along the way, a reader will find explanations of the nature and history of money, condemnations of the different types of inflation, and the harm done by governments when they meddle in matters of economics. One conclusion stated emphatically by Veryser insists: “There is hardly a country in history that has not experimented with debasing its currency.” In each country where the practice of debasement occurred, starting with the sixth century B.C. in a country then known as Lydia, economic ruin followed as it surely has followed here in the twentieth century.
Borrowing a quote from Hayek, “It Didn’t Have to Be This Way” asserts, “It seems to me that if we could prevent governments from meddling with money, we would do more good than any government has ever done in this regard.” What Harry Veryser has produced is essentially a history book, not the usual book about economics where pages are full of charts, graphs and muddled thinking. Recommended enthusiastically by former Congressman Ron Paul, this book will help anyone to know and love, not something deserving of the term “dismal,” but of how human beings can be expected to act and how governments should leave them alone in all their moral and legal efforts.
Download Understanding Economic Principles, a free 5-page PDF explaining money and its role in the free market.
Mr. McManus joined the staff of The John Birch Society in August 1966 and has served various roles for the organization including Field Coordinator, Director of Public Affairs, and now President. He remains the Society’s chief media representative throughout the nation and has appeared on hundreds of radio and television programs. Mr. McManus is also Publisher of The New American magazine and author of a number of educational DVDs and books.
Making the Case for Higher Inflation? Krugman’s Cockamamie Economics
by JBS President John F. McManus
A correct definition of inflation, something increasingly hard to find, appeared in “Webster’s New 20th Century Unabridged Dictionary (1957)”. It said that inflation is “an increase in the amount of currency in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices.” Note that what is inflated is the amount of currency. The effect of inflating the amount of currency is a rise in how much more of the less-valuable currency is needed to purchase anything.
In 1920, in a burst of youthful honesty, British economist John Maynard Keynes wrote a book entitled “Economic Consequences of the Peace.” In it, he correctly identified inflation as an increase in the amount of currency and then summarized, “By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens …. The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose.” Here we see that inflation constitutes thievery by government. Keynes, however, didn’t stand firmly by his correct 1920 attitude. His later twisted thinking greatly influenced President Franklin Delano Roosevelt and the socialistic New Deal of the 1930s.
Jump ahead to 1946 and the publication of economist Henry Hazlitt’s book “Economics in One Lesson.” It presents the absolutely correct definition of inflation. A prominent columnist whose work appeared regularly in Newsweek and other publications, Hazlitt minced no words when he wrote that inflation “tears apart the whole fabric of stable economic relationships. Its inexcusable injustices drive men toward desperate remedies. It plants the seeds of fascism and communism. It leads men to demand totalitarian controls.” The correctness of his dire forecasts was demonstrated in recent years as inflation ravaged Zimbabwe, Argentina and elsewhere. Hazlitt’s warnings should have been heeded in our country but they haven’t been listened to by most Americans. In our nation, inflation (courtesy of the Federal Reserve and a compliant Congress) continues to erode the value of everyone’s dollars.
Nobel Prize winner Paul Krugman writes about economic matters for the New York Times. On April 7th, without ever defining inflation, he told readers that more inflation is needed. He proposed a “compelling case for raising inflation targets above 2 percent.” In presenting “the case for higher inflation” he stated that “moderate inflation turns out to serve several useful purposes.” Not only did he rely on the false notion that inflation’s definition is rising prices, he proposed that America needs those prices to rise even higher.
No, Mr. Krugman. America needs honest money whose value can’t be manipulated by government, the Federal Reserve, or even by Nobel Prize winners. Americans also need a correct definition of inflation, not a confusing mishmash of highbrow economic verbiage that cloaks the real truth about thievery, solves no problems, and destroys the people’s wealth – in their paychecks, savings, pensions, insurance policies, investments, etc. The value of all dollars continues to sink, something every supermarket shopper experiences week to week and wonders why. The cause is inflation and its continuing toleration by a government that allows the Federal Reserve to produce a continuous stream of freshly created cash.
Could the people of our nation become desperate and “demand totalitarian controls” as Henry Hazlitt soberly suggested? The answer is obvious. But Paul Krugman doesn’t tell Americans what they need to know. Without the truth about inflation, the people will continue to worry about their future, maybe even begin to “demand totalitarian controls.”
Mr. McManus has written “Dollars & $ense,” a booklet explaining solutions to the economic meltdown.