How an Economy Grows and Why it Crashes by Peter Schiff
I got locked out of my house the other day. Little did I know that this will be a great opportunity for me to learn more about basic economics and the US recession.
I was lucky enough to read Peter Schiff's book How an Economy Grows and Why it Crashes. Peter Schiff is known for predicting the crash of the U.S. economy and was the economic advisor of Ron Paul during the 2008 elections.
I was expecting a long and tedious lecture about the true causes of the US recession and the misconceptions and myths in Keynesian doctrines. To my surprise, the story actually starts out with three guys Able, Baker, and Charlie. The characters are living in an island and have to catch fish in order to survive. The story then evolves to a more complex society as the market allowed innovations and as people traded and migrated. Eventually it becomes much like how our world is today.
Able, Baker, and Charlie looking for fish.
The use of illustrations and allegory can be a really effective way of making people, even those not interested in economics or politics, understand the basic concepts that make people like me believe in free markets and limited-government. It does remind me of how Hayek used illustrations in Road to Serfdom as well.
It really does become more convincing when you use examples such as the one Peter Schiff used in this book. I mean, the story is so simple that even children could understand it. I even think it should be turned into an animated film or something. Many times while reading it, aside from the commentaries, it actually felt as if I was reading a children's book.
Aside from the simple and thought-provoking allegory, the story is also filled with a lot of parodies and funny parallels with the events the lead to the US recession. Having characters such as "Ben Barnacle" who give out government issued bank notes in place of using fish for trade. It is truly entertaining and I did find myself chuckling many times throughout the book.
The reason I recommend this book is because of the basic concepts that you can learn from it. They are so basic but often they are overlooked by people, even intellectuals. So many people are under the impression that we need to increase the size and power of government and that more intervention and regulation is the solution to many of society's problems. This book will show exactly the importance of a limited-government and individual liberty and how these concepts are the true solution to our problems.