Lessons for the Young Economist

0:00Well, Bob, we're doing this interview at a good time. We've just finished a day-long seminar with high school students and you spoke, and we're just coming out of a Mises This Academy Classroom on Economics for High Schoolers using this book, right? So how's all this new vocation for you going? You're the nation's educator of high school students for economics. It's going really well. A lot of people like the class, not just the junior high and high school students that it was targeted for, but even older people. In fact, my own parents took the class and they were telling me they liked it. Of course, they could be biased, you could argue. I went out recently to a boarding school out in Oregon there and the headmaster there was in Austrian Economics and had the students read this book and they were coming up and it seemed unsolicited. They were giving me feedback and saying they really liked it. I asked them, you know, are the jokes at the right level or was it you guys thinking, oh, come on, this is for little kids? And they're like, no, no, you really hit the nail on the head. So it's been very gratifying. I think that it did what we hoped it would that taking this material and breaking it down.

1:20It's a level simpler than even Hazlitt. It's just one notch below so that the idea is people with kids coming up read this. Yeah, you could say that, but, you know, I think, and I said this in a review, there's a big difference between what you do and what Hazlitt does, because Hazlitt is really trying to give you the lesson and then apply the lesson, right? But you give the backstory. I don't know what word I'm looking for here, but you're trying to teach the mechanics of thinking about economics, just in its application, but in its actual gears and the actual logic of economic theory. So there's a way in which I think you're teaching something different from Hazlitt, even, you might even say more advanced actually. Well, you're right. It's certainly different things, but I just saying I had always thought when people say, what do I read? I'm new to this. For me, I said, well, have you read economics in one lesson? And if they had, and I said, well, that's where you start.

2:13but more recently I looked at that I think because we were you were doing the anniversary issue or something we were interviewing us and I realized that this actually there's some vocabulary in here and if you had if you knew nothing about economics and you were in sixth grade and someone handed you the Hazlitt's book you might be lost and so so that's what the niche we were trying to fill here but you know even so I think you know and Hazlitt's book is amazing and probably will never be surpassed in some way and yet this book would help to prepare you, for example, for an AP economics exam. Well, right. It's certainly that that was part of the goal. We're intending it for people, primarily homeschoolers, but not even just homeschoolers, but people. Right. They're going through high school. This is supposed to be the question I had in my mind was not someone who's going to be who major in economics.

3:01But I thought if someone just needs to know economics for life, you know, if they're just going to read one book on it, what material do they need to see? And that's what I try to give them here. But if you read the book and you went through all the exams and it took your class, you would be prepared for an economics class in college without any trouble. There would not be any new terminology or anything like that. You would be ready for it. Even though you take a distinctly Austrian approach, you somehow are able to fit this in within a mainstream context too. Right. I mean, there would be a few things like certain graphs and the model of perfect competition and stuff that we don't totally get into in this, but you would definitely I have the tools that you would know, you would have the context and the framework that you could then see that more mainstream stuff and be able to put it under your belt really quickly.

3:46How long did it take you to write the book? I think it took about maybe six months. And how did you approach it? Did you just say, okay, I'm not going to do anything else, I'm just going to write this? I was, I'm trying to remember. I mean, I had other stuff going on, but that was the thing I was focused on. and I... It was the cliche, how do you write a book? Well, it's just one word at a time sort of thing that I just... I wanted to get the outline first and then... Because it seemed a pretty daunting thing at first, like, gee, you got to write a textbook. I mean, that's kind of scary because you're worried you don't want to leave something out. You want to finish the book and then be like, I forgot about comparative advantage or something. And you have all this other stuff that you don't want to have that happen. So I consulted with a

4:28junior high teacher to make sure that when I was writing the early drafts, that the level was appropriate. He was having his students read it. And then when it was all done, we had some other economists of the Austrian School read the whole thing over just to make sure I didn't leave out something akin to comparative advantage. But yeah, I just, I would get real intense about a particular chapter. Like I would just sit down for three days, let's say, and bang out that chapter and do nothing but that thing. And then I would take a little break and then come back to it and do the next one. Do you tend to write one draft? Is that, are you good for one draft at this, at this point? You've had enough experience? I mean, what you mean is, yeah, I would write it out, and then someone would just make little comments, and I would change things here and there, but yeah, it's basically the first draft is recognizable compared to the finished product.

5:12Yeah. And we're not talking about human action or anything here, but you do cover a lot of subjects, and you cover them in surprising depth. Well, it's funny because it was actually hard to write this, and I think the physicist Richard Feynman one time was talking about some esoteric aspect of quantum physics, and he was saying, saying, you know what, we really don't understand that very well because I can't teach it to my undergraduate students. He could teach it to the grad students because he was using concepts and models and things that they knew, but he couldn't break it down to the undergrad level. And so his, the way he described it wasn't to say, so those kids are too dumb. He was saying, we don't understand this very well, this phenomenon in nature. And it's the same thing here that a lot of these things like people write questions at the Mises email list saying about, well, how do you guys define income?

6:00And it seems like, well, that's a simple third grade thing, but I was just thinking it through and I was trying to explain it. I was contradicting myself and I had to keep stopping and going back and saying, wait a minute, I'm going on the wrong track here because I'm running in circles. And that wouldn't have happened if I were teaching a graduate level class because I just would have assumed we all know what income is and move on. So that sort of thing was happening that I had to really rethink stuff. And I actually, I was telling people this and it's not just promotion for the textbook or something, but I learned economics writing it because I really had to think through certain things that before you just sort of take for granted. Yeah, I think this is also why it turns out to be so difficult to write these things and why they appear so rarely, actually, a good introductory textbook to any field, but in

6:43particular with economics, yeah, precisely for the reasons you mentioned, you have to know the subject so well. And it's a beautiful presentation, too, in the way you combine the Austrian take with Just what we think of as being regular economics. That's something you set out to do at the outset, wasn't it? Right. I didn't want to produce an Austrian introduction to economics because we think that it's sound economics. Then Milton Friedman had that thing, I don't believe in Austrian or these lists, just good economics. Of course, the Austrian response is right, but what we call Austrian economics, we think is good economics. That's why we do it. You could have, for example, done like a reduction of human action. That's not what you wanted to do. like I said I wanted to just say if someone's gonna read one book and that's it what do they need to know and so that you know it's mostly foundational things like how do you understand how a market economy works and then just an analysis of some of the typical things like price controls and I had a chapter in there when I struggled with was do I include a chapter on drug prohibition because I thought you know there could be some conservative homeschooling families that they might be like you know not want to have their kids read that stuff but I thought in terms of the impact and knowing he

7:53economics as we do, and then looking out in the world and understanding stuff. I mean, when you read people who don't know economics wringing their hands over, oh, those drug cartels in Mexico, and what are we going to do? It's so obvious to us that's prohibition. And you could still favor drug prohibition as long as you understand the economics of it. Right. So, I mean, of course, that's the thing we said, look, economics is a neutral science, but you need to understand the drug war is why there's this violence, you know? So if you think that's an acceptable cost, okay, fair enough. We know economics can't Now the distribution method here has been interesting, unique to the Mises Institute. We gave it away free online for a very long time before it even appeared in print. And that helped you, didn't it?

8:43Right, yeah. So, people don't know what you're referring to. Yes, the PDF of this, we had it available, obviously, before the physical book, and as you say, we just threw it up online and we were blasting it around the blogs and things. I was promoting it on my blog. I even, to try to get enrollment in the Mises Academy class that was going to use this as a textbook, I was going out on the web and finding homeschooling groups, writing their administrator, what have you, and saying, hey, there's this PDF, can I give it to your members? And, you know, some of them didn't answer me.

9:42And that was exactly the reverse. People were writing emails every day. When am I going to get a physical copy of this book? I'm sick of reading this video. Yeah, and for something like this, too, I mean, that's well designed for this sort of thing. If it were a little pamphlet, you could see, well, maybe there'd be no point in mass producing it. But something like this was at 412 pages, something like that, and it's a nice hardcover. And it's got some nice graphs and things, so you're right. It's really, you want to have that thing physically in your possession if you're going to be using it and the online version is good, like if I'm writing a test or something for the class and I don't have the book handy, I can just go to the PDF and go look at the relevant thing. Yeah, exactly. I mean, they work as complementary goods, really, yeah, which is a subject I'm sure you're covering here somewhere, right?

10:23Yep, yep. The first time I read it, I was blown away because, well, as you mentioned, you know, every few paragraphs, you get a little bit of a different spin on a subject you think you know really well. I hope so, yeah. I do think that people, especially at the lower levels, they're the ones that this is intended for. And then, I'm still working on the teacher's manual that's going to accompany this. And so there, especially for like a homeschooling family, the parent might not feel that comfortable, that they're going to be able to do that. And so, I think it's important to think about that. I'm not sure how we're going to, if you're going to bind it all together, now we're still debating that, but yeah, there's a lot of material in the teacher's manual, too, to show them how to teach, just things like, you know, games you can play to illustrate these concepts, that sort of thing, so it's not just studying the raw material.

11:19Now, what did you learn how to teach high schoolers? Was that from your college teaching experience at Hillsdale? Or how did you develop that intuition? Because it's a particular skill, isn't it? Yeah, I think so. It's funny because on the one hand, like the thing we just did right now, giving a talk to a younger high school crowd, I worry about those talks months in advance. Like if I'm going to talk to a group of bankers and stockbrokers, it's no problem because I know I have certain jokes that will work, you know, that doesn't matter. I'll make fun of Bernanke, it's fine. But with young kids, you don't know, you know, they could lose their attention span really easily. Yeah, they can easily check out.

12:05But it's funny, on the other hand, they haven't been sort of corrupted by the world yet, like they actually are interested in learning stuff, they're curious, and so if you get excited about the thing you're talking about, they pick up on that. They get interested in that, yeah. So it's sort of, it's reinforcing, like if it starts out well, you just, you get more and more interested. The other thing you can depend on is that high school students, well, I don't want this to sound like a put down, but they don't know anything, right? Do you know what I mean? Right. I mean, and that's not their fault. It's just because the educational system doesn't teach them anything. Right, and that also sort of motivates you because you know, you know, there's some students today that they've never heard someone talk about free trade before, and you just get excited, like, the privilege. I get to be the first person to explain this wonderful idea to somebody.

12:49I felt that way today when just bringing up the whole Gilded Age, you know. I mean, how many people have a favorable view of the Gilded Age and understand what it means for American history? and History. I mean, the greatest period of economic growth in the nation's history due to its free enterprise and industrial advances. And I knew, going into that lecture, that there wouldn't be anybody in this room that had ever even heard of it. Right, right. So yeah, the other thing too, when it's that age, is that you can be excited about it because you know it's an important idea. So you don't feel like you're wasting their time or something. You can get really excited. really excite, whereas at the higher level it gets if you're teaching, like this would be the problem when I would teach like intermediate, micro to my college students, if I didn't really believe in the thing I was teaching, it was hard to get into it and then the students

13:39pick up on that and they know you're bored and they get bored and it's this vicious downward spiral, whereas at this level, I mean this stuff is really basic and important and so you can really get enthusiastic and teach them with sincerity because you know, you need to know this to understand how the world works. I'm sure you've thought about this, but had you considered whether or not this might actually be a good college textbook? I had thought of that, and people were, some of the reviewers were saying, have you thought about putting in more stuff to make it compete so that somebody who wants to teach principles of micro at the college level could use this, whereas right now it's missing a few things. At best, this could be one of several books that they would use, but it's, I didn't want Well, to put so much stuff in there that it diluted the original purpose, which was, you know, someone homeschooling even an eighth grader could use this.

14:31Yeah. And people have all different... I'm sure you agree that there's no point in trying to teach economic theory to a 10-year-old probably, right? I mean, it requires a level of abstract capacity for abstract thought. And yet, people are at different levels in different ways, especially in this high school group between junior high and college that Some people are capable of handling things that others are not. Yeah, that's why it's really tricky because people would email me and say, you know, my daughter's in seventh grade, is this book for her? And I would have to say, well, I don't know because I don't know your daughter. And it's, and I'm sure you've seen this too, at Mises University, every year each crop of kids or whatever you want to call them, they get more and more sophisticated. It's, I mean, it was, there was a time when I first was coming here as a student where not everyone at each Mises U had even heard of Rothbard.

15:21and now, kids will come up and argue with the study guide, you know, they'll say, Dr. Murphy, on page 400, you said this, but really, you know, Rothbard in 1964 said this, and I'll be like, well, you're right, and I'll just run away or something, but it's, I mean, it's, the kids are getting more and more sophisticated, so it's... Yeah, what do you owe that to? I guess that partly digital media just has a chance to teach people year-round 24-7. Well, and just, if you just think it through, I mean, it's sort of like the mirror image of like, why are gang members now, you know, now there's young people who shoot each other. And it's because they learn from the people who are the current youngest people, you know, so it just keeps filtering down. So it's the same thing here in a good context that if there's a 15-year-old who's into Rothbard, well then maybe his younger friends will see it and it just takes a while to percolate down.

16:04Just a matter of spreading information. Yeah, and of course as Mises.org gets more popular, it spreads out and it just takes a while. Well, you know, I must tell you that I think probably since the Institute's founding, there's been a hope that we could find a high school textbook at some point that we could use. The last one, it was a very good one, was Bettina Graves, and I guess it was written in the 60s or the 70s, something like that. So these come along very rarely. So this is a big event for us, really. really. And the other thing too, I think it's important to have something like this is we up till now have been in the sense of trying to, you know, hate to use the word, but re-educate people that it's like we all have been, you know, taught the Keynesian stuff and that's almost like ingrained in us and then you come to Austrian economics having grown up your whole life thinking that oh,

16:55the way to fix an economy is for people to spend more money because that's what you've learned and then you come to Austrian economics maybe when you're in your 20s and realize oh no okay Okay, this is a new way. So, the point of this is to sort of give people the right foundation from the beginning so that they're learning it, you know, the idea, so their natural intuition is to go to the right answer and not... Well, and I think your point is an interesting one because it draws attention to the fact that there are many people who could learn from this book, starting with the Federal Reserve governor, Ben Bernanke, right? I mean, he could benefit from this. Well, sure, yeah. If he had an open mind. Yeah, it's funny depending on your view of if he knows what he's doing or if he's choosing the wrong thing for some ulterior motive. But yeah, it's, like I say, there are, on the one hand, it is intended for the younger reader, but yeah, there's stuff in there. Like I said,

17:47I literally clarified some of my own thinking and you're right, I think even professional economists, especially if they're not familiar with the Austrian School reading this might say, oh, okay, that's one way I think of it. Say, how's online teaching going at the Mises Academy? How's that going? It's going really well. I mean, the class sizes are still holding in there and we just keep lowering the price and just keep expanding it out. And it's, you know, some people are... What's the experience like though? You feel like you're able to engage the students well enough? Yeah, yeah, I think so. Because in the beginning, I was worried about how that was going to work. But it is, you do get a little bit of feedback because on the one hand, it's weird if you're just lecturing to, you know, in my case, it's a blue light on my computer

18:58because those people are paying and you feel like you want to put on a show. And they're also paying close attention. Right, yeah. Because, yeah, you have to compete against, you know, they could be checking their email or something. So you really have to buy for their attention. We've got Facebook on this side and Bob Murphy on this side. But you do get a little bit of the fee because they have the chat box there. And so, like, if I crack a deadpan joke, sometimes I'll, you know, wait a few beats and then see like some people do LOL and I'm like, okay, they got it, you know, moving on. So yeah, that's, it was a little bit odd in the beginning, but now I've gotten used to it and that's another medium, you know, everything's different. I found that when I was on there one time, I think it was after one of your, you had left the classroom and I was kind of hanging around.

19:40I was in my living room or something and people were still in the classroom. So I guess Grayson handed the camera over to me and I found it, I don't know how to describe it, so strangely flattering that you get a sense that everybody's, you know, just really interested in everything you have to say And they're still hanging around, you know what? Yeah, I don't know. It's neat. Yeah, like the last class I just had, it was an office hours session where I just show up and they have a final exam. This was the principles of economics class. And, you know, people tuned in and I explained the format of the exam and gave them some questions to say like, this isn't the exact question, but there's questions like this, you know, so that kind of thing. But that was done in about 15 minutes. And then I said, well, what else do you guys want to talk about? And they were What do you think of QE2?

20:22And so I just started going off on that. You're right, you always do feel funny. I mean, I get embarrassed to come down here and people come up and want me to sign books. You feel like, what am I, rocks? It's sort of absurd, but on the other hand, it's like, well, these people are interested in Austrian economics, that's great. What have you got starting in January? You've got a class on the Federal Reserve? Right, yeah, it's called the Anatomy of the Fed. That's in early January. And I think it's an eight-week course. and we just go through like the actual history of it, how it was founded. We give a quick lecture or two on just the theory of free market banking, how would money and banking be in a totally unregulated market economy and then compare that with central banking. But then we also go through the mechanics of it because I just stuff, I want to find out myself and just go research it to be

21:11able to teach it in this class. Like when Bernanke does open market operations, what actually happens? And you can't find that stuff out from the news reports at all. Right, because it's not in-depth enough. So we'll do that. And then, you know, just probably at the end, just do some historical applications, like look at the Great Depression, what did the Fed do then? And then, of course, today, what's the Fed doing? I guess I'm still just so enamored with the technology and the existence of the Mises Academy. I can't stop sort of thinking about it and talking about it, but it sounds to I mean, like you're sort of beyond all that and you're treating it like just a regular classroom. I mean, it's like a normal life. Yeah, in a sense, we've moved beyond the shock of, oh my gosh, there's a hundred people tuning in and they're seeing this and I can't believe the technology works.

21:58Yeah, we got over that pretty fast and now it's just, what are we going to teach next semester? You know, which is good that we just take it for granted and then how do we make it better? Yeah. What other projects you have going on? Mainly teaching? What's next? There's that. I'm, like I say, wrapping up the teacher's manual to accompany that, and that's mostly done. I just have to edit it and put it together. And then the next big thing is writing a study guide for The Theory of Money and Credit. That's right. The Theory of Money and Credit Study Guide. Yeah, that'll be very interesting. You know, some people are still, you know, that book still sells very well, and people still swear by it that it's the best book for teaching money. Yeah, it's funny. I've come back to it a few times that when I tried to read it when I was in, I think, high school, and it was just too hard for me. And I went, you know, Human Action was easier, and I did that. And then, but just recently, I went back to it, because with this issue of the people within the Austrian circles, you know, what they call free bankers versus 100% reserve people. And so they were each claiming that, oh, Mises supported our view. And so I said, well, I need to go read Theory of Money and Credit. And I was just blown away by how lucid it was. I mean, there's a lot of

23:03I don't know the definitions and things he gives, but it's still Mises explaining stuff very straightforwardly, it's just a very technical material. I guess we're going to have that out for the 100th anniversary of the book, right? It was written in 1912, right? Oh yeah, it'll be ready by then. Yeah, so that'll be a good way to celebrate. Thank you so much for writing the book and for being with me here today. Thanks for having me, Jeff.

23:33www.fieggen.com