I.M.O. the main insight of the classical/Austrian economists is not that the free market is ‘perfect’ (there can be no ‘perfection’ so long as humans are involved), but most alternatives are usually much worse – because no one can have the necessary knowledge to intervene.

I’ve actually read Keynes’ General Theory (as well as another earlier work of his, which was more in line with the classical school). It reads more like a rant by a ‘mad genius’ – and Keynes was indeed brilliant.

My view on Keynesian economics is similiar to Goh Keng Swee’s (chief architect of Singapore – finance, education, defense): http://www.lbo.lk/print.php?nid=985794405

In some other speeches of his, he points out that the problem with the Keynesian prescription is that it is heavily reliant on monetary inflation and debt, and the ‘levers’ used to ‘fine-tune’ the macro-economy are necessarily ‘blunt’ too.

He also categorizes the post-WW2 countries into two groupings – the first one consisting of the Anglo-Saxon countries, who tried to stimulate economic growth via loose monetary policies; while the second group, which includes Germany, Switzerland and Japan, maintained (relatively) sound money – wealth creation were to come from hard work, skills, education (i.e. increases in productivity).

I’m not an Austrian – just another guy interested in how the world works. But I was brought up to believe that savings is good, debt has to be paid, and that “the way to a better life was through hard work… education, skills, diligence”. So the classical insights are more in line with my instincts.

I’ll check out the Heilbroner book – it looks interesting, thanks.

Hazlitt’s book begins well to be sure, and is very well-written. In later chapters though, he betrays a very poor understanding of economics. To his credit, he does occasionally hit a good point and even does so with the accompanying correct reasoning sometimes. But all too often, he simply misses the point. Hazlitt also wrote a book which was a chapter-by-chapter critique of Keynes’ great work “The General Theory of Employment, Interest, and Money” which is mostly completely wrong (the critique, not Keynes’ work).

Rothbard’s book was much worse, which surprised me because Rothbard studied under von Mises himself and had a strong mathematical background as well as a PhD from Columbia. It may be one of the most incorrect interpretations of the historical record that I have ever read, and the conclusions he draws from the lessons of history are quite baffling. It is difficult to describe just how bad I think this work is, and maybe I need to re-read it.

You’re obviously a fan of the Austrian school (and I am obviously not one). While I could possibly agree with you that Politics can be boiled down to the question of the appropriate role of government, I cannot bring myself to say the same of economics. Economics is about the distribution of scarce resources. The two books you’ve linked are overly hung up on the concept of money and ignore the wider implications of monetary policy in the context of the larger economy. They also seem to carry an irrational fear of government interference in anything and a blind faith in the ability of free markets to solve everything, which is evidently absolutely not true.

I suppose it is only fair at this point for me to recommend two books to you, although my two recommendations I probably not available for free online (I haven’t been able to find them, but that does not mean that they don’t exist). They are “The Worldly Philosophers” by Robert Heilbroner and “Conscience of a Liberal” by recent Nobel Laureate Paul Krugman.

http://jim.com/econ/

It lives up to its title i.m.o.

For monetary history, this short treatise, “What has government done to our money” by Murray Rothbard is quite decent:

http://www.mises.org/money.asp

There are some minor points which I disagree (and in Rothbard’s other works, he does distort history to prove his point), but it is a wonderful work nonetheless. Very prescient.

Politics and economics can be fundamentally reduced to the same issue i.e. what is the appropriate role of government? Different societies would require different answers, but economics and politics are intertwined. The classical liberals understood that there is also the greater issue of individual freedom and liberty at stake here – which led to their espousal of sound money and free markets.