Free Market Economics: A Syllabus

248 Pages·1975·21.041 MB·English

by  Bettina Bien Greaves

Free Market n
A Syllabus
by Bettina Bien Greaves
THE FOUNDATION FOR
ECONOMIC EDUCATION, INC.
IRVINGTON-ON-HUDSON, NEW YORK IO533
ABOUT THE PUBLISHER
The Foundation for Economic Education is a non-
political, nonprofit, educational institution. Its
senior staff and numerous writers are students as
well as teachers of the free market, private owner-
ship, limited government rationale. Sample copies
of the Foundation's monthly study journal, The
Freeman, are available on request.
Published 1975
2nd Printing 1977
3rd Printing 1984
ISBN-0-910614-53-9
Copyright 1975 by Bettina Bien Greaves
Printed in U.S.A.
PREFACE
The idea that led to this SYLLABUS was sparked Foundation's staff was extremely helpful in ready-
many years ago by Rosalie Slater and Verna Hall. ing the final manuscript for the printer. But tre-
On a visit to The Foundation for Economic Educa- mendous credit should go to my secretary, Mrs.
tion (referred to in this SYLLABUS as FEE) in Virginia Clifford, who proved a veritable "miracle
Irvington, they asked if FEE had a high school worker" by deciphering successfully my many-
economics text to help teachers present free mar- times revised and reworked rough drafts and trans-
ket ideas in the classroom. I agreed to assemble forming them into clean, neat copy. Special thanks
something suitable if a teacher should inquire. also for Mrs. Valerie Powell's help with the typing
When a specific inquiry came to FEE, I discovered and proof-reading.
that to do a satisfactory job would be a major un- This SYLLABUS will have been more than four
dertaking. The enthusiasm of Mrs. Peggy Bryan years in the making—from the time the first word
Crump, herself a high school economics teacher, was put on paper until copies come from the print-
spurred me on to make the effort. ers. I make no pretense at being an original think-
Thanks are due first of all to FEE and FEE's er, for the economic theories presented here have
President, Leonard E. Read, who pressured me had a noble ancestry. My understanding has been
from time to time to "get the SYLLABUS in the past derived from others—through their books, lectures
tense," as he would put it. My debt to Professor and discussions. However, it is my hope that in this
Ludwig von Mises, his many books and his sem- SYLLABUS I have interpreted and "translated" into
inars which I attended for many years is immeasur- simpler terms the profound economic theories set
able. My husband, Percy L. Greaves, Jr., the econo- forth by Mises and his fellow "Austrian" econo-
mist and an even longer-time student of Mises than mists so that they may reach a new audience of
I, deserves credit for having contributed substan- teachers and, through them, young people on
tially to my economic education through his ever- whom depend the prospects for freedom in the
ready, patient and careful explanations over the future.
years we have been together. Beth Herbener of the BBG
in

TABLE OF CONTENTS
Part 1—Basics
1. General Introduction 3
Questions to determine student understanding 7
Bibliography 9
2. What Is Economics? 11
3. The Nature of the Individual—Values and Actions 15
4. Private Property and Exchange 21
5. Social Cooperation and the Market 29
Part II—Economic Principles
6. Prices, Pricing 37
7. Savings, Tools and Production 54
8. The Entrepreneur and the Profit and Loss System 68
9. Labor, Wages and Employment 79
10. Money, Credit and Banking: Barter vs. Monetary Transactions 98
11. Competition, "Big Business," and Monopoly 126
12. Interregional Trade 145
Part III—Historical and Political Aspects
13. History of Economic Thought 161
14. Capitalism, the Hampered Market Economy, Socialism (Communism) 175
15. Economic History 195
16. Summary 214
Glossary 223
Index 238
Activities Index 242

PARTI
BAS/CS

1. GENERAL INTRODUCTION
This SYLLABUS is intended to help teachers of high the GLOSSARY and (4) a short list of RECOMMENDED
school economics explain economic principles in READINGS. The alphabetized GLOSSARY with defi-
the classroom. However, it contains many sugges- nitions of the more important economic terms and
tions for introducing and explaining economics to concepts discussed throughout the SYLLABUS ap-
younger students, as well as material to challenge pears at the back of this volume.
older students and even adult readers. In any case, A collection of readings—FREE MARKET ECONOMICS:
many ideas are included for varying the material— A BASIC READER—has also been compiled to ac-
by dramatizing and simplifying explanations for company this SYLLABUS. This companion volume
younger students or "enriching" them for more contains 81 readings, arranged according to the 16
mature students with extracurricular readings, subject categories of the 16 Units in this volume,
papers and projects. as well as a copy of the same complete alphabet-
ized GLOSSARY to be found in the back of this SYL-
Any teacher embarking on the course outlined in LABUS volume. The Readings are referred to
this SYLLABUS should be fully aware that it presents throughout the SYLLABUS by their number in the
the economic theory of the free market. It begins READER.
by defining economics and describing briefly how There is more than ample material for a full
the science of economics has been developed over year's course in this SYLLABUS. TO select just what
centuries. It discusses various thinkers and philos- to include, the teacher should look over the mate-
ophers who have contributed to economic under- rial in advance in the light of the time available and
standing. the interests and capabilities of the students. A
The theme throughout is that economics is a complete course might well be based on Part II
study of the consequences of (1) individual choices alone. Or a single Unit could be used, with various
which depend on the ideas individuals hold and RECOMMENDED READINGS, as a specialized or mini-
(2) individual actions taken in the conscious at- course. If time is especially short or the students
tempt to attain the various goals held by the indi- relatively slow learners, instruction could be limit-
viduals concerned. Current economic events be- ed, with the aid of a few of the pertinent SUG-
come intelligible only when explained on the basis GESTED ACTIVITIES and easier readings, to these
of economic laws derived from this insight into the major points:
nature of human action. Current economic prob- 1. economics deals with the actions of individuals
lems can be solved only after one understands how based on their personal ideas, values and goals
these problems have developed—out of government (Unit 3)
interference with the "natural" economic forces, 2. market prices are determined by acting individ-
which evolve from the voluntary actions of indi- uals who buy or refuse to buy (Unit 6)
viduals, whether acting alone or in conjunction and 3. the purchases of consumers determine the size
cooperation with others. of every businessman's "gate" or "box office
The material in this SYLLABUS is arranged in receipts" (Unit 8)
three Parts, each including several Units dealing 4. money is a "trading commodity" that evolved
with major subject areas. Each Unit consists of (1) out of barter—describe our coins and paper
descriptions of various SUGGESTED ACTIVITIES to money physically and explain how to use a
illustrate and dramatize the theories presented, bank (Unit 10)
(2) an EXPLANATORY TEXT, (3) a list of the signifi- 5. use Aesop's "The Grasshopper and the Ant" to
cant terms used in that Unit which are defined in explain savings and the development of tools
FREE MARKET ECONOMICS: A SYLLABUS
(Unit 7) and then introduce as much economic b. a bank official Unit 10
history as seems appropriate to show how peo-
3. Reports on projects of any stu-
ple have used tools over the centuries to in-
dents in the class who partici-
crease production (Unit 15)
pated in the Junior Achievement
In any event, to use the SYLLABUS to best advan-
program Unit 8
tage, the teacher should become thoroughly famil-
4. Request the annual reports of
iar with it.
large corporations Units 7, 8, 11
Several of the SUGGESTED ACTIVITIES used to
5. Investment by the students of
illustrate and help explain economic theories in the
fictitious "nest eggs" on the
classroom will require time to carry out and should
stock market Units 7, 8, 11
be started in advance. In addition to the usual rec-
6. Write letters to the editors of lo-
ommendations that various books be read and re-
cal newspapers, commenting on
viewed by the students, reports prepared and pa-
current events in the light of eco-
pers written on suitable topics, here are a few of
nomic principles covered in the
the SUGGESTED ACTIVITIES which call for planning
classroom Units 14, 15
if they are to be carried out in connection with the
pertinent Units: 7. Order film-strip, "Understand-
ing Inflation" Unit 10
1. Books to be read and research
8. Arrange field trips to local es-
done on such topics as:
tablishments such as:
a. the lives and experiences of
a. factories Unit 11
individual entrepreneurs, in-
b. stock exchange or broker's of-
dustrialists, inventors Units 7, 8, 11
fice Units 7, 11
b. the historical development of
c. bank Unit 10
specific business firms and
industries Units 7, 8, 11
9. Relating the economic principles being dealt
c. the history of inventions,
with in the classroom to what is going on in
tools, machines, industrial
the world is important. The teacher should,
techniques, transportation Unit 7
therefore, bring to class from time to time for
d. the history of workers, work-
discussion newspaper clippings which illus-
ing conditions, productivity
trate economic theories and the way govern-
and labor unions Unit 9
ment interventions have affected economic
e. the interdependence of pro-
activities.
ducers and consumers in a
division of labor economy Units 5, 12 10. Have the students watch newspapers and
f. the development of world magazines for articles dealing with economic
trade and trade routes Units 5, 12 matters—business, money, competition, invest-
g. the ideas and contributions of ment, and so on. Each student may choose a
individual economists Unit 13 topic, with the teacher's approval, and start
h. the theories of a specific accumulating a file of clippings on that sub-
"school" of economic thought ject, for possible use later in preparing papers
Unit 13 or reports. One student might take "money,"
i. the governmental regulations another "new businesses," another "bank-
and controls affecting a spe- ruptcies," and so on. Here are a few topics on
cific industry Unit 14 which students could accumulate newspaper
j. the economic development of clippings and magazine articles:
a specific country or geo-
Money and banking
graphical area.. Unit 15
Large corporations
2. Local speakers to be invited to
Business activities within your state, or
address the class:
across state lines, that is "interstate
a. a businessman, entrepreneur commerce"
or the official of a large cor- New businesses
poration Units 8, 14 New products or inventions