I have finished the book, Lessons For the Young Economist. It was a book about economics.
There are 4 parts in the book. The first one is about the very basics of Economics. The second one is about capitalism and the market economy. The third one is about socialism: the command economy. The fourth and last one is about Interventionism: the mixed economy.
I have already discussed chapters 1-9 in detail in one of my older blog posts. Chapters 1-4 are HERE and chapters 5-9 are HERE. This review will cover the entire rest of the book from chapters 10-23. Although this review will be a lot less in detail than the other ones.
In its very basics, this book explains what economics is and why it is crucial in our everyday lives. It also explains the economic differences between a pure market economy, a socialist economy, and a mixed economy. I’ll start by explaining the pure market economy.
The pure market economy is when the government doesn’t interfere with anything or it doesn’t exist at all. People will use profit and loss to know if they are pleasing the customers and making the right product. In this world, the consumers will get the best products possible and there will be prosperity. There are currently no countries in the world that do this.
The socialist economy is when there is no private property and the government owns everything. It causes two problems, the calculation problem, and the incentive problem. First the calculation problem. How do the socialists know what prices to set and what consumers want? The pure market uses prices but the socialists don’t have this. They are working in the dark. They also don’t know how much of every single good to produce. Any solution they invent will eventually bring them to the pure market economy. This type of economy will cause mass starvation and problems. Right now there are no countries with socialism, but the most well-known country that had this was the USSR.
Lastly the Interventionist economy. In the interventionist economy, private property exists, but the government can mess with the economy. They can inflate the currency, mess with the prices of goods and services, mess with the trading with other countries and etc. This all means that they are walking with one eye open. Better than the socialists, but not true capitalism. This type of economy doesn’t cause mass starvation or prosperity. It causes lower standards of living on average, temporary prosperity and eventually masses of unemployment. Every single country in the world is like this which is very sad because it isn’t the best we could do.
Overall if you want to learn more about economics this is the book for you, although for beginners it is a little bit complex. I didn’t talk about everything in the book I just hit the main key points. If you want to get the book and it seems interesting to you, you can get it from HERE.