An Introduction to Economic Reasoning

David Gordon

Ludwig von Mises Institute 518 West Magnolia Avenue Auburn, Alabama 36832-4528

Copyright © 2000 Ludwig von Mises Institute. All rights reserved.

Published by the Ludwig von Mises Institute, 518 West Magnolia Avenue, Auburn, Alabama 36832-4528. (www.mises.org)

ISBN: 0-945466-28-5

Dedicated to

Quintin E. and Marian L. Ward, with deepest gratitude.

Acknowledgements

Iam first of all indebted to Mr. and Mrs. Quintin E. Ward, whose generous support made this book possible. Mr. Ward’s career and

achievements exemplify the free market in action.

For very helpful comments on the manuscript, Ithank Hans Hoppe, Jeffrey Herbener, Joseph Salerno, and Mark Thornton. They bear no responsibility for any remaining mistakes.

At the Mises Institute, Judy Thommesen and Kathy White handled editorial work in the manuscript with great skill. I thank Mises Institute Member Richard Perry for preparing the index. Pat Barnett, as always, was a constant source of encouragement. She also provided me with helpful comments and corrections. The president of the Mises Institute, Lew Rockwell, not only commissioned the project: he nudged it along through gentle prodding. To all of these, many thanks.

Table of Contents

	INTRODUCTION................................................................................	i
1	THE METHOD OF ECONOMICS..........................................................	1
2	ACTION AND PREFERENCE, PART 1................................................	15
3	ACTION AND PREFERENCE, PART 2................................................	35
4	DEMAND AND SUPPLY...................................................................	55
5	THE LABOR THEORY OF VALUE......................................................	83
6	PRICE CONTROLS........................................................................	103
7	MINIMUM WAGES AND WAGE CONTROL.......................................	117
8	MONEY, PART 1..........................................................................	131
9	MONEY, PART 2..........................................................................	147
10	THE GOLD STANDARD.................................................................	161
	CONCLUSION..............................................................................	175
	GLOSSARY..................................................................................	177
	RECOMMENDED READINGS.........................................................	185
	INDEX........................................................................................	187