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The book has many good things in it. I especially like the clear discussion of the production structure and the idea of the "rate of interest" permeating the whole production structure and not just the loan market.

I do not know about using it for Principles. I once used a chapter or two when I was teaching intermediate macroeconomics (yes, I did this many years ago). The idea was that I would give the students the Keynesian, monetarist and Austrian approaches to the area. It confused the students, however. They said (more or less): Just teach us what is right and not all of the various schools. So no matter which one I endorsed they would have thought the other two were a waste.

I don't think you can just teach Rothbard. The students won't be able to understand any other economics course they subsequently take.

So I don't know and that is one reason I stopped teaching macroeconomics!

In my first job out of graduate school, I used Heyne's ECONOMIC WAY OF THINKING for the text and lectured straight out of Rothbard. I included pages out of MAN, ECONOMY, AND STATE for voluntary supplemental reading. I would have used MAN, ECONOMY, AND STATE, as the required text but we had two satellite campuses with principles courses taught by people without a PhD in economics, and our accrediting body required that they use the same text as the main campus. I didn't think it fair or wise to require non-economists, so to speak, to teach from.

Upon moving to Grove City College, I found that Jeffrey Herbener was using MAN, ECONOMY, AND STATE for Principles of Macroeconomics, so I used it for Principles of Microeconomics. It was great. The students understood that they were reading a great work and I was able boil things down (where it was needed for an introductory class) in my lectures.

We used MAN, ECONOMY, AND STATE until my book FOUNDATIONS OF ECONOMICS was published. My book draws heavily from my class notes from MAN, ECONOMY, AND STATE transformed into a more introductory text.

I really like this approach, because at the Principles level, the most important thing we can do is teach students how things really are. We build economic theory from human action on up. It is in our Intermediate Micro and Macro sequence that we then explain and evaluate various alternative economic frameworks in light of the sound economics they already know.

I'm planning a macro course for MBAs this fall and, in fact, was going to go about it the way Prof. Rizzo has done in the past - discussing the three major schools of thought. After reading his post, however, that may not be the best thing.

I do intend to include MES sections as supplementary reading, simply because no other book or school has such a well developed discussion of production. Further, they must be exposed to more than the NK and RBC views of business cycles. Human Action would probably cause their heads to explode, but MES seems very accessible.

J. Oxman,

You have the advantage of more mature students (MBA) and Roger Garrison's book which presents the three theories in highly comparable form. It is also true that today there are more than three approaches to consider. So your task is more complicated. Nevertheless, the greater maturity of the students may swamp all other issues.

Prof. Rizzo,

Thank you for your response. The maturity is a positive factor, and Roger Garrison's book is a great suggestion. The schools I would present now are New Keynesian, neoclassical/monetarist, and Austrian. I think new monetarism is too new to be presented.

I have taught Macroeconomics over the years as a form of "history of ideas" course.

After talking about and explaning GDP, etc. (as most textbooks usually start out), I then begin with the quantity theory of money and the Fisherian MV=PQ, and how this influenced monetary theory and policy in the early decades of the 20th century.

I, then, shift to the Austrian version of the quantity theory of money, and their analysis of the non-neutrality of money, their focus on relative prices and production rather than output and prices as a whole, and their critique of price level stabilization in the 1920s and how they saw this as a primary factor in setting the stage for the Great Depression.

After this, I introduce Keynes and the Keynesian conceptions of the economy "as a whole," and the entire Keynesian apporatus. This includes the Keynesian "solutions" to depressions.

I contrast these Keynesian policy views with the Austrian policy ideas on economic recovery after an unsustainable boom. And I offer suggestions as to why Keynes' views prevailed over the Austrian ones.

This takes the course into the post-World War II era, and the slow "rediscovery of money" as a causal factor in generating economic fluctuations, which took the form of the monetarist "couhnter-revolution."

I then explain how this evolved into the New Classical, Rational Expectations approach and the shift to a more microeconomic, but general equilibrium approach to understanding "macro" phenomena.

This is followed with explaining the New Keynesian counter-counter revolution.

Finally, I end with a return to the Austrians, and their insights relative to the monetarists, the New Classicals, and the New Keynesians.

I find that presented in this way as the historical narrative of alternative theories developed and clashed with each other about how the economy experiences macro problems reduces the attitude that I have experienced, also, from students, who get impatient with being presented with competing macro theories, side-by-side; rather than be just told which is "true."

Richard Ebeling

Will teaching a Principles Course using Rothbard prepare students for other courses in economics?For graduate level economics courses?Maybe in the few fringe schools where Austrian economics is the norm. But will these students be able to converse with the other 90% of the profession?To read and contribute to the literature as developed and presented in top economics journals and not only the Review of Austrian Economics or the Journal of Private Enterprise?

The first thing I tried reading in Austrian economics was Man, Economy, and State and the differences between it an Neoclassical economics that really mattered weren't at all clear to me at the time. This was as a Sophomore in college. The points where the differences were clear, such as IO and patents, weren't convincing then. This is the experience of someone who was first exposed to neoclassical economics and who is also a jerk, but I do think Austrians need a textbook update.

I treat Man, Economy, and State as a book that I consult on technical matters. For someone relatively untrained in economics, I point them to Economics for Real People, which I personally felt was much more rewarding.

Funny you posted this Pete. I'm at FEE Intro Austrian this week and Paul Cwik did a talk on basic supply and demand and used the MES type approach. He and I were talking about it later and as you said, I've taught the whole sequence of going from subjectivism to MU to demand and supply in the way Rothbard derives it in MES. Since I've been using HBP I stopped assigning the first 65 pages of MES since your stuff is close enough and I just have to add some bits to fill in the Austrian parts.

But yeah, there's no better way to understand supply and demand from an Austrian perspective than MES, and nothing one does there undermines the students' ability to converse with the mainstream.

The purpose of an intro class is not to prepare PhDs anyway, but to help encourage economically literate citizens.

Steve Horwitz is right that the purpose of an intro class is to encourage economically literate citizens. That surely is most important at the Principles level.

In any event, responding to the concerns of Mainstream Economist, teaching principles of economics using MAN, ECONOMY, AND STATE does prepare students for other courses and, after having those other courses is an excellent foundation for graduate school. A good student will learn what he needs to know of the broader profession in Intermediate Micro and Macro and other electives in upper level courses.

I take Richard Ebeling's general approach to Intermediate Macro. After discussing GDP, Say's Law, and Fisher's quantity theory, I use Heurta de Soto's MONEY, BANK CREDIT AND ECONOMIC CYCLES to explain Austrian capital theory and the business cycle. We then use Snowden and Vane's MODERN MACROECONOMICS to examine Keynesianism, Monetarism, New Classical, Rational Expectations, and New Keynsianism. It works well for our students who have not had any trouble getting into graduate programs.

I used MES as a student in undergrad, but as a second level course. The setup was very simple. Read 10-15 pages a night, take 1-2 pages of notes, questions and insight, and send them to the prof. by morning. Notes would be used to guide discussion for class that day. Also helped to only have 8 students. Repeat every weekday for the entire semester, occasionally skipping some sections. I thoroughly enjoyed the experience.

In my courses at UFM I do exactly the same thing that Richard Ebeling described. I think that this "comparative macroeconomics" is the best way to introduce students in macroeconomics.

Regarding Pete´s question, I remember my first course of "Economic Analysis" in the Master in Economics at ESEADE (Buenos Aires), where Gustavo Matta y Trejo was my professor and he used for the complete course Rothbard´s MES.

It was not easy but that was the first time I studied completely the Austrian Economic Point of View.

Another fine alternative is "MACRO & MICRO Economics Renewed" by Bruce Koerber.

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