Mises was confronted with many questions concerning the free market economy. However, amongst his many detailed and sensible answers, one of the most telling responses that he ever provided was to the question of how profit could possibly arise in a free market (considering the fact that every factor of production is paid what it is worth to customers).
“Thus, profit and loss are generated by success or failure in adjusting the course of production activities to the most urgent demand of the consumers…Profit and loss are ever-present features only on account of the fact that ceaseless change in the economic data makes again and again new discrepancies, and consequently the need for new adjustments originates (Mises).”
Simply put, I could not agree more; ignorance is the name of the game. Humans are bound to make errors, but not 100% of the time. These mistakes, (or the lack thereof) are what create profit and loss in the economy. Outside of a free market economy, profit and loss are generated through exploitation (of workers, companies, natural resources, etc.), coercion, and monopolies (subsidies).
Mises, Ludwig Von. “Profit & Loss.” Mises Institute. Mises Institute, n.d. Web. 5 Feb. 2016. <https://mises.org/library/profit-and-loss-0>.
Create a reading list (equivalent to that of roughly 8 books) for this coming summer. The books you choose should focus on either business, personal finance, and/or economics.
Each of the books I have chosen were picked from the suggested reading lists in this weeks lessons. I also left the majority of the other book suggestions (which I did not choose) at the bottom of the page.
The first book I picked (at almost 200 pages) is called Why Didn’t They Teach Me This in School? 99 Personal Money Management Principles to Live By, by Carey Siegel. I chose this book first because it covers a broad range of principles at a few pages a piece; I think it will be an impacting way to begin my summer reading.
The second book I picked is called What Has Government Done To Our Money, and like many other books on the suggestion list, it was written by Murray Rothbard. Being a short book, it doesn’t fail to cover crucial topics in understanding the gold standard, the history of money, and the barter system.
The third book I picked to read this summer was written by Bob Murphy, and while being officially titled The Great Depression and The New Deal, it is also known as the “Politically Incorrect Guide to The Great Depression”.
The fourth book I chose is How Capitalism Saved America, by Tom DiLorenzo; I am rusty in my economic history and this will hopefully be a good book to help me brush up.
The fifth book I’ve chosen is The Cause of The Economic Crisis, by Ludwig von Mises (who also appears on the suggestion list quite a few times).
The sixth book I’ve chosen is called Economic Policy: Thoughts for Today and Tomorrow, by Ludwig von Mises.
The seventh book I chose is called Trade Offs, by Harold Winter. It covers the economic “trade offs” between safety/quality, and expense.
The eighth (but not the last) book I’ve chosen to add to my reading list this summer is The Road To Serfdom, by F.A. Hayek.
Other Books On The Suggestion List Included:
- Applied Economics by Thomas Sowell
- A Beginners Guide to Investing: How to Grow Your Money The Smart and Easy Way by Frey, Frey and Byte (100 P)
- Common Sense Economics by Gwartney, Stroup, Lee, and Ferrarini
- Personal Finance for Dummies by Eric Tyson
- America’s Great Depression by Murray Rothbard
- The Money Book for the Young, Fabulous, and Broke by Suze Orman (400 P)
- Economics in One Lesson by Henry Hazlitt