While Economics in One Lesson is almost the definitive starting point for those new to the Austrian School, after you have finished reading it there still remain many mysterious doors in front of you in a maze of subjective choice, all of them tempting you towards the next port of call in your quest to shake off the nostrums of Keynesian economics.
There are perhaps two major pathways to explore in this maze. The first is to acquire an Austrian-style understanding of what is currently happening in the financial markets and the global economy. To do this, we must first understand how the international central banking system works, which is based upon fractional reserves; So what is fractional reserve banking? When did it start? Why did it start? Who started it? How does it work? And where will it take us?
As Churchill said of the old Soviet Union, fractional reserve banking is a riddle wrapped in a mystery inside an enigma. Therefore, to see inside it we need to be guided into this enigmatic riddle by a man wearing X-Ray glasses. This bespectacled man is Murray Rothbard, and the book in which he makes it all sharply clear as day is The Mystery of Banking (which is freely available as a beautifully produced Scribd book).
But before we head off gleefully down this pathway, you might want to consider tackling the second major pathway instead, which is the road to understanding what has been happening in the financial markets and the global economy for the past several hundred years (or even for the past few thousand years, since financial markets were first created in Sumeria, Egypt, Meso-America, and China, and possibly before even that in the Stone Age).
The first major milepost on this second road is the book Human Action, by Ludwig von Mises, perhaps the outstanding publication of the entire Austrian School, since 1870 onwards.
However, Human Action is a forbidding book which can easily scare off the faint of heart. To warm yourself up for it, you might consider a much lighter book instead, which is Economics for Real People (PDF), by Gene Callahan, who has broken his book down into four major parts, all of which make Human Action much easier to access afterwards:
- The Science of Human Action
- The Market Process
- Interference with the Market
- Social Justice, Rightly Understood
Mr Callahan’s book is a sort of half-way house between Economics in One Lesson and Human Action, and at just over 300 pages is meaty enough to give you something to get your teeth into, but short enough to give you time to breathe in and out while you’re reading it.
In the meantime, before deciding which one of the two parallel pathways to go down first, while completing Economics in One Lesson, you might want to watch a series of videos put together by The Mises Institute, each of them covering a single chapter of Hazlitt’s classic introduction to the Austrian School:
- Video 1: The Lesson
- Video 2: The Broken Window
- Video 3: Public Works Mean Taxes
- Video 4: Credit Diverts Production
- Video 5: The Curse of Machinery
- Video 6: Disbanding Troops and Bureaucrats
- Video 7: Who’s Protected by Tariffs?
- Video 8: “Parity” Prices
- Video 9: How the Price System Works
- Video 10: Minimum Wage Laws
- Video 11: The Function of Profits
- Video 12: The Assault on Saving
These videos are all available via a misesmedia playlist.