Sections of the Book
It takes skill to drive a car or to be a quarterback. It likewise takes skill to be a successful, responsible citizen and to assemble the ingredients of a great life. Skills cannot simply be handed to you. In science fiction, characters can download programs that make them instantly and effortlessly able to play a piano, fly a helicopter, or speak Russian, but in real life, developing a skill takes work.
This book is about that world, the world to which you want to contribute when you leave school. You did not invent that world. Realistically, neither did anyone else. A lot of it just happened. It didn’t happen according to anyone’s plan. The question for you is, what next?
Part 1: Key Concepts
In this part of the book, you will study powerful tools for understanding economic phenomena. Some of the most central economic concepts are also ethical concepts. You also will study ethical and entrepreneurial aspects of the challenge of building a good life as a productive member of an economy.
Part 2: Progress
How would you know whether you are making progress? You could start by deciding what to count as progress. One obvious question to ask yourself is what you really want out of life. Once you have an answer, then you can proceed. You can measure your progress by asking whether you are getting closer to achieving your goals. One problem with this way of proceeding is that when we are really making progress, we are not simply making progress toward achieving goals that we had when we were in high school. Rather, in any real human life, our goals themselves are a moving target. As we get older, we develop more mature ideas about which goals are worth wanting. That means we need to keep an open mind about whether the time has come to revise our goals. It is your life. You have the right and the responsibility to reconsider the value of your goals. That is what a satisfying life is like.
Part 3: Understanding Trade
Trade enables us all to make ourselves useful to each other. When we exchange goods and services, we enhance mutual well-being. In short, the more people trade, the more their communities flourish. How, though, do we settle on the terms of exchange, which means, ultimately, how do we settle on the prices at which our services are exchanged? Are price changes predictable? Can they be made more predictable? What is a cooperative surplus? How is it generated? How is it distributed? How are these things affected by market structure, regulation, and current events?
Part 4: Trust, Agency, and Bystanders
Communities are networks of cooperation. Successful communities grow, and the networks that compose them become more complex. Businesses expand. Companies begin to hire large teams of employees. Those employees become the company’s eyes and ears. They need to understand what the company is trying to do and who it aims to do business with. Employees are the owner’s agents, and that is just the beginning of the growth in complexity. We have not even mentioned shareholders, trustees, contractors, or any number of people directly or indirectly involved with the business. In short, as a company becomes more complex, the people who run it can no longer do everything themselves. They have to delegate.
Part 5: Management of a Commercial Society
Commercial societies, and the economies upon which they are built are complicated arrangements involving, in many cases, hundreds of millions of people, each with their own goals and aspirations. They do their best to achieve their own ends in a broader context defined by everyone else’s doing exactly the same thing. Things work for the most part, but there is always friction when people have goals that might conflict with those of others. How can we keep things working well enough to allow people sufficient freedom to pursue their goals, which offering sufficient protections to everyone at the same time? The answer that we have come to over a long period of serious thought, not to mention a lot of trial and error, is that functional institutions and sound policy can make the critical difference in this important task.
Part 6: Personal and Business Finance
Earning money is no guarantee you will be able to live well, or help others live well, later in life. To live well later in life, you need to save and invest wisely. To know how to save and invest wisely, you need to understand the role of financial institutions as well as when to use credit, and how to best save and invest for the future.
Part 7: Innovation and Entrepreneurship
Innovation and entrepreneurship are deeply related concepts in commercial society. Indeed they are inextricably linked. Ideas are the beginnings of great entrepreneurial ventures, but they are only the beginnings. Innovation has to be operationalized, and entrepreneurs are pivotal in both identifying new possibilities, and in bringing those possibilities, ultimately, to market.