How an Economy Grows and Why It Crashes by Peter and Andrew Schiff

Peter and Andrew Schiff wrote How an Economy Grows and Why It Crashes based on the book by their father, Irwin, How an Economy Grows and Why It Doesn’t. It combines simple explanations and cartoon-like illustrations on almost every page to lay out clearly the effects of government intervention in the market.

It begins with three men on a Pacific-style island who work all day to catch one fish with their bare hands–just enough to survive. One of them, Abel, finally gets tired of sustenance living and his desire for more leads him to invent a net. Abel has to go without eating for an entire day (since it usually takes him all day to catch his food supply) to have the time needed to build his net. But his efforts paid off, as he netted two fish in just a matter of hours the next day with his new invention.

From there the island economy takes off and their way of life is changed forever. However, when the island gets big enough that a government is formed, regulations and intervention in the money supply begin to unravel much of the prosperity brought about by the previously unregulated market. Crafty politicians, though, are able to hide their role in the problems of the island and continue to get elected and mess things up even more.

Sound familiar?

My 11-year-old son loved the book as I read it to him, but it also helped me see more clearly some of the ways that government today destroys the fruit of the creativity and industry that God has given to each of us.