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How an Economy Grows and Why It Crashes
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How an Economy Grows and Why It Crashes

4.09 of 5 stars 4.09  ·  rating details  ·  1,539 ratings  ·  177 reviews
How an Economy Grows and Why it Crashes" uses illustration, humor, and accessible storytelling to explain complex topics of economic growth and monetary systems. In it, economic expert and bestselling author of Crash Proof, Peter Schiff teams up with his brother Andrew to apply their signature "take no prisoners" logic to expose the glaring fallacies that have become so in ...more
ebook, 256 pages
Published April 30th 2010 by Wiley (first published January 1st 1393)
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Jay
If you read this one book, and then formulate your opinions about the market with this material alone, you are a moron. This book will forever stick in my memory as a yardstick to determine intelligence by. I told my wife that it isn’t bad, per se. It’s just stupid, wrong, and written for a 5th grader. Admittedly, it simplifies a huge problem in a concise manner… but that’s the problem. It is such an oversimplification that it allows the author to subtly interject erroneous beliefs into the narr ...more
Jarrod Jenkins
Peter Schiff exposes the flaw in Keynesian economics through the use of an extended allegory or parable. His story involves an island nation that grows from subsistence living to great prosperity and then declines. The island nation represents the United States. The story serves as a warning against Keynesianism.

In the beginning, there are only three men. Each man catches and eats one fish per day. Then, one man decides to forgo his meal for the day to build a net, which proves successful and su
...more
Jeremy

This book is pure, unadulterated genius.

It explains where we’ve come from and where we’re headed. It explains how Keynesian ideas have prospered over Austrian economics, even though they are utterly, hopelessly wrong and are ruining our country. I cannot recommend this highly enough to anyone who cares about America. I read it in two days, easily, and so can you. Who doesn’t have two days to change their life?

Quotes:

We are told that we must go deeper into debt to fix out debt crisis, and that we
...more
Nilesh
This book reflects my views and style more than anything I have read that's not my own. Hence the rating could not have been any different!

Economic theories need to be de-jargonized every now and then to understand the stupidity of some of the things that policymakers do or are recommended to do. Extremely few people, with many experts excluded, tend to understand the basic meaning of some their pet economic solutions or policies. Complex theories effectively lead to equivocation, obfuscation of
...more
Andrew Fish
Fun, but flawed.

As a basic primer on the evolution of economies, this book is a light and fluffy start for the layman. Where it is flawed, however, is that it's written with a conclusion already in mind and the analogy on which it builds is therefore twisted to suit that view. The trouble is that the gold standard, which this book extols, is not the same as an economy based on fish - fish being a resource which can be replenished and grown. A real economy, based on gold, can only be stifled by t
...more
Nathaniel
Very entertaining and a remarkably easy read. Schiff argues compellingly that the basic principles of an economy remain basically the same between large and small economies. He allegorizes how an economy grows in the story of small fishing economy, providing many clear insights in economics along the way.
Hikmat Kabir
Pretty radical stuff this. Peter Schiff appeals for a lot of drastic ideas that can come off as a bit profound. I've felt this way more so due to the fact that this is my first time encountering the Austrian school of economic thought compared to the usual Keynesian theories I've been taught all my life. The writing is pretty simple and easy and can be finished in under an hour. The last few chapters are a bit complicated and could have used a lot more details. Anyhow, its a pretty good book on ...more
Michael Seufert
This book sets up quite a simple metaphor to describe modern-day economies. By placing us on a deserted island and building up an economy based on fish from scratch, Peter Achiff illustrates a lot of different points from today's economics.

Schiff is a very good writer and opinion-maker and he follows reasonings that are simple and therefore may sometimes be simplistic. It still is a good book if you are looking to learn about a different economic point of view than the Keynesian crap they feed y
...more
Bill Peacock
Peter and Andrew Schiff wrote this book based on the book by the father Irwin. 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 withou ...more
Lynda Un
This is the first book I have read two times back to back. For economics majors who were (only) exposed to Keynesian economics, this book serves as a wake-up call. The book's substance and argument are profound despite its 'fun' tone with the wonderful cartoons displayed throughout and its compact size and accessible language; no American should go about their lives without reading it. When reading the news about how Fed pondering raising interest rates later in 2015 since they claim the economi ...more
Miroslav Krajnak
This is my review on Amazon dated October 22, 2013:

The book walks you through the basics of "island economics," in which FUNDAMENTAL ECONOMIC PRINCIPLES in a hypothetical three-man (initially) economy are explained.

It is basically an allegory of the US economic history riddled with lots of illustrations that add visual dimension to the humor in which the authors present the story. No, a touch of humor does not at all downplay the seriousness of the subject matter, nor does it detract anything fr
...more
Ben Garner
This is a fun and very accessible allegory to explain the fundamentals of economics. It starts off depicting an island society (Usonia) consisting of three people who live at barely above subsistence level, who through the course of risk taking and sacrificial saving, begin to innovate. As people from outside the island begin to emigrate there, specialization of tasks allows society to become more advanced and the standard of living to go up, all while free market fundamentals remain.

Meanwhile,
...more
Mohammad
داستانی جذاب و ساده برای بیان مسائل اقتصاد کلان
اگر علاقه مند به اقتصاد هستید و دنبال پیش زمینه ای در این موضوع هستید این کتاب رو از دست ندهید
داستان یک جزیره خیالی که با سه نفر شروع به رشد میکند ، رونق میگیرد ، وارد رکود میشود و سپس به بحران کشیده میشود
نکته زیبایی که در این کتاب وجود داشت این بود که نویسندگان با ظرافت تمام ، به مشکلات اقتصادی کشور خود پرداخته بودند و از طنز و تصویر توامان بهره برده بودند
ایکاش ازین دست کتابها درباره ی مسائل مختلف کشور ما ، نوشته شود
Craig

This richly illustrated allegory traces the economic history of the United States through to its inevitable conclusion. The story takes place on a tropical island where hunter-gatherers struggle daily to catch fish by hand for their basic survival. One person takes the personal risk of forgoing his daily fish to make a net, and the resulting increase in productivity is the start of an island economy which develops and becomes increasingly dynamic and complex.

The key thought, emphasised repeatedl

...more
Rohan Rajiv
First, let me get the obvious out of the way – yes, this book isn’t perfect. It can be very simplistic at times and the writer does have a clear political agenda against the US government’s financial policy.

Now that I’ve said that, this book is a must read for everyone. I say everyone because we all deserve to understand how an economy works. The authors lay out the principles of economics and call bullshit on the idea that micro economics is essentially different from macro economics. They do i
...more
Janet
Author made it so easy to learn basic economics with his simple analogy of an small island based on the economy of fish. I would highly recommend this book except about a 1/3 of the way through it gets so political and throughly bias. You do walk away from reading this book though thinking of the bad shape that our economy stands upon and the waste of our wealth based on our "consumption" economic mentality.
Jadd Khayat
I admire Peter a lot. I believe he is well versed in the field of economics, and is intelligent in predicting strategic investment ideas. Examples would be rising gold value and falling dollar value/ against 90 percent of all foreign currencies. He predicted the 08 mortgage backed securities problem, and is predicting the fall of the US dollar.

HOWEVER!!!
I am really really disappointed in this book. Peter tells a tale of a city that is based on the currency of fish while adding in simple economic
...more
Hans
Underlying thesis of this book "The Current Global Financial System is a House of Cards and when the rest of the world catches on that the US Dollar is essentially worthless we are all in big trouble". The history of the US Created Global Financial system will someday be remembered as the greatest Con of the World's wealth mankind has ever known. Most people have no idea where the dollar gets its value, and the truth is that its value is based entirely people believing it has value, specifically ...more
Rick
I liked the book for what it is. It's simple and concise. Nice book. Jay however, and others like him, always amaze and confound me. Why would an "expert" such a the Jays of the world read a book like this anyway as fundamental as it is? Shouldn't they be reading something on a higher plane? I mean, come on, anyone can berate a book like this spewing their opinion appearing to be an economics guru.

I think people expected too much out of this and thus maybe THEY should be writing? ;)

Read this bo
...more
Evan McB
Inflation is an increase in the supply of money. High prices are not strictly inflation, only a symptom of inflation, because an increased amount of printed money necessarily devalues the money in existence. In times past, governments were limited in the amount of fiat currency that they could print because the currency was redeemable for precious metals like gold and silver. Today, in the USA, the Federal Reserve does not have to exchange printed fiat currency (dollars) for any standard natural ...more
getAbstract
The economy in a microcosm: A fun fable about fishermen

Talk about economics for even a few minutes, and watch your listeners’ eyes glaze over. But tell them a story that grabs their attention and makes them smile – then you can teach them anything. That’s the tactic controversial Libertarian Irwin Schiff used to teach his sons – brokers Peter D. Schiff and Andrew J. Schiff – the basics of economics. The Schiff brothers have cleverly updated their dad’s “fish story,” first published in 1979, to s
...more
Gary
Did you ever wish you could find a short primer in economics that debunked the myths of Keynesianism in a concise form understandable to the layman? Look no further; the book has been written.

I just finished reading this witty, entertaining, and informative work, authored by one of the most talented and astute investment advisors in the country. The story, told as an allegory, traces the rise of a free-market economy and its eventual destruction by Keynesian and other socialistic fallacies.

The g
...more
John Boettcher
Although the book is firmly based around the axioms of the Austrian School of Economics, Schiff doesn't spend alot of time with the actual Austrian Theory of the Buisness Cycle or anything like that. He simply tells it like it is.

Why does parts of the economy and parts of the world thrive?

Why do parts of the economy and the world struggle so greatly.

Schiff tells it in such a down to earth fashion that anyone wanting to learn more about economics, what happened in the crash of 2008-2009 and wha
...more
Jeffrey Borrowdale
Expanded from parables about the economy told to the young Schiff brothers by their father Irwin Schiff (author of "Why An Economy Grows, and Why It Doesn't"), this book offers both a basic introduction to economics and an analysis of causes and cures of our latest economic problems.

It begins with three men on an island who are able to catch one fish per day with their bare hands, and goes on to describe how through savings, risk and increasing productive capacity through specialization and tech
...more
Brian C Albrecht
Peter Schiff, recently famous for crashing the Occupy protests while carrying a sign saying "I am the 1%, and his brother put out this book in honor of their father who is in jail for protesting the U.S. tax system. The Schiff brothers take a unique approach to explaining basic economics. Developing on the Robinson Crusoe model (how does the economy work for one person on an island?), this small book cruises through from 3 people on an island to a modern economy in a no time. The action of the s ...more
Desiree
An excellent book on economics. It is very simply written and I would recommend this for anyone. If economics has always bored you to tears, or you really don't understand complicated macroeconomics, this is definitely the book for you!

Starts off with three men stranded on an island. All they do is fish by hand, at first, and things grow from there. So simple, but a good way to learn about the big picture!

"The best thing about private capitalism is that it forces those who may only be motivated
...more
Clinton
Although the book only briefly illustrates the philosophy of Austrian Economics, How an Economy Grows and Why It Crashes is a wonderfully concise and entertaining story for those who are unfamiliar with Austrian Economics.
The story begins with explaining the nascent of an economy through Crusoe Economics. Economic growth is expanding the use of land and labor through production and savings by restraining present consumption for future consumption in support of more efficient uses by investing in
...more
Nicole
This book was fun and a very easy read. It's a good introduction to the Austrian School of economic theory for people who are terrified of economics.

Personally, I felt like I would have preferred a more general viewpoint, instead of going through US history exactly, complete with actual historical figures. Also, I felt like the fish metaphor started running into problems once the government had to debase the currency to keep funding things. It started turning a little too much into a running jo
...more
Gregory Torre
I thought that this book was very informational and is realistic of what really happens in reality. All civilizations like this one started off with just simple things, in this case catching one fish per day by hand, eat it sleep, repeat. Then one person had an idea to build something that would improve the efficiency of the island's fish. As the extra supply of fish built up, more leisurely tasks such as surfing, and making houses. Soon more islands sent people over and as the economy grew so d ...more
Rohan
There is absolutely nothing unexpected in this book if you understand Free Economics but Peter D. Schiff and his brother explains all there is needed to understand the topic using an Analogy (or a tale) that was originally developed by their father Irwin Schiff in his 1985 book "How an Economy Grows and Why It Doesn't". According to the Authors, the tale needed to be extended to cover the present state of the World Economy.

Because I had not read the original work, I found this book very amusing.
...more
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Peter David Schiff is an American investment broker, author, financial commentator, and was a candidate in the 2010 Republican primary for the United States Senate seat from Connecticut.

Schiff is CEO and chief global strategist of Euro Pacific Capital Inc., a broker-dealer based in Westport, Connecticut and CEO of Euro Pacific Precious Metals, LLC, a gold and silver dealer based in New York City.
...more
More about Peter D. Schiff...
Crash Proof: How to Profit From the Coming Economic Collapse The Real Crash: America's Coming Bankruptcy---How to Save Yourself and Your Country Crash Proof 2.0: How to Profit from the Economic Collapse The Little Book of Bull Moves in Bear Markets: How to Keep Your Portfolio Up When the Market Is Down The Little Book of Bull Moves: How to Keep Your Portfolio Up When the Market Is Up, Down, or Sideways

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“In Keynes’s time, physicists were first grappling with the concept of quantum mechanics, which, among other things, imagined a cosmos governed by two entirely different sets of physical laws: one for very small particles, like protons and electrons, and another for everything else. Perhaps sensing that the boring study of economics needed a fresh shot in the arm, Keynes proposed a similar world view in which one set of economic laws came in to play at the micro level (concerning the realm of individuals and families) and another set at the macro level (concerning nations and governments).” 1 likes
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