Whatever Happened to Penny Candy? is a rather simple guide to economics written as a series of letters from “Uncle Eric.” I have read numerous economics books big and small and few offer the fun and engaging lessons in economics. Perhaps the best thing that I can say about this book is that I learned a lot…a whole lot as evidenced by the number of post-it tabs flagging my volume. Author Richard J. Maybury spends a great deal of the book on inflation and this excerpt hits home;
“People also knew that money responds to the law of supply and demand just as everything else does. As the number of dollars increases, the value of each individual dollar falls. Prices rise to make up for this fall. Rising prices are not inflation. They are a result of inflation. When crooks expand the money supply, this is called counterfeiting. When governments do it, it is called ‘monetary policy,’ but it is the same thing, inflation. In both cases it causes devalued money and rising prices. Few governments want us to understand what they are doing. Most have redefined inflation to mean rising prices. This draws attention away from the money supply.”
Other key topics include Natural Law (you may have heard of them as our “unalienable rights”) and a new term for me; TANSTAAFL. TANSTAAFL is true in that there ain’t no such thing as a free lunch. You’ll have to read the book to learn what TANSTAAFL is. By the way the price of penny candy did not increase, the value of the penny decreased.
I look forward to reading more from Uncle Eric.