How an Economy Grows and Why It Crashes

I N T R O D U C T I O N
* To read Irwin’s complete testimony, please see Appendix A of The Biggest Con: 
How the Government Is Fleecing You, (Freedom Books, 1978)
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story, he decided to develop an entire illustrated book around 
it. How an Economy Grows and Why It Doesn’t was fi rst 
published in 1979, and went on to achieve quasi-cult status 
among devotees of Austrian economics. 
Thirty years later, as I watched the United States’ economy 
head off a cliff, and as I watched our government repeating 
and redoubling the mistakes of the past, my brother and I 
thought it would be an ideal time to revise and update “The 
Fish Story” for a new generation.
Certainly, there has never been a greater need for a dose 
of economic clarity, and the story is the best tool we know 
of to give people a better understanding of what makes our 
economy tick. 
This version is in many ways more ambitious than the one 
Irwin drafted 30 years ago. Our scope is wider, and our 
attempt to incorporate the historical sequence is deeper. 
In fact, the story would best be described as a riff on the 
original. 
We hope that the book can appeal to the kind of people who 
typically go numb when they hear economists drone on about 
concepts that seem to have nothing to do with reality. We 
intend to show that the model proposed by the Keynesians, 
whereby governments can spend without consequence in 
the belief that worthless money can be an effective economic 
lubricant, is false and dangerous. 
The bad news is that when you take off the rose-colored 
glasses that all of our economists have forgotten they are