How an Economy Grows and Why It Crashes

I N T R O D U C T I O N

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of any intrinsic value would lead to massive infl ation and 
unsustainable government debt. This minority opinion was 
completely ignored, and gold backing was removed.*
Contrary to everything the economists had predicted, the 
availability of additional reserves failed to stop the outfl ows 
of gold. Finally, in 1971 President Richard Nixon closed the 
window, which severed the dollar’s last link to gold. At that 
point, the global economic system became completely based 
on worthless money. Over the next decade, the United States 
experienced the nastiest outbreak of infl ation in our history 
and gold headed towards $800 per ounce. 
In 1972 Irwin set out to write his fi rst major attack on how 
Keynesian economics was putting the United States on an 
unsustainable economic course. His book The Biggest Con: 
How the Government Is Fleecing You, enjoyed wide-spread 
critical acclaim and decent sales. Among the many anecdotes 
the book contained was a story about three men on an island 
who fi shed with their hands. 
The story had its genesis as a simple time killer on family car 
trips. When caught in traffi c, Irwin attempted to entertain his 
two young sons with basic lessons of economics (any boy’s idea 
of a perfect afternoon). To do this he almost always resorted to 
funny stories. This one became known as “The Fish Story.”
The allegory served as the centerpiece of a chapter in The 
Biggest Con. About eight years later, after so many readers 
had commented to him about how much they loved the