The Economic Way of Thinking

By Paul Heyne, Peter J. Boettke, and David L. Prychitko

12th ed., 2009. New Jersey: Prentice Hall






"Ideal for those with little or no background in economics, this book provides an in-depth discussion of a limited, but crucial set of economic principles and concepts--then applies these tools of analysis to a wide variety of familiar situations."



"The Economic Way of Thinking develops the basic principles of micro- and macroeconomic analysis, and rigorously employs them as tools rather than ends unto themselves. This book introduces readers to a method of reasoning; to think like an economist—teaching through example and application."


"The new authors have made a serious and successful attempt to maintain the comfortable narrative style of Heyne's previous editions. In my role as a teacher ... I am delighted with the direction of change as well as the reordering of chapters. From what I have seen of the Tenth Edition, there are discussions that are entirely appropriate for my audience and they are pitched at approximately the right level of reading skill and experiential background."


— Joseph Fuhrig, Golden Gate University


"It is a bit like Zen economics ... It is an excellent introduction to economics text that explains not only some of the technical aspects of economics (supply and demand, comparative advantage, marginal analysis, etc.) but also the social science dimensions of the discipline (and sometimes the philosophical and ethical aspects of the discipline). It uses language, as opposed to math or graphs, to convey the concepts. Heyne is very clever and the book is beautifully written. I think it stands in the first rank of introductory economics texts along with Samuelson and Alchain & Allen..."


 Mark McNeil, Irvine Valley College, California


"The strengths of this text are its intellectual approach—it seems to be written as a whole and not just a few principles chapters thrown together..."


 James Swofford, University of Southern Alabama

A Tribute to Paul Heyne (1931-2000), by Douglass North

On a rare occasion, if you are fortunate, you will run across an individual who lives and acts upon the ideals that we profess. I was fortunate. Paul Heyne came into my life in 1975. Out of the blue, he sent me a letter that began as follows:

I’m going to be moving to Seattle at the end of the current academic year and I’d like to find a college or university in the city at which I could be an economics teacher. Those are two separate decisions. I’ll be moving to Seattle whether or not I find a position in an economics department there. But teaching and especially the teaching of introductory economics is one of the things I think I do well and something I would continue doing.

I had assumed the chairmanship of the department of economics at the University of Washington in 1967 and set out to make it one of the best in the country. My definition of best included not only scholarly eminence, which we were in the process of achieving, but the effective, caring teaching of the multitude of undergraduates that populated a large state university. The University played lip service to good teaching but the reward system was geared to publication and most, but not all, of my colleagues acted accordingly. Shortly after assuming the chairmanship, I decided I should go back to teaching the introductory course to see just what we did. I was dismayed to find that it had not changed an iota form my undergraduate days. The textbooks were full of the formal jargon of economic theory elucidating the perfectly competitive model, imperfect competition a la Chamberlin and Joan Robinson, and monopoly replete with all the marginal analysis and appropriate graphs. Following the tradition, I was in the midst or my fourth lecture on perfect competition illustrating it with the case of American agriculture when a student in the back of the auditorium noisily took exception to what I was saying. I thought I would teach him a lesson and invited him the address the class, explaining himself. He did, describing effectively the myriad of price supports, milk marketing acts, sugar production subsidies, etc. that pervaded agriculture and made it far from the competitive model. I slunk back to my office and began a search for a more effect teaching program. I was some year into an attempt when Paul’s letter arrived. I wrote back asking what he would like to do as a teacher. His reply, in part:

I would like to teach at a college whose faculty was enthusiastically committed to providing a liberal education for undergraduates. I would like to be a member of a faculty that was continuously asking about the nature and significance of liberal education and looking critically at its own efforts to provide one. The members of such a faculty would use their own disciplines as bases for venturing into other disciplines and not as castles within which to enjoy untroubled lives. In the college of my fantasies, there would be some core requirements for all to satisfy; not so much because anyone can specify particular knowledge that a liberally educated person must have as because a liberal arts college requires some common core if it wants to be a lively intellectual community. Mastery of the core would be expected first of all of faculty members. (I’ve often thought how much more profitable faculty curriculum discussions would be if every faculty member knew that he would be taking all courses imposed on undergraduates and that his colleagues would be evaluating any course he himself wanted to offer in the common core.)

Paul left a tenured professorship at Southern Methodist university to come to Washington as a non-tenured lecturer and he retained that untenured rank until he died in March 2000. I am not sure we lived up to Paul’s fantasies of the ideal faculty; I know we didn’t but he did change the way economics was taught at the University; revamping the undergraduate program, overhauling the introductory course, and meeting regularly with the graduate teaching assistant to improve the quality of their teaching. But much more than that, Paul was a continuing inspiration for those of us who took seriously a quality liberal education for undergraduates.

The Economic Way of Thinking embodies Paul’s approach to economics and to a liberal education. It was a radical change from the textbooks of the time. Its focus on the problems of a society and the way in which economic reasoning could shed light on those problems made economics interesting to the students. More than that, the book recognized that the strength of economics was precisely described in the title of the book – as a way of thinking. Comprehending that way of thinking was, and continues to be, the revolutionary contribution of economics to the social sciences and to a better understanding of the world around us.

I open the seminar for freshmen that I teach every fall with a lecture on Paul, the human being – his Seminary education, ordination, the way he got drawn into economics, and the way he combined a rigorous economics (and make no mistake about it, Paul’s economics is rigorous) with a broad and active concern for community and social welfare. He believed in individual freedom and the demands that that freedom imposed on responsible human beings. And he and his wife, Julie, lived their lives accordingly.