By Mark Skousen

April 21, 2016

Washington, DC (Thursday, April 21, 2016):  U. S. economic activity continued to slow dramatically in the 4th quarter 2015, threatening recession.  As a whole, the growth rate of the economy was anemic, almost flat, for 2015.

Gross output (GO), the new measure of total U. S. economic activity published by the Bureau of Economic Analysis, showed that spending throughout the economy declined slightly in the 4th quarter of 2015.  And the Skousen B2B Index — a measure of business spending throughout the supply chain — has now fallen two quarters in a row.  Both data suggest a mild business recession as we entered 2016.

Based on data released today by the BEA and adjusted to include all sales throughout the production process, nominal GO fell 0.6% in the 4th quarter of 2015, compared to an increase in the 3rd quarter (+2.3%)[1].   Adjusted GO was $39.0 trillion in the 4th quarter, more than double the size of GDP ($18.2 trillion), which measures final output only.  Nominal GDP actually rose 2.3% in the 4th quarter.  When GO declines relatively to GDP, it’s usually a sign of recession.

Deflationary pressure on prices continued in the 4th quarter, so that in real terms, the adjusted GO growth rate rose slightly.  But the rise in real GO (+0.8%) was less than the growth in real GDP (+1.4%).

Supply chain activity varied significantly in the 4th quarter, with continued declines in early-stage production: Mining activity fell by 11.4% and manufacturing declined by 2%.  Gainers were led by information, finance, real estate, rental, and leasing, but they were not enough to compensate for the losses in the early stages.  Wholesale and retail sectors also fell by 1.6%.


GO and GDP are complementary statistics in national income accounting.  Gross output (GO) is an attempt to measure the “make” economy; i.e., total economic activity at all stages of production, similar to the “top line” (revenues/sales) of a financial accounting statement. In April, 2014, the BEA began to measure GO on a quarterly basis along with GDP.

Gross domestic product (GDP) is an attempt to measure the “use” economy, i.e., the value of finished goods and services ready to be used by consumers, business and government. GDP is similar to the “bottom line” (gross profits) of an accounting statement, which determined the “value added” or the value of final use.

GO tends to be more sensitive to the business cycle, and more volatile, than GDP. During the financial crisis of 2008-09, GO fell much faster than GDP, and afterwards, recovered more quickly than GDP. Still, it wasn’t until late 2013 that GO fully recovered from its peak in 2007. The fact that the adjusted GO is now falling faster than GDP growth suggests that the economic recovery is losing steam as we enter 2016.

Real Business Spending (B2B) Suffers Decline

We have also created a new business-to-business (B2B) index based on GO data.  It measures all the business spending in the supply chain and new private capital investment.  Nominal B2B activity fell 0.8% from the previous 3rd quarter to $22.7 trillion.  In real terms, B2B fell 1.0%.  Meanwhile, consumer spending rose 0.6% to $12.4 trillion in Q4 (+0.3% in real terms).


“The GO data and my own B2B Index demonstrate that total US economic activity has slowed dramatically.  While the ‘use’ economy (GDP) is still barely growing, the ‘make’ economy (GO) is in recession,” stated Mark Skousen, editor of Forecasts & Strategies and a Presidential Fellow at Chapman University. “B2B spending is in fact a pretty good indicator of where the economy is headed, since it measures spending in the entire supply chain, and it indicates tepid growth and maybe even a downturn.”

Skousen champions Gross Output as a more comprehensive measure of economic activity. “GDP leaves out the supply chain and business to business transactions in the production of intermediate inputs,” he notes. “That’s a big part of the economy.  GO includes B2B activity that is vital to the production process. No one should ignore what is going on in the supply chain of the economy.”

Skousen first introduced Gross Output as a macroeconomic tool in his work The Structure of Production (New York University Press, 1990). A new third edition was published in late 2015, and is now available on Amazon.

Click here: Structure of Production on Amazon

The BEA’s decision in 2014 to publish GO on a quarterly basis in its “GDP by Industry” data is a major achievement in national income accounting. GO is the first output statistic to be published on a quarterly basis since GDP was invented in the 1940s.  With GO and GDP being produced on a timely basis, the federal government now offers a complete system of accounts. As Dale Jorgenson, Steve Landefeld, and William Nordhaus conclude in their book, A New Architecture for the U. S. National Accounts, “Gross output [GO] is the natural measure of the production sector, while net output [GDP] is appropriate as a measure of welfare. Both are required in a complete system of accounts.”

Skousen adds, “Gross Output and GDP are complementary aspects of the economy, but GO does a better job of measuring total economic activity and the business cycle, and demonstrates that business spending is more significant than consumer spending,” he says. “By using GO data, we see that consumer spending is actually only about a third of economic activity, not two-thirds that is often reported by the media. As the chart above demonstrates, business spending is in fact almost twice the size of consumer spending in the US economy.”

Note: Ned Piplovic assisted by providing technical data for this release.

Special Announcement

Cato Institute Luncheon and Policy Forum on Gross Output,

Friday, May 13, Washington, DC, 11:00 am – 1 pm ET.

Mark Skousen, Steve Forbes and George Gilder will be speaking at the Hayek Auditorium at the Cato Institute, 1000 Massachusetts Ave. NW, Washington, DC 20001, on the topic, “GO Beyond GDP: What Really Drives the Economy?”  The discussion will focus on gross output (GO) and how to encourage long-term economic growth, and what it means to investors, businesses and government policy.  The panel will be moderated by Peter Goettler, president of the Cato Institute.  Afterwards, we will have a luncheon and autograph session for the various author’s books:  Mark Skousen, “The Structure of Production”; Steve Forbes, “Reviving America”; and George Gilder, “The Scandal of Money.”

Lunch is complimentary.

To register, go to

Or email or call (202) 789-5229.

If you can’t make it, you can see this event live by going to

For More Information

The GO data released by the BEA can be found at under “Quarterly GDP by Industry.” Click on interactive tables “GDP by Industry” and go to “Gross Output by Industry.” Or go to this link directly:

For more information on Gross Output (GO), the Skousen B2B Index, and their relationship to GDP, see the following:

Mark Skousen, “At Last, a Better Way to Economic Measure” lead editorial, Wall Street Journal, April 23, 2014:

Steve Forbes, Forbes Magazine (April 14, 2014): “New, Revolutionary Way To Measure The Economy Is Coming — Believe Me, This Is A Big Deal”:

Mark Skousen, Forbes Magazine (December 16, 2013): “Beyond GDP: Get Ready For A New Way To Measure The Economy”:

Steve Hanke, Globe Asia (July 2014): “GO: J. M. Keynes Versus J.-B. Say,”:

New:  Mark Skousen, “Linking Austrian Economics to Keynesian Economics,” Journal of Private Enterprise, Winter, 2015:

To interview Dr. Mark Skousen on this press release, contact him at, or Ned Piplovic, Media Relations,  at

# # #

[1] The BEA currently uses a limited measure of total sales of goods and services in the production process. Once products are fabricated and packaged at the manufacturing stage, the BEA’s GO only adds “net” sales at the wholesale and retail level. Its official GO for the 2015 3rd quarter is $31.6 trillion. But by including gross sales at the wholesale and retail level, the adjusted GO is $39.0 trillion at the end of 2015.  Thus, the BEA omits $7.5 trillion in business-to-business (B2B) transactions in its GO statistics. We include them as a legitimate economic activity that should be accounted for in GO, which we call Adjusted GO.  See the new introduction to Mark Skousen, The Structure of Production, 3rd ed. (New York University Press, 2015), pp. xv-xvi.


March 9, 2016: Today marks the 240th anniversary of the publication of “The Wealth of Nations,” by Adam Smith. On this day Dr. Mark Skousen is also pleased to announce the publication of the new third edition of his bestselling history, “The Making of Modern Economics.”

Making of Modern Economics 3rd edAs you can see from the cover, the heroic figure in Skousen’s book is Adam Smith and his “system of natural liberty.” (Interestingly, the official pub date of the first edition of Skousen’s history was March 9, 2001.) All of the “worldly philosophers” – Ricardo, Say, Mill, Marshall, Menger, Marx, Fisher, Keynes, Schumpeter, Friedman, Krugman — are judged as defenders or critics of the great Scottish philosopher, and whether they advanced or attacked the House that Adam Smith Built.

Routledge, the top British academic publisher (famous for publishing the works of Hayek, another hero in Skousen’s work), is now the publisher of this bold history of the great economic thinkers.

What’s new in the third edition?

What’s the new edition all about?

First, Skousen expands his chapter on Adam Smith, including a new discussion and quotations from Smith’s “Theory of Moral Sentiments.” He also comments on the startling new discovery that Smith’s singular reference to the famous “invisible hand” metaphor is located in the mid-point of both “The Wealth of Nations” and “The Theory of Moral Sentiments.” Purposeful or coincident? Find out in chapter 1, “It All Started with Adam.”

Second, the third edition updates the chapter on Karl Marx, particularly the resurrection of the Marxist-inspired “liberation theology” in Latin America, with comments about Pope Francis and his severe criticism of capitalism. The growth of socialism and corruption in Latin America is discussed.

Third, the final chapter, “Dr. Smith Goes to Washington: Market Economies Face New Challenges,” has been completely revised. Here Skousen focuses on the West’s decline in economic freedom in consequence of higher deficits, taxes and regulations, and the growing debate over inequality, austerity, and the need for a new brand of capitalism following the financial crisis of 2008. The chapter ends on a positive note, with discussions on the advances in game theory, auction design, experimental economics, behavioral finance, and other aspects of the new “imperial” science.

How to Buy a Copy

The third edition (500 pages) of “The Making of Modern Economics” is available in hardback, paperback, Kindle, or audio. You can order on Amazon here:

The new edition is also available directly from the author at a discount. Amazon charges $47.95 for the paperback, but you can buy directly from the author by calling toll-free 1-866-254-2057. You pay only $30 plus $5 P&H. (Orders from outside the US, please add $15 extra for airmail–$45 total.) Or order online at

Awards and Translations

In 2009, “The Making of Modern Economics” (the 2nd edition) won the Choice Book Award for Excellence in Academia. It was recently ranked #2 in the Ayn Rand Institute’s Top Ten List of “Must Read Books in Economics.” It has been translated into five languages — Spanish, Chinese, Turkish, Mongolian and Polish.

What’s Different about “The Making of Modern Economics”?

Skousen’s history is a bold, new account of the lives and ideas of the great economists–Adam Smith, Karl Marx, John Maynard Keynes, Ludwig von Mises, Milton Friedman, and many others–all written by a top free-market economist. Presented in an entertaining and persuasive style, Professor Mark Skousen tells a powerful story of economics, with dozens of anecdotes, illustrations and photographs of the great economic thinkers.

First and foremost, Skousen tells the remarkable untold story of free-market capitalism’s long-running battle against Keynesianism, Marxism, socialism and other isms. It is an account of high drama with a singular heroic figure, Adam Smith and his celebrated “system of natural liberty.” The running plot involves many unexpected twists and turns; sometimes our hero is left for dead, only to be resuscitated by his free-market friends; the story even has a surprise ending.

A Full-Scale Critique of All Major Doctrines

All previous histories tend to give a dry, disjointed, and helter-skelter account of economists and their contradictory theories. But Skousen unifies the story of economics by ranking all major economic thinkers either for or against the invisible hand doctrine of Adam Smith. Thus, Marx, Veblen and Keynes are viewed as critics of Smith’s doctrine, while Marshall, Hayek and Friedman are seen as supporters.

Using this ranking system, The Making of Modern Economics offers a full-scale review and critique of every major school and their theories, including classical, Keynesian, monetary, Austrian, institutionalist and Marxist.

A Complete History

Skousen’s history is comprehensive. He makes a point of discussing all schools of economics and not just the ones he agrees with. Too many economists have omitted major characters from the history of economics, a practice bordering on intellectual dishonesty. Robert Heilbroner’s popular book, The Worldly Philosophers, for example, virtually ignores the laissez-faire French, Austrian and Chicago traditions. (His latest edition does not even mention Milton Friedman by name!)

Think of The Making of Modern Economics as a contra-Heilbroner history.

It’s a perfect antidote to all those biased, inaccurate attacks on the free market and its proponents.

Skousen records the lives and ideas of important economists often ignored in other histories, such as Montesquieu, Ben Franklin, J. B. Say, Frederic Bastiat, Friedrich List, Herbert Spencer, Ludwig von Mises, Knut Wicksell, Philip Wicksteed, Max Weber, Irving Fisher, Roger Babson, Frederick Taylor, A. C. Pigou, Joan Robinson, Murray Rothbard, and the three Paul’s: Paul Sweezy, Paul Samuelson and Paul Krugman.

Skousen’s book also restores the vital role of the Austrian and Swedish schools in the marginalist revolution and the development of monetary economics. It emphasizes the impact of other disciplines on economics, such as evolution, sociology, and religion.

“Tell All” Biographies

Skousen’s book brings history alive with exciting new insights into the lives of the great economists through in-depth biographies and the author’s own research, revealing an amazing tale of idle dreamers, academic scribblers, occasional quacks and madmen in authority.

The Making of Modern Economics does its best to entertain, with provocative sidebars, humorous anecdotes, even music selections reflecting the spirit of each major economist. Samples:

–Why Adam Smith burned his clothes…and then burned his papers.

–The “satanic verses” of the poet Karl Marx.

–Were Malthus, Ricardo, Marshall and Keynes anti-female?

–The infamous grading technique of Chicago’s Jacob Viner (he regularly flunked a third of his class).

–The sexual scandals of Karl Marx, Carl Menger, Joseph Schumpeter and Friedrich Hayek.

–The story behind Marx the phrenologist, Jevons the astrologer,

–Keynes the palm reader, and Friedman the amateur hand-writing analyst.

–Which famous economist is buried next to rock star Jim Morrison in Paris?

–How Darwin and Wallace discover their theory of evolution after reading Malthus.

–Why Malthus and the doomsdayers have been proven wrong about overpopulation and environmental crises.

–The strange case of David Ricardo: Why Schumpeter, Keynes, and Samuelson admired him–and deplored him.

–Why Malthus refused to have his portrait made until age 67.

–Why Hayek blames John Stuart Mill, a hero of classical liberalism, for popularizing socialism among intellectuals in the 19th century.

–The real origin of the epithet “dismal science,” and why critics are now calling economics the “imperial” science, with ever-increasing applications in law, finance, history, and politics.

–How John Stuart Mill and the disciples of David Ricardo became hostage to the Marxists, and how Carl Menger and the Austrians revived the laissez faire model of Adam Smith from oblivion.

–The inside story of three multi-millionaire economists–David Ricardo, Irving Fisher and John Maynard Keynes.

–The bizarre story of Jeremy Bentham: from democratic reformist to utilitarian fascist.

–The socialist origins of the American Economic Association and the London School of Economics.

–Veblen’s incredible prophecies about World War I and II.

–Thorstein Veblen versus Max Weber: Who had a better vision of capitalism?

–How Irving Fisher became an advisor to the fascist Mussolini.

–The little-known story of how the economics establishment in the West (including economists at Cambridge, Harvard and Yale) failed to forecast the 1929-32 economic collapse.

–How Austrian economists Ludwig von Mises and Friedrich Hayek were able to predict the 1929-33 crisis, yet failed to convince the world of their theories.

–How the 1929 crash served as a catalyst for Keynes’s “general theory.”

–How Keynes saved the world from Marxism in the 1930s.

–The truth about Keynes’s homosexuality and the rumor that his Cambridge colleague, A. C. Pigou, was a Soviet spy.

–Gross Domestic Product (GDP)–how a Keynesian statistic was invented by a Russian.

–How Irving Fisher’s misinterpretation of his quantity theory of money led to his losing a fortune on Wall Street, and how Milton Friedman avoided repeating Fisher’s blunder.

–Why Friedman and the Chicago school triumphed over Mises and the Austrian school in discrediting Keynesianism and restoring the Adam Smith model of market capitalism.

Fully Illustrated with Over 100 Photos, Portraits and Graphs

Finally, The Making of Modern Economics is the first fully-illustrated history of economics, with over 100 charts, portraits, and photographs, including a picture of….

…Keynes in bed (where he made his millions),

…Eugen Boehm-Bawerk in official regalia as finance minister of Austria,

…Alfred Marshall trying to hide his oversized left hand,

…the preserved body of Jeremy Benthem in London,

…the only known photograph of Irving Fisher smiling (before he lost millions in the stock market), and

…over 75 rare and unusual photos and portraits of famous economists.

Provocative Chapter Titles

Here are the titles of each chapter of The Making of Modern Economics:

It All Started with Adam (Adam Smith, that is)

  1. The French Revolution: Laissez Faire Avance!
  2. The Irreverent Malthus Challenges the New Model of Prosperity
  3. Tricky Ricardo Takes Economics Down a Dangerous Road
  4. Milling Around: John Stuart Mill and the Socialists Search for Utopia
  5. Marx Madness Plunges Economics into a New Dark Age
  6. Out of the Blue Danube: Menger and the Austrians Reverse the Tide
  7. Marshalling the Troops: Scientific Economics Comes of Age
  8. Go West, Young Man: Americans Solve the Distribution Problem in Economics
  9. The Conspicuous Veblen Versus the Protesting Weber: Two Critics Debate the Meaning of Capitalism
  10. The Fisher King Tries to Catch the Missing Link in Macroeconomics
  11. The Missing Mises: Mises (and Wicksell) Make a Major Breakthrough
  12. The Keynes Mutiny: Capitalism Faces its Greatest Challenge
  13. Paul Raises the Keynesian Cross: Samuelson and Modern Economics
  14. Milton’s Paradise: Friedman Leads a Monetary Counterrevolution
  15. The Creative Destruction of Socialism: The Dark Vision of Joseph Schumpeter
  16. Dr. Smith Goes to Washington: Free-Market Economies Face New Challenges

What Others Are Saying

“A story rarely told….It’s unputdownable!”
– Mark Blaug (University of Amsterdam), author of Economic Theory in Retrospect

“I champion Skousen’s book to everyone. I keep it by my bedside and refer to it often. An absolutely ideal gift for college students.”
– William F. Buckley, Jr., founder, National Review

“One of the most original books ever published in economics.”
– Richard Swedberg (University of Stockholm), author of Schumpeter: A Biography

“Provocative, engaging, anything but dismal!”
– N. Gregory Mankiw (Harvard University)

“Lively and accurate, a sure bestseller. Skousen is an able, imaginative and energetic economist.”
– Milton Friedman

“Mark Skousen has emerged as one of the clearest writers on all matters economic today, the next Milton Friedman.”
– Michael Shermer, Scientific American

“Irreverent, passionate, entertaining, sometimes mischievous, like the author himself!”
–David Colander (Middlebury College), coauthor of The Making of an Economist

“I have read Mark’s book three times. It’s fun to read on every page. I have recommended it to dozens of my friends.”
John Mackey, CEO, Whole Foods Market

“I loved the book–spectacular!”
Arthur B. Laffer

“I couldn’t put it down! The musical accompaniments for each chapter are a wonderful touch. Humor permeates the book and makes it accessible like no other history. It will set the standard.”
Steven Kates, RMIT University, Australia

“Skousen gets the story ‘right’ and does it in an entertaining fashion, without dogmatic rantings.”
Peter Boettke, George Mason University

“Both fascinating and infuriating…engaging, readable, colorful.”
Foreign Affairs

“Lively….amazing….good quotations!”
Journal of Economic Perspectives

About the Author

Mark Skousen (Ph. D., economics, George Washington University) is a Presidential Fellow at Chapman University in California.  He has taught economics, finance and business at Columbia Business School, Barnard, Mercy and Rollins colleges, and Chapman University.  Since 1980, Skousen has been editor in chief of Forecasts & Strategies, a popular award-winning investment newsletter (  He was analyst for the CIA, a columnist to Forbes magazine, chairman of Investment U, and past president of the Foundation for Economic Education (FEE) in New York.  He is the editor of his own website,, and is the producer of FreedomFest, “the world’s largest gathering of free minds,” which meets every July in Las Vegas (  His economics works include The Structure of Production (NYU Press), The Big Three in Economics (ME Sharpe), The Making of Modern Economics (Routledge) and Economic Logic (Capital Press).  His investment books include Investing in One Lesson (Capital Press), and The Maxims of Wall Street (Eagle Publishing).  In honor of his work in economics, finance and management, Grantham University renamed its business school, “The Mark Skousen School of Business.”  Based on his work The Structure of Production (NYU Press, 1990), the federal government now publishes Gross Output (GO) every quarter along with GDP.

A Tribute to Richard Russell


Mark Skousen (left) and John Mauldin (right) present Richard Russell with a copy of “Fifty Years of Wall Street”

Richard Russell (1924-2015), legendary publisher of the Dow Theory Letters since 1958, passed away on Saturday, November 21 at the age of 91.  Due to heart disease, he stopped speaking at investment conferences, but continued to write his daily commentary into his nineties.  My friend Van Simmons and I visited him and his wife Faye at his home and gardens in La Jolla.  When Mohammed can’t come down from the mountain, you have to go up to the mountain.

In 2009, I arranged with John Maudin to put together a special “Fifty Years of Wall Street” book of his writings for his 50th anniversary celebration of his “Dow Theory Letters.”  The book also contained tributes from dozens of friends and fans over the years (see below).  It was the last time I saw him. His insights will be missed.  He was truly one of the founders of the newsletter business and one of the original gold bugs.  We will dedicate a room to him at next year’s FreedomFest.

He was famous for his technical system of the Dow theory that determined whether the stock market was in a bull market or a bear market, and his newsletter always had a box in each issue with either a bull or a bear in the box (his last issue had a “bear” in the box).  His most famous quote, “In a bear market, the winner is he who loses the least,” is one of my favorites and can be found in “The Maxims of Wall Street” (page 100).

Tributes to Richard Russell (2009)

Richard:  You are my hero. I stand amazed at your ability to see through the fog of the markets so clearly for over 50 years, to maintain a calm and steady demeanor in the times of turbulence and to hold the hands of your legions of followers. You are a comforting presence in times of stress and a true friend to all of us who consume your wisdom. Thank you for all you have meant to so many over the years. And I hope one day to match your record of writing in what will soon be seven different decades. And I look forward to reading you and remaining your friend as you start your eighth in another ten years! Truly, life and health to you and Faye. — John Mauldin

Hail, fellow schoolmate!  I have read and admired your work over more years than probably either of us can remember.  You are original, serious, fun, illuminating, fascinating, stubborn, realistic, pioneering, and honest.  That is only a partial list, but you will want to time left to read greetings from other admirers.  Long may you wave, because we all need you. — Peter Bernstein

I cannot get enough of Richard Russell. I began reading him as an intern after my sophomore year of college and became hooked. I would sit at my computer watching the clock until his letter was posted. His letter is unique as well as personal. Thank you for everything you do and keep it up. –Steven Aldridge

Thank you, Richard, for all of your hard work. Please keep writing as long as you wish. In the meantime, keep training your son to fill in some day in the very distant future. Again — thank you Richard! –J Harrison Beal

As a long-time subscriber, I have been fortunate enough to learn from your thoughts not only about the market, but life in general. I especially appreciate the picture you sent me standing in front of a model B25 plane. My wife also reads your letter and we wish you well. – Myron Berkson

Every time I contemplate a move in the market, I pause first to listen in my head to Richard’s warnings, advice and wisdom. I have never regretted decisions based on his influence. I have enjoyed just as much, his comments and anecdotes on non-financial matters, from politics to stories of the war. I am nearly as old as he is and I remain in awe of the effort I know it takes to talk to us every day. – Dr. Virginia Biddle

Dick, I remember visiting you in your apartment on Lexington Avenue in 1958 after your article in Barron’s. We had a nice chat and I was very impressed. I have been a reader of Dow Theory Letters ever since and it has greatly influenced my investment career and results. Thank you very much. -Gene Brody

What a legacy! You have literally saved people financially as well as brought wisdom and cheer to their lives. You are terrific! – David Cantwell

We have never met, but I’ve been an admirer and, to some extent, imitator for many years.  Before I begin writing, every morning, I read you to get the perspective of the “old timers” — people who really know what they are talking about.  After all these years, I still don’t really understand Dow Theory.  As you say, the market can do what it wants.  Even after you ‘put the bear in the box’ stocks can still go up!  To me, Richard Russell’s Dow Theory may not always work in theory, but works in practice.  Your long experience at trying to read the “language of the market,” has made you as fluent as anyone still alive.  I rely on you to translate for me…to help me understand what is going on.  I just hope you keep at it at least until I retire.  — Bill Bonner

When I was 10 years old, my Dad insisted that I start reading Dow Theory Letters. The year was 1970.  I didn’t understand a word of it except for the stories in the Notes and Quotes section that kept me reading. I owe Richard an immeasurable debt for the knowledge he has giving about life and the markets. Thank you from me, my family and all of the people we passed your letter to over the years.  Took a position in Gold in 2000 and am still riding the bull.  Wha Hoooo! – David Carpenter

I first subscribed to Dick’s letter in the 70’s, and even today I can remember his observations. More than observations– genuine wisdom. I’ve never seen him miss a major turn of the market. Dick, I truly have the utmost professional, and personal, respect for you, and what you’ve accomplished. – Doug Casey

Loyal reader for more than 20 years. Richard, you have kept me out of serious trouble in the market over the years. And tipped me early to salting away some gold. I could never thank you enough. – Eric Ether

Richard, YOU sparked my financial life and got me thinking about how the world REALLY turns.  I first discovered and subscribed to your letter in 1972, sold my house and bought gold and silver with the proceeds. Your advice strongly influenced my decision to buy silver at $1.72 per ounce and gold at $58.17 an ounce. You might remember that by 1974 you couldn’t give a house away in San Diego, wage and price controls, and 18 ½ percent interest rates.  Did you know what you were talking about back then? You bet you did!  And, Richard, you still have what it takes!  Congratulations for your unequaled perspicacity and longevity in this difficult business. May you continue to receive all that you rightfully deserve. –Robert Cederhal

I was passed to Russell’s Letter by Martin Zweig when he quit. Best thing he did for me! – Ralph Condit

My husband, who died of melanoma in 1979, introduced me to Dow Theory Letters in 1970.  I have been reading them since 1973. Richard Russell is like family to me. I reveled in each revelation of his life and character as he kept my financial mind stable and stimulated. I have not always done what he advised, but always took his advice under consideration. I love him. –Frederika Cornell

Thank you for the privilege to meet you in person, after having spent countless hours in the company of your thoughts. Thank you for making me aware of the wave and the idea as opposed to being knocked about by the ever-unpredictable gusts of air in the market. Thank you for the peace of mind that goes with contemplating value, rather than the anxiety of watching prices. Thank you for sharing wisdom rather than pushing a sales line. Thank you for the privilege to log on every evening at 11 pmin my home in Holland for a moment of refection and learning. Good Health and Good Luck. -Ton Coumans, Amsterdam, theNetherlands

The integrity, the experience, and the wisdom always shines through. - Adrian Day

Best interpreter of the Dow Theory who ever lived. Thanks for the money you have made for me including your 12/74 call of the end of the bear market. – Kenneth Dorking

First, I will be forever grateful to Julian Synder who quit publishing “International Moneyline” and got Richard Russell to take on his old subscribers! Richard Russell has saved my financial life, but more importantly than money, Richard has shared his personal life with me. What a wonderful, creative, and beautiful chronicle of this man’s experiences during his extraordinary lifetime. – George Finley

About eight years ago on a vacation in Italy, we came across an interesting looking cactus. I remembered Richard’s interest in cacti and so took a photograph and e-mailed it to him. He recognized the type of cactus right away and responded with the name of the type. I am a recently retired portfolio manager here in Canada and Richard’s “top-out parade” in 1999 or 2000 alerted me to the impending market correction and saved my clients a great deal of money. – Deborah Frosst-McInnes

Across the electronic divide there are mental bridges that connect us all. Your words have often facilitated that bridging. I have sometimes disagreed with you, but have always enjoyed your words and they have always been great value. You are significant mortar in this vast collection of human bricks. A mere thanks is not enough… – Douglas Graham

I have learned more from Richard Russell, than I did from the combined group of teachers I had in school. Since 1991, I have rarely missed a word he has written. Of course it has influenced my own thinking and writing. I am eternally grateful for the knowledge and pure entertainment of his work! It has been a true blessing in my life! – Craig Griffin

My grandfather, a WWII veteran, was an original subscriber in the 60’s until he passed away in 2003. My father has been a longtime subscriber and I started reading the Dow Theory Letters over his shoulder when I was working for him after college. I now have 3 kids and have been a subscriber for 10 years. My husband and I are probably the only ones in our circle of friends who read daily about the markets and most certainly the only ones who have owned physical gold since it was in the 200’s. Thank you Mr. Russell! - Nancy Grimes

Cactus Stamps, and his great call on the start of the stock bull market in 1974, and his other on the great gold bull market in 2001. -Robert Hall

Richard has been very influential in my life. He pointed out to me the critical link between sound money and liberty. There’s far more at stake here than just our bank accounts. - Michael Huebner

I am just one of his legions of fans. –Terry Hughes

Richard is the father I never had.  The shining light in a dark night.  May his work live on forever. – Edward Hummel

A subscriber since 1958.  Thanks for making several million dollars over a span of 51 years. We Love You. –Gordon Jenkins

I have followed Richard for 30 years. His consistency, perception, intuition, humor and humanity have been a daily privilege to experience. – Tyler Jenks

I’m 54 years old and have been reading Richard for about 10 years now. Richard has become my mentor and my adopted financial father figure – since my own dad (also a WWII vet and B17 tail gunner) did not teach me about markets and finance. Richard has also passed down some valuable life-lessons that I’ve tried to incorporate into my own life. I love his personal writing style and you really get the feeling he cares about his subscribers. Thanks Richard! - Chris Kokinakes

Have been a subscriber since 1980 to the Dow Theory Letters (except for one 6 month break in the late 80s). My dad was flight engineer/top gunner on B-25 Mitchel in WW2 and so I shared the war stories/comments with my dad (who told me to correct Mr. Russell that the B-25 engines were “Wright Radials” not “Pratt & Witneys”). Prior to receiving the daily DTL by email, I treasured each biweekly hard copy of the DTL and when it came in the mail I would carefully put it in my back pants pocket and save it to read in the most serene or exotic locale I was going to be at in the next couple days. I\’ve read the DTL from the bottom of the Grand Canyon to the top of the Swiss Alps, on planes, trains, helicopters and even a submarine! - Richard Lane

Read Richards letter every day he posts it. Bless his heart, may he live to be as old as he wishes. – James Langell

We’ve never met, but he’s almost a friend, after reading him for so many years. Not many could achieve this with subscribers.-Frederick Lehmann

You have been an inspiration and financial mentor for whom my family and I will be forever grateful. – Terrance Macho

Mr. Russell’s newsletter has made fortunes for me and my company, and his writing has always entertained and informed.  – Steve Mathews

When I started Deliberations in 1972, Richard often used my charts and quoted my work to help “put me on the map” as he did unselfishly for many new letters. I’m also a happy user of EDTA Chelation with great success in part due to his ongoing promotion of it. Haven’t seen him in many years, and relish this opportunity to say thank you to a great guy. – Ian McAvity

Was introduced to the remarkable market analysis of Richard Russell many years ago by Kennedy Gammage and his Richland Report. –Sherman McClellan

How I appreciate all the passion, wit, and brilliance of this wonderful man. –Ruth Neuman

For quite a few years now I’ve had the pleasure of reading your pieces, first bimonthly and then daily, and absorbing the wisdom contained in your writings. You have enriched my life beyond measure, and for reasons beyond financial enrichment, as valuable as your advice has been in that regard. For all of this I thank you so much! Warmest regards from a loyal and devoted reader. -David Nicoli

Richard’s unique perspective on the markets is greatly appreciated, but what makes him stand out head and shoulders above the crowd is his integrity and ability to be frank and forthright. –Leonard Oppenheim

I encountered Richard’s writings a few years ago and pretty much immediately signed up to subscribe. Not only does his writing combine experience with perspicacity, his work exudes a humanity that is humbling and inspiring. We are lucky indeed to have his voice at this as we confront the vicissitudes of fortune. Thank you for your great service. – Xavier Porterfield

He teaches difficult concepts with enviable lucidity — a great teacher. -Mike Roizen

He taught me the meaning of the word greenspan – Jeffrey Schwartz

I have enjoyed reading Dow Theory Letters since my early days as a young private banker in La Jolla. I was introduced to the letters by a client and, from them, fairly quickly came to realize that the housing market then was overbought. We sold our first home in 1990, after thirteen months of working nights and weekends on that house and after many tears from Mrs. Shinsky when the prospect of selling was raised. She fairly quickly concurred after viewing the supporting evidence (…what a blessing she is!). Because of that decision, we were able to remain on the sidelines until the market settled. We weathered a very difficult environment and remained flexible to other opportunities that have served our family well. We are forever grateful for the “pearls of wisdom” harvested from Mr. Russell’s letters. We pray for him to receive joy from the knowledge that his writings have given so much peace, and relief from anxiety, to those who have read them and acted upon them. – Stephen Shinsky

We first began reading the Dow Theory Letters in 1975.  So when we met Richard Russell at a conference in the Bahamas in 1978, when he was a speaker and we were attendees, we were honored to talk to the exceptional market writer we admired so much.  Over the last 30 years we’ve been proud to be his friend, and we will forever be grateful for his ongoing support.  Richard has always been our favorite writer and to this day we look forward to reading his daily thoughts.  We love Richard and wish him the best in health, wealth, happiness…well, in everything life has to offer for many years to come –MaryAnne and Pamela Aden

I have been reading Richard for around 2 years. He is as good as they get and has truly helped me protect myself and my Mother and Father. Dad is 82 and Mom is 72. Due to Richard, I was able to convince them to sell completely out of the stock market in April 08 and put them in cash and gold. I cannot imagine where I would be or worse yet, where they would be had we not made that move for them. They were heavy in Blue Chips and Berkshire. THANK YOU FOR ALL YOUR INSIGHT. I wait to ready your Latest Remark every day. - Christopher Snell

You always keep me looking at the big picture. I started out reading your analysis six years ago after I graduated from college.  Your confidence in yourself is contagious.  I become more confident in my trading with every letter you write. You’ve taught me to rely on myself and no one else; especially the government!  Thank you. -Dean Somes

I’ve been reading Richard’s The Dow Theory Letters for almost five years. Each day I eagerly look forward to reading Russell’s Remarks to better understand what the “language of the markets” is saying; his daily remarks provide me with much emotional and investing support in navigating through the troubled waters of investing, particularly today. I’ve enjoyed his many anecdotes about his WWII military service, his family, his views on politics and economics and what he has learned about life. I get a big kick about the way he deals with irate readers who don’t agree with his views on politics and religion. Richard, thanks for your service, your humor, your informative and entertaining writing, and your wisdom. May you live to be over 100, as I know you want to know how things will work out! -Ralph Spencer, Jr

I want to take this opportunity to thank you again for encouragement and support in helping me establish and grow my own business. Many of our current subscribers first heard about Decision Point from Richard Russell. My sincerest gratitude and best wishes. -Carl Swenlin

An “ALL-TIME CLASSIC” guy. Have read, enjoyed and profited from his investment advice for almost 40 years as a Smith Barney broker. –John Tevenan

My thanks to Richard for the endorsement that appears on the back cover of my book. -Albert Thomas

Long-time reader.  So long ago that I don’t know if his thoughts are mine or my thoughts are his. -Jon Vanderwood

12 years constant reading. –Tryon Williams

Richard, thanks to you and the Dow Theory Letters, our family is financially secure today. We listened and bought gold and silver too. There is no way we can ever repay you for what you have given us. Long life to you, Richard Russell! –Christine Wood

I worked for Richard’s CPA in 1978, and have been following him ever since. I have benefited from his advice, and enjoyed his non-financial comments as well. I am looking forward to seeing him again — the last time was when I visited him in the hospital after his heart surgery, many years ago! –Charlie La Nasa

Was not a regular reader of Richard’s, but am fully aware of his contribution to the investment community as well as San Diego. –Matthew Pavich

I remember your awesome call at the end of 1974 when everyone was scared to death…you called the bottom of the greatest stock market bear in history. People forget that the average stock on the NYSE was down 85%…this was masked by the Dow and S&P. There was blood in the streets. A few weeks before that Doug Casey and I both joke about how we sold out at the exact bottom since we were so new to the game.  You have been a great force for good in a world with plenty of wrongs. You are credit to your profession and you make us all very proud. — Ken Gerbino

There are few people on this earth from who I have learned as much as I have from Richard over the years – I should say over the decades. A friend brought his newsletter to my attention in October 1974. I still remember it well because Richard was calling a bottom in the stock market, which seemed outlandish at the time. But in fact time proved that it was a brilliant call, and just one of many made by Richard. I know of no one who has been as consistently right about the market as Richard. Please wish him well for me.  – James Turk

We enjoy your daily comments and wish you all the best.  My father served in the army in the pacific during WWII and I served 23 years in the Navy as a pilot.  Your stories of duty in the European area are excellent insights to the vast majority of younger individuals who know nothing of the sacrifices you and my dad made for this country.  Thank you for all you do and keep on working as long as you enjoy it.  –Angelo and Duke Brunelli

What an amazing record of accurate calls and solid advice Richard Russell has compiled for the past 50 years.  He has been an inspiration to every newsletter writer and publisher I know.  I’m delighted to join the legion of happy subscribers who are honoring him tonight. — W.W. “Chip” Wood

Richard Russell has the great distinction of being a legend in his own time for over 50 years.  He has provided consistently sage advice for his many loyal clients, avoiding the fads and the hype of the day and concentrating on helping his clients with the difficult task of building wealth slowly and surely over time.  Always level-headed, Richard imparts worldly wisdom and humanity to his readers in addition to his always thoughtful, disciplined and provocative investment advice. — Tony Boeckh, President, Boeckh Investments & Former Owner & Editor-in-Chief of The Bank Credit Analyst.

Richard, I started reading your reports I was a teenager over 35 years ago. I have much respect for what you’ve done for me as a young person learning the market in the 60’s when technical chart reading was considered at best voodoo. You have always been most gracious with your time whenever I phoned to get your perspective on market trends or chart reading. You have been an inspiration for many of my companies and helped me launch the Gold Report by providing me your insights into the markets and life. Your generosity was one of many influences for me to dedicate all profits from my winery Lookout Ridge to buying wheelchairs for needy individuals with mobility challenges world wide. — Gordon L Holmes  

Announcing the New Third Edition of “The Structure of Production”

Federal Government Introduces a New Macro Statistic: A Triumph in Supply-side “Austrian” Economics and Say’s Law

Mark Skousen, The Structure of Production. New York University Press. Third revised edition, 2015, 402 pages. $26 paperback. Available on Kindle.

To buy the book: NYU, Amazon
Quarterly data for Gross Output can be found at the BEA site here.
For Skousen’s latest quarterly report on GO, see this.

From the cover:

SoP3coverweb2In 2014, the U. S. government adopted a new quarterly statistic called gross output (GO), the most significance advance in national income accounting since gross domestic product (GDP) was developed in the 1940s. The announcement comes as a triumph for Mark Skousen, who advocated GO twenty-five years ago as an essential macroeconomic tool and a better way to measure the economy and the business cycle. Now it has become an official statistic issued quarterly by the Bureau of Economic Analysis at the U. S. Department of Commerce.

Quarterly data for Gross Output can be found at the BEA site here.

For Skousen’s latest quarterly report on GO, see this.

Since the announcement, Gross Output has been the subject of editorials in the Wall Street Journal, Barron’s, and other financial publications, analyzed in the Eastern Economic Journal, and is now being included in leading economics textbooks, such as Roger Leroy Miller’s new 18th edition of Economics Today. Economists are now producing GO data for other countries, including the UK and Argentina.

In this third printing of Structure of Production, Skousen shows why GO is a more accurate and comprehensive measure of the economy because it includes business-to-business (B2B) transactions that move the supply chain along to final use. (GDP measures the value of finished goods and services only, and omits most B2B activity.) GO is an attempt to measure spending at all stages of production.

As Dale Jorgenson, Steve Landefeld, and William Nordhaus conclude in “A New Architecture for the U. S. National Accounts,” “Gross output [GO] is the natural measure of the production sector, while net output [GDP] is appropriate as a measure of welfare. Both are required in a complete system of accounts.”

Skousen states, “Gross Output fills in a big piece of the macroeconomic puzzle. It establishes the proper balance between production and consumption, between the ‘make’ and the ‘use’ economy, between aggregate supply and aggregate demand. I make the case that GO and GDP complement each other as macroeconomic tools and that both should play a vital role in national accounting statistics, much like top line and bottom line accounting are employed to providing a complete picture of quarterly earnings reports of publicly-traded companies.”

He concludes, “Because GO attempts to measure all stages of production (known as Hayek’s triangle), it is a monumental triumph in supply-side ‘Austrian’ economics and Say’s law.”

Using GO, Skousen demonstrates that consumer spending does not account for two-thirds of the economy, as is often reported in the financial media, but is really only 30-40% of total economic activity. Business spending (B2B) is over 50% of the economy, and thus is far larger and more important than consumer spending, more consistent with economic growth theory, and a better measure of the business cycle. (See chart below.)


About the Author

MARK SKOUSEN is a Presidential Fellow at Chapman University in California. He has taught economics and finance at Columbia Business School, and is a former economic analyst for the Central Intelligence Agency. He received his Ph. D. in economics at George Washington University (1977). He is the editor-in-chief of the investment newsletter Forecasts & Strategies, and author of several books, including The Making of Modern Economics.


“Now, it’s official. With Gross Output (GO), the U.S. government will provide official data on the supply side of the economy and its structure. How did this counter revolution come about? There have been many counter revolutionaries, but one stands out: Mark Skousen of Chapman University. Skousen’s book The Structure of Production, which was first published in 1990, backed his advocacy with heavy artillery. Indeed, it is Skousen who is, in part, responsible for the government’s move to provide a clearer, more comprehensive picture of the economy, with GO.” — Steve H. Hanke, Johns Hopkins University (2014)

“The development of Gross Output is a good idea and a better measure [of economic activity] than GDP.” — David Colander, Eastern Economic Journal (2014)

“This is a great leap forward in national accounting. Gross Output, long advocated by Mark Skousen, will have a profound and manifestly positive impact on economic policy.” –Steve Forbes, Forbes magazine (2014)

“Skousen’s Structure of Production should be a required text at our leading universities.” (referring to second edition) –John O. Whitney, Emeritus Professor in Management Practice, Columbia University

“Monumental. I’ve read it twice!” (referring to first edition, published in 1990) — Peter F. Drucker, Clermont Graduate University

“I am enormously impressed with the care and integrity which Skousen has accomplished his work.” — Israel Kirzner, New York University

For Interviews or Lectures

To interview Dr. Mark Skousen or arrange a lecture, contact him at, or Valerie Durham, Media Relations, 410-570-0535, or email her at

# # #

U. S. Economic Activity Advances 5.2% in 3rd Quarter 2014

Washington, DC (Thursday, January 22, 2015):  Gross Output, a broader measure of U. S. economic activity published by the Bureau of Economic Analysis, advanced to nearly $31.3 trillion in the third quarter of 2014, a 5.2% jump in real terms (annualized).  The GO data released by the BEA can be found at

Gross Output (GO) is a measure of sales or receipts of all industries throughout the production process, including business to business transactions.

As has been the case throughout 2014, GO advanced faster than GDP.  Gross Domestic Product (GDP), which measures the value of final goods and services only, rose 5.0% in real terms to $17.6 trillion in the third quarter.

“The GO data demonstrates that the economy is still accelerating,” stated Mark Skousen, editor of Forecasts & Strategies and a Presidential Fellow at Chapman University.  Skousen champions Gross Output as a more comprehensive measure of economic activity.  “GDP leaves out a big part of the economy, business to business transactions in the production of intermediate inputs,” he notes. “GO includes most B to B activity that is vital to the production process.”

Skousen first introduced Gross Output as a macroeconomic tool in his work The Structure of Production (New York University Press, 1990, new third edition forthcoming in 2015).  Now the BEA publishes GO on a quarterly basis in its “GDP by Industry” data, the first aggregate statistic to be published on a quarterly basis since GDP was introduced in the 1940s.

“Gross Output and GDP are complementary aspects of the economy, but GO does a better job of measuring total economic activity and demonstrates that business spending is more significant than consumer spending,” he says.  “By using GO data, we see that consumer spending is actually less than 40% of economic activity, not the 70% figure that is reported by the media.”

According to the Skousen B-to-B Index, total business spending throughout the supply chain reached $23.0 trillion in the 3rd quarter 2014, compared to personal consumption expenditures of $12 trillion.  “Thus, we see that business spending is almost twice the size of consumer spending in the US economy,” concludes Skousen.

Skousen also notes that during downturns GO tends to fall faster than GDP, while during expansions GO rises faster than GDP.

Note:  Ned Piplovic assisted in providing technical data for this release.

For More Information

For more information on Gross Output (GO), B to B activity, and their relationship to GDP, see the following:

Mark Skousen, “At Last, a Better Way to Economic Measure” lead editorial, Wall Street Journal, April 23, 2014:

Steve Forbes, Forbes Magazine (April 14, 2014): “New, Revolutionary Way To Measure The Economy Is Coming — Believe Me, This Is A Big Deal”:

Mark Skousen, Forbes Magazine (December 16, 2013):  “Beyond GDP: Get Ready For A New Way To Measure The Economy”:


To interview Dr. Mark Skousen on this press release, contact Valerie Durham, Media Relations,

# # #

US Economic Activity Jumps Sharply in Q2

For Immediate Release
Contact: Valerie Durham,


Washington, DC (Friday, November 14, 2014):  Gross Output, a broader measure of U. S. economic activity published by the Bureau of Economic Analysis, advanced to nearly $30.9 trillion in the second quarter of 2014, a 4.8% jump in real terms (annualized).  The GO data released by the BEA can be found at

Gross Output (GO) is a measure of sales or receipts of all industries throughout the production process, including business to business transactions. 

GO advanced slightly faster than GDP.  Gross Domestic Product (GDP), which measures the value of final goods and services only, rose 4.6% in real terms to $17,328.2 billion in the second quarter. 

“The GO data demonstrates that the economy recovered sharply from the slowdown in the first quarter,” stated Mark Skousen, editor of Forecasts & Strategies, who champions Gross Output as a more comprehensive measure of economic activity.   He first introduced Gross Output as a macroeconomic tool in his work The Structure of Production (New York University Press, 1990).  Now the BEA publishes GO on a quarterly basis in its “GDP by Industry” data.  [Read more…]

Derek Jeter’s Big Finale…and I Was There!

Last Thursday, at the invitation of Steve Forbes, I was able to attend Derek Jeter’s last game at Yankee stadium. Mr. Forbes has season tickets and occasionally invites me to join him. Tickets were selling for $850 and more, and those were bleacher seats, so I felt lucky. The Yankees were ahead 5-2 in the 9th inning when I told Mr. Forbes that I expected the Orioles to score three runs and tie the score, forcing Jeter to bat one more time to win it all in his final time at bat at Yankee Stadium. My prediction came true. Mr. Forbes can verify it. What a night!

I can relate to Derek Jeter. He never won the Most Valuable Player award, but he was a steady, reliable performer during his 20 years with the Yankees and ended up getting five World Series rings. By the same token, I consider my 35 years writing Forecasts & Strategies as a steady performer, never personally ranking #1 in any one year. But over the long run, I delivered a winning formula for financial success.

Mark Skousen and Steve Forbes enjoy Derek Jeter’s final home game at Yankees Stadium.

Missing Link in Economics Revealed!

by Mark Skousen
Presidential Fellow, Chapman University

For centuries economists have been searching for the missing link that would tie microeconomics (theory of the firm and individual behavior) with macroeconomics (theory of the economy as a whole).

I believe my four-stage model of the economy does just that.  Based on Austrian macroeconomics (known as Hayek’s triangles), I created a four-stage model of the macro economy in my book, The Structure of Production (NYU Press, 1990).  A few years later, John Taylor of Stanford University (famous for his Taylor Rule) independently produced a 4-stage micro model involving four stages in the production of Caribou Coffee.

A eureka moment!

I’ve incorporated both 4-stage micro and macro models in my textbook, Economic Logic (Capital Press, 2014), now in its 4th edition.  See especially chapter 14:  < It’s available in book print and Kindle.  If you want to buy it at a discount for only $34.95 plus S&H, call Eagle Publishing at 1-800-211-7661, and use code ECONL6.


Figure 1.  Universal 4-stage Macro Model of the Economy

Source:  Mark Skousen, The Structure of Production (New York University Press, 1990); Economic Logic (Capital Press, 2014).






Figure 2.  4-stage micro model (production process of Caribou Coffee) 

Source:  John B. Taylor, Economics, 5th edition (Boston:  Houghton Mifflin, 2006)

U.S. Economy Doing Better Than Expected


Washington, DC —  Gross Output, a broader measure of  U. S. economic activity published by the Bureau of Economic Analysis, held steady at $30,210.6 billion in the first quarter of 2014.

“The GO data demonstrates that the economy is not as bad off as GDP figures initially suggested,” stated Mark Skousen, editor of Forecasts & Strategies and a Presidential Fellow at Chapman University, who champions Gross Output as a more comprehensive measure of economic activity.   He introduced Gross Output as a macroeconomic tool in his work The Structure of Production (New York University Press, 1990).  Now the BEA publishes GO on a quarterly basis in its “GDP by Industry” data.

The GO data was released by the BEA on Friday, July 25, 2014: [Read more…]

Marx Madness is Back

“Capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine democratic societies.” — Thomas Piketty, “Capital in the 21st Century” (2014)

The Economist magazine rightly called French professor Thomas Piketty the new Marx, although a watered down Marx. His bestseller (rated #1 on Amazon and the New York Times) is a thick volume with the same title as KCapital in the Twenty-First Centuryarl Marx’s 1867 magnum opus, “Kapital.” The publisher, Harvard University Press, appropriately designed the book cover in red, the color of the socialist workers’ party.

Piketty cites Karl Marx more than any other economist, even more than Keynes. He barely mentions Adam Smith. Instead of the modern scientific name “economics,” he prefers the old term “political economy,” a favorite of radical professors. [Read more…]