My Breakthrough in Economics is Making Progress, but Still Faces Opposition

“Mark Skousen’s Structure of Production is my favorite book of his.” — Rick Rule

“Scientists do not normally aim to invent new theories, and they are often intolerant of those invented by others.” — Thomas S. Kuhn, The Structure of Scientific Revolutions (1962)

I hope you all have a most memorable Christmas holiday and look forward to a most prosperous New Year.

This year, 2024, has been a highly profitable one for us at Forecasts & Strategies. Let me tell you about one such event that occurred last month:

At the 50th anniversary of the New Orleans conference, I highlighted the new, 11th edition of “The Maxims of Wall Street.” I mentioned to Rick Rule, the world’s top expert on energy and mining, that he is quoted several times in my new edition. His response surprised me: “Actually, my favorite book of yours is ‘The Structure of Production,’ which offers the best way for investors to understand how the economy works through the stages of production and the supply chain.”

He added, “I recommend it to every one of my clients. Next to Henry Hazlitt’s ‘Economics in One Lesson,’ it’s the most useful book investors can read.”

Two weeks later, Rick interviewed me on his video podcast show to talk about “The Structure of Production,” and how to apply my “stages of production” approach to investing and analyzing the economy. “Structure” introduces gross output (GO), as the most comprehensive measure of the economy.

GO is the missing link in macroeconomics, because unlike GDP, it includes the all-important supply chain. It proves that business spending, capital investment and entrepreneurship are the key to economic growth and far more important than consumer spending. In sum, “The Structure of Production” is a paradigm shift in economics.

To watch the interview, go to Rick Rule Live with Dr. Mark Skousen. Scroll to the 3-minute period where the interview begins. I include several important graphs and diagrams to explain how the economy works. Following my slides, I answer questions from Rick and his assistant, Albert Lu.

“Structure” is an academic book that is now available in paperback and Kindle on Amazon for only $30: The Structure of Production: New Revised Edition: Skousen, Mark: 9781479848522: Amazon.com: Books.

For those who want a simpler explanation of GO, I suggest you read my essay, “Economics of Life Made Simple,” which was the cover story last year in Skeptic Magazine. You can read it here: Skeptic » Reading Room » The Economics of Life Made Simple.

A printed copy of the essay can be purchased for $3 each at www.skousenbooks.com (minimum order three copies).

I also have a website devoted entirely to the subject: www.grossoutput.com. It includes my latest quarterly press release on GO. The latest data shows that GO, like gross domestic product (GDP), continues to grow at a slow pace. We avoided a recession in 2024, but the economy is still struggling to fully recover from the 2020 pandemic.

Away We GO: The Thrill of Victory…

Since New York University Press published my “Structure” book in 1990, much good news has come my way. The biggest news is that starting in April 2014, the federal government (the Bureau of Economic Analysis at the Commerce Department) has started to publish GO as the “top line” in national income accounting every quarter along with GDP. The Wall Street Journal published my op-ed making the announcement with this cartoon, which captured the four-stage model of the economy:

My GO statistic has been endorsed by dozens of economists, including three Nobel prize winners. You can read their views at “Three Nobel Prize Winners Endorse New Macro Statistic” — Gross Output

More good news: My academic paper, “GO Beyond GDP,” which explains what GO is all about, has been ranked the #1 most downloaded paper by the Social Science Research Network (SSRN). To read it, here is the link: “GO BEYOND GDP: INTRODUCING GROSS OUTPUT, THE “TOP LINE” IN NATIONAL INCOME ACCOUNTING – The Schumpeter Lecture by Mark Skousen” :: SSRN

…and the Agony of Defeat

But there’s a lot of work to be done. Most economists and the financial media still don’t know much or anything about GO and the “Structure of Production.”

Part of the problem is the Bureau of Economic Analysis (BEA) itself. While its staff are supporters of GO, it buries GO inside its website www.bea.gov, fearing that the financial media won’t understand what GO is all about. So, they hide it under “GDP by Industry.”

While several economics textbooks have mentioned GO in their chapters on national income accounting, only one fully integrates it into their textbook: Mine! It’s called “Economic Logic,” now in its 6th edition. (available at www.skousenbooks.com).

The American Economic Association (AEA) and its journal editors have refused to publish my work on GO, waiting for the concept to be cited in other journals. It’s like a Catch-22 situation.

It reminds me of what the great German writer Johann Goethe said about the Copernicus discovery that the earth circles the sun, not the opposite:

“Of all discoveries, none may have exerted a greater effect on the human spirit than the doctrine of Copernicus. The world had scarcely become known as round when it was asked to waive the tremendous privilege of being the center of the universe…No wonder his contemporaries did not wish to let all this go and offered every possible resistance to a doctrine which in its converts authorized and demanded a freedom of view and greatness of thought so far unknown, indeed not even dreamed of.”

I know the feeling, witnessing firsthand “every possible resistance” to this new measure of total spending (aggregate supply & demand) — Gross Output (GO), which is GDP + the supply chain.

GO is a paradigm shift, so I expect opposition.

But as Winston Churchill said, “Never give in!” I continue to work hard to bring economics into the 21st century, with GO as the “top line” in national income accounting and GDP at the “bottom line.”

Good investing, AEIOU,

Upcoming Appearances

FreedomFest Holiday Special: Early Bird Discount Ends on January 31, 2025!

Take advantage of the holidays to make your plans to come to the greatest libertarian show on earth: FreedomFest, June 11-14, 2025, at the Palm Springs Convention Center in California. The beautiful Renaissance Resort Hotel is right next door.

Good news! We have just confirmed Larry Sanger, the co-founder of Wikipedia (he came up with the name), who will speak on “The Threat of Centralized Control of Social Media and What Can Be Done About It”…

I will also be debating John Tamny, publisher and editor of RealClearMarkets, on his dangerous new book “The Deficit Delusion.”

We are also happy to welcome back Marc Eliot, Hollywood’s biographer, who will talk about Hollywood’s love affair with Palm Springs as THE getaway for the jet-set; he will be leading a tour of the secluded homes of Frank Sinatra and other celebrities.

Plus, hundreds of speakers to be announced soon.

See you in Palm Springs in June!

Take advantage of our “early bird” discount, only $400 per person, by going to www.freedomfest.com, or call Hayley at 1-855-850-3733, ext. 201.

Being of One Faith:  My Friendship with Lee Edwards

“Know ye not that there is a prince and a great man fallen this day in Israel.” — 2nd Samuel 3:38

A few weeks before Christmas, my long-time friend Lee Edwards, age 92, passed away. Lee was a founding member of the Young Americans for Freedom (YAF), a strong defender of liberty, part of the anti-communist movement and founder of the Victims of Communism Memorial Foundation.

We plan to dedicate a room to Lee Edwards at next year’s FreedomFest.

Richard Viguerie, who knew Lee longer than I did, wrote, “We had so much in common– same age, both strong, conservative, anti-Communist, Catholics — consumed with saving Western Civilization.”

Lee Edwards, Mark Skousen and Richard Viguerie in Washington DC in 2014.

Lee was known as “the historian of the conservative movement,” having written biographies of Ronald Reagan, Barry Goldwater, Ed Feulner and was working on his 26th book, “The Unsung Heroes of the Conservative Movement.” The New York Times published his obituary: Lee Edwards, Historian of the Conservative Movement, Dies at 92 – The New York Times.

Even though Lee and I were members of different Christian churches, we always got along and had similar goals.  My uncle, W. Cleon Skousen, was the same way. Like me, he was an active Mormon that worked well together with Catholics and Evangelical Christians (including Jerry Falwell, Pat Robertson, James Dobson and Billy Graham). As Jesus preached, “He that is not against us is for us.”

Two weeks ago, I was interviewed on a video podcast, “My Faith,” which is the first time I’ve been interviewed about my religion… and the first time they have interviewed a Mormon. It’s 45 minutes long; watch at your leisure during the holidays. Watch it here:  Mark Skousen