your favorite economic books
 

for some reason, i enjoy reading economic books, even though it has nothing to do with my job. it started after i read Eat the Rich by p.j. o'roark. since then, i have read:


Naked Economics: Undressing the Dismal Science by Charles Wheelan - freakin loved it


New Ideas from Dead Economists: An Introduction to Modern Economic Thought by Todd G. Buchholz and Martin Feldstein -pretty damn good

Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics by Henry Hazlitt - not bad

The Undercover Economist by Tim Harford - not bad

the biggest lie ever believed by Michael Folkerth - this isn't as much an econ book as a book describing how we got in this mess.


do you have any favorite economics books?

Just finished Bailout Nation by Barry Ritholtz. Well written, easy to read, focused on our recent transition away from capitalism.

Absolute fave, a must read, is Black Swan by Nassim (sp?) Taleb. Completely changed my understanding of risk and the occurrence of improbable events. Found it very difficult at the beginning because the writer is such a pompous ass but it is worth dealing with his attitude to get at the core message of the book.

Karl Marx - Das Kapital

i don't have favorites per se. a couple books that have made an impression on me:

bennet & bluestone: the deindustrialization of america
michel aglietta: a theory of capitalist regulation
manuel castells: the rise of the network society
k. polanyi: the great transformation
marx: grundrisse, capital

Firstly, THE most important thing to learn about economics, from whichever source, is that it's NOT a natural science and there are NO laws or theories that hold so much water as, say, The Theory of Gravity.

The second is that economics was, up until relatively recently, purely about narratives and was called "political economy". There is still no separating politics from economics.

Every mathematical model ever constructed by any economist is set up based on the prejudices of that particular economist or school of thought.

Really, the thing has no business being called a science, as we currently understand it, in my opinion.

That said, both of Nassim Nicholas Taleb's books are great for commentary on the present system and a lot of it's insanity/divorce from real reality... You'll get a kick out of his style if you like PJ O'Rourke too.

If you want some more academic stuff, read through the Oxford "Introductions to..." across a few schools of thought and follow things up as you like.

One thing though, whenever they start to play with game theory... throw the book away.

Free To Choose - Milton Friedman
the Joy of Freedom - David Henderson
United We Stand - Ross Perot
Economic Facts and Fallacies - Thomas Sowell
The Millionaire Next Door - Thomas J. Stanley and William D. Danko
The Great Boom Ahead - Harry Dent
Rich Dad Poor Dad - Robert Kiyosaki
Valley of The Far Side - Gary Larson

Although Gary Larson is not an economist, politician, business leader or even a journalist (he is a cartoonist), his work is quite provocative and full of economic lessons that many so called intellectuals seemingly fail to understand. For example, this one, which is a clear commentary on the methods of collecting economic data and the impact it has on those who think they know what is best for others through economic policy and its use for social engineering:

http://www.antropologi.info/blog/med...opologists.jpg

A brilliant book that everyone should read.
Pretty good in principle, but its limitation is that it is only particularly useful to entrepreneurs specifically. At least the prior title can work in principle for anyone with an income.

There are so many books (and topics) and so little time. I haven't read many economics books, but one book I highly recommend to anyone who invests is The Intelligent Investor by Benjamin Graham. I would even go as far as saying don't even begin to think about picking stocks on your own without at least browsing this book first. This, especially considering there are still many people out there who don't know the difference between investing and speculation.

I think the key theme in "Rich Dad, Poor Dad" as it applies to a broader economic context is the focus on ownership or the value in focusing on the creation of real net worth (wealth). I think these lessons apply on a micro and on a macro basis. I find it ironic that our national economic policy is now more focused on spending and income generation as opposed to savings and the creation of real wealth. As some discuss the demise of capitalism in other threads, what actually made the US economy, or even the Canadian economy grow and provide better and better standards of living was savings and the creation of real wealth as opposed to what we are seeing now which is like an economic shell game, and it is this shell game that will lead to the demise our economy unless we change our focus.

{added} Also the book, perhaps unintended, is making a strong commentary on the failings of our education system.

I see that, but when you get into the specifics, it's basically saying you should start up profitable companies and buy income properties. What if I'm already a successful plumber or landscaper and all I would need to do is follow the steps outlined in Millionaire Next Door? Spend less than you earn, don't waste money on status objects, make sound investments, and make damn sure your kids learn about money is a different set of strategies. One doesn't need to follow the steps in Rich Dad to become wealthy, but if they don't follow the steps in Millionaire, it probably will never happen.

But I see your point about the overall impression Rich Dad makes. I agree that the current way we use money is out of whack. Here is one of my favourite indicators:

http://heyna.files.wordpress.com/200...vings_rate.gif

We don't know how to save money anymore. When you have presidents spouting about how spending is a virtue of the patriot, what is one to do? Well, the answer we both already know: educate yourself and make that decision on your own. (The recent spike in the savings rate I believe is merely a knee-jerk reaction to the recession and will not continue once things level out.)

It's amazing though, when you think about it. You can have someone who makes less than $100,000 a year become a millionaire, while there are many who make over that and are actually quite poor and will stay that way until it's too late.

We do indeed focus too much on income and not enough on the essentials of financial security.

And the lack (absence?) of financial education in our public education system is another topic on its own.

We are in general agreement.

When I objectively look at the material that I hold in high regard, it is normally work that reinforces what I already believe, with the exception of Free to Choose which actually changed my economic views. And given a relatively short attention span and a need to consume information in bite size chunks, I find books like "Rich Dad Poor Dad" right up my alley. Ironically, Kiyosaki, is politically very liberal while his book is a lesson on being fiscally conservative.

I was always reluctant to read Friedman, as I think I'd disagree with him too much. I don't hold as much esteem and faith in the free market as he does. I'm sure some aspects would be give and take. I should probably read him regardless.

I suppose the personal challenge to the intellectually curious is to read something they think they know they will disagree with. Am I up to the challenge? I will put Karl Marx's - "Das Kapital" on my reading list. I did read his "Communist Manifesto", I was already a capitalist through and through, I was unimpressed with his work and felt his arguments lacked logic in some cases. Perhaps, some things were lost in translation.

The problem with Das Kapital or the Communist Manifesto is that the context within which they were written has shifted. So reading them as a way to influence your thoughts on contemporary economics would seem an odd exercise to me. It would be like reading Wealth of Nations with the hope that it would help you sort out the current state of the economy.

Both Marx and Smith have no idea what's happened since the 20th century. Some of their ideas have been synthesized and implemented. Others have been discarded. Marx never really saw communism attempted on a large scale, and Smith was essentially a pre-capitalist.

But I suppose that reading all of these titles is an exercise of exploring fundamentals of how we have come to today.

I will give Free to Choose a spin. There's a single copy of the first edition available for circulation at the Toronto Public Library, and it isn't even checked out. I'll have it before the weekend.

if you want to read capital, maybe we could start a reading circle type thread and use it to push things along. i know the text pretty well and i suspect that there are other folk who do as well---who knows, maybe it'd be interesting.

That would be interesting. I haven't read that yet and would certainly do so with this as an incentive. (I have read the Manifesto.)

I understand the problem with reading aged material and applying the contents in a modern context. But I disagree regarding "The Wealth of Nations", I think there are some core principles in the work that is very applicable to current issues and that the book could still be influential.

Smith spoke about meritocracy, and the driving force it is on people wanting to better themselves. I think the greatest drivers of the industrial revolution was meritocracy. I think the US greatly benefited from immigration based on people wanting to be rewarded for their efforts and they choose the US for that very reason. The US obtained some of the most motivated people on the planet and Smith's book predicted that.

Smith also talked about the "invisible hand", or the observation that people act in their own best interest. If one did a search of my posts you will find I use that line frequently with the addition of "perceive", where I say that people will do what they perceive to be in their best interest. What is perceived is not always what is real.

---------- Post added at 09:32 PM ---------- Previous post was at 09:29 PM ----------

I would participate. One of my problems when I read work from people with whom I disagree, is not being able to ask questions to see if I am really understanding what they are saying.

it wouldn't need to be an adversarial thing. we could argue about stuff of course but the overall idea would be trying to figure out what's going on in the text.
if memory serves (and i'm feeling a little dicey about this after i blocked out the revolutionary program outline from ch. 2 of the manifesto and tried to claim it wasn't what it was in fact) vol 1 was completed by marx & 2 and 3 are fragmentary, edited/sequenced largely by engels. so vol. 1 is relatively smooth as a text--but alot of the conceptual moves lean on hegel so they can take a bit of unpacking to sort out.

friedman's more popular stuff is pretty annoying, but it was really influential in the construction of neoliberalism, so wading through is a bit of intellectual history kinda. from what i remember of his more academic stuff the basic schematas are the same but the data's better and the demonstrations more interesting. but i still think he's full of it in a basic way.

keynes might be interesting to read now.

My reading has picked up quite a bit recently, having ended a long-term binge on computer gaming, namely, the World of Warcraft. (With much relief, I must say.)

I've recently decided that I'd rather have read Smith's Wealth of Nations before delving into Capital, as I understand that Marx based his work in large part on Smith's ideas.

That said, I'm currently waiting for a copy of Wealth of Nations to be available from the library, and Capital is in the queue.

I should get the Smith text fairly quickly. Would you (or anyone else) be interested in starting a reading circle type thread on the Smith text as a precursor to one on the Marx text?

I should note too that the copy of Capital I'm obtaining is the abridged Oxford edition, which contains pretty much all of Volume 1, an excerpt of Volume 2, and select chapters of Volume 3. You can get a table of contents here through Amazon's Search Inside:
I hope that will suffice. If not, I suppose I could spring for my own copy of the unabridged text.

Baraka,

Most, if not all, of these texts are available online. Im not sure if reading online is something you'd do, but it's just something I thought I'd point out.

Regarding Das Kapital, while there are references to Smith there, the main political economist that influenced Marx is David Ricardo. "Principles of Political Economy and Taxation" played a much bigger role in Marx's writings on the economy than Wealth of the Nations.

EDIT: and for a conservative take on Marx, much better than the current nonsense spewed by pop libertarians, there is Capitalism, Socialism and Democracy, bu Schumpeter. Not perfect, but consistent and interesting.

Thanks, dippin. I am aware of the online availability of the texts, but I refuse to read at length online.

I'm also aware of Ricardo's influence, but didn't know the proportion. I also understand that Mill's Principles of Political Economy plays a role as well.

However, I've always intended on reading Wealth of Nations and figured it was a more natural starting point for this track. It seems to be the most popular work on this subject. Do you suggest reading Ricardo and Mill as well?

I loved this: Freakonomics - Wikipedia, the free encyclopedia as it covers some of the best examples of the law of unintended consequences.

A great book, and a good read.