What are the best books on Economics?

Jason Quintana's picture
Submitted by Jason Quintana on Thu, 2006-02-09 21:34

In past economics discussions among Objectivists I've seen all manner of different opinions on the subject.   Usually the discussions break down without anyone coming to a clear idea about what the other person is trying to say.

  • A large population of Objectivists are supporters of this or that variant of Austrianism.  Many learned their economics from Hazlitt or Mises.  Some are Rothbardians and others got their economics from reading Hayek.  Some of the younger Objectivists got their economics education from Reisman.  
  • I have seen several Chicagoites among Objectivists quoting people like Friedman or Sowell. 
  • I have even seen a fair number of (gasp!) Keynesians among Objectivists who probably got their education on the subject from university courses.

Because of these differences I've found that discussions can be difficult even among hardcore capitalists like Objectivists because of the differing methodologies, epistemologies and terminology utilized by their teachers.  So instead of arguing about theory we can start out by arguing about who the best teachers are.   Here are the books that I think are the best :

 

1.  Economics in One Lesson - Hazlitt

2.  Capitalism - Reisman

3.  Human Action - Mises

 

 - Jason


( categories: )

Re: Marx

Rick Giles's picture

Who is the economy for? How can its benifits best be shared?"

Well, it could very well be important that these (invalid) questions and issues get raised

The economy is for all of us- large and small and ugly and dirty and rich and poor and spotty and yellow and black and white alike.

The benifits of the economy can best be shared by instituting a free market based on individual rights.

Excuse me, these are valid answers to valid questions.

Had he raised these issues and questions for honest purposes...

What the hell does that have to do with it? The ideas still work, still advanced knowledge and aired questions and issues. Rutherford's honest purposes didn't do Chernobyl victims much good. The facts of economics, like those of physics, take their merit beyond the human prejudices that origionally delivered them.

re Keynes
But I haven't nearly the ill opinion of his character that I have of Marx

What is it with you people? Always interested in character and biography as prime touch-stone for scientific fact? There is nothing in the metaphysics of causality that makes an economic system poor or goodly based on what the author liked to eat for breakfast!

So the "value" of Marx is entirely negative, like the rancid puddle in the public restroom needing cleaning-up as a health precaution. It's too poisonous to ingest and hope that your pathogens can immunize you

Nonsense. As Ayn Rand said, t'is but fog. I'm not afraid of Marx's power over my mind- let him take it if he can.

Re: Marx,

Chris Cathcart's picture

Rick writes:

"With great insight he asked the questions and raised the issues that modern economics continues to define itself against. Who is the economy for? How can its benifits best be shared?"

Just a sec...

{goes to hurl}

Okay, I'm back.

{wipes chin}

Well, it could very well be important that these (invalid) questions and issues get raised, for the purpose of exposing their fallacies, and of exposing Marxian dishonesty. They are, indeed, questions and issues that currently rule public policy-making -- for the worse. So we can thank Marx and his ilk for pushing public-policy thinking in a more corrupt direction.

Had he raised these issues and questions for honest purposes, implying that he had honest means of dealing with them, rather than skillfully and dishonestly use these questions and issues for socialist ends, we might well be in much less of a mess, the 20th century may not have seen so much totalitarian oppression, etc.

Marx is part of a larger problem -- of altruism -- that make the "issues and questions" you mention politically viable to begin with. His role was of skillfully pandering to altruism, particularly in its socio-political form, collectivism.

Keynes, I'm not really sure about. He might well have been the fabled FDR of the economics profession -- he was trying to come up with some way to "save the system" against that rising tidal wave of Marxism going on around that time. He had high praise for Hayek's Road to Serfdom, which may actually indict him in the eyes of Objectivists. But I haven't nearly the ill opinion of his character that I have of Marx, the evidence of whose dishonesty is quite strong, indeed. And of his generations of followers who evaded the overwhelming reasonableness of the marginal theory of value (the likes of Hilferding evading it openly, in print, in his reply to Bohm-Bawerk) in order to cling to their religion.

So the "value" of Marx is entirely negative, like the rancid puddle in the public restroom needing cleaning-up as a health precaution. It's too poisonous to ingest and hope that your pathogens can immunize you; you reject it as the poison that it is. Keynes, sounds like there's more room for the "ingestion." At least Keynes puts up some tough challenges. Marx, on the other hand, is barbaric and obsolete.

(Maybe the pathogen analogy is a bit off. Don't take my aversion to the filth that is Marx as an aversion to studying him. Study him! In order to identify him and his ideas as the abject filth they are. Once exposed as the total fraud that he is, what in there is worth taking seriously? He's a lowly altruism-panderer that the leftist boobeoise latched onto because he was the best they could muster for so long.)

The value of

Rick Giles's picture

Marx?

He was the first man to identify the limitless power of capitalism, and to praise it for the amazing positive transformation it had given to the world. He helped define the modern world more than nuclear power, more than electricity, more than television! With great insight he asked the questions and raised the issues that modern economics continues to define itself against. Who is the economy for? How can its benifits best be shared? What is the name of the specter?
Of course he's worthy of study. Never mind his motives or his system, the man turned over some rocks and with great prose!

Paul Samuelson?

Again, a resounding yes! This is the man who made Keynes witty and consise for the masses and transmitted it to millions. Every undergraduate student is subjected to his brilliant 'Keynesian-Cross' and his other teachings. The Kennedy Administration was thick with these ideas. He helped make the C20th too. He told us how we could and should go into fiscal deficit for the sake of ending unemployment- and we believed it. Another economic superstar.

I absorb these ideas into me like intellectual pathogen and let my Objectivist antibodies kill and assimilate them and in doing so make me stronger in my immunisation! That's economics at its best.

Keynes vs The Austrians on DVD

Jameson's picture

For a brilliant walk across the plains upon which the Austrians routed Keynes, I recommend "Commanding Heights: The Battle for the World Economy" - a triple disc DVD available from Amazon for the very reasonable cost of 32 greenbacks.

http://www.amazon.com/gp/produ...

Glenn Jameson

Schools & pro-capitalists

Chris Cathcart's picture

There's a very large kernel of good advice in your post, Rick, which applies to one's study of philosophy as well. You need to know the teachings of many of the different schools to be able to evaluate them from what you describe as a universal-thread vantage point. Is Mises so highly recommended amongst Objectivists because he's pro-capitalist, even if he might peddle an "inferior" product qua economist? That's for each educated mind to judge. There are all kinds of tomes and viewpoints out there that may have little at all to do with presenting a certain political viewpoint.

I just happen to be amongst those who basically hold to the idea that economics (the general study, not a particular school), being a science in a much healthier state today than the humanities, naturally ends up showing the virtues of the capitalist system. And so the folks in the profession are much less left-leaning politically on the average, and there are a good share of strongly (not laissez-faire, though) pro-capitalist Nobel Laureates, Friedman and Hayek being the major examples.

Marx is corrupt as a philosopher, so one should approach his economics writings with that cautionary note in mind. Still, do his economics works show us much of any value, qua study of economics? Since so much rests on his labor theory of value, it's very much doubtful, as the whole edifice rather depends on it. And it's a doctrine that I believe Marx held to dishonestly, since his entire project was dishonestly-motivated: his main intent was to show that the system would eventually collapse, and the rest was subordinate to this.

Now, take an economics text like Paul Samuelson's. Is that going to provide objective value to the reader, above and beyond the value of knowing thy enemy? Here, we come up against something of a barrier in its own right: textbooks are boring for the general reader to read. That's why, whatever its merits as an economics text, Rothbard's Man, Economy, and State already faces a disadvantage relative to Human Action. I find the latter simply a more interesting read. Reisman's Capitalism is daunting to the general reader for similar reasons; if one were to cut up his treatise into two books for easier carry, just for one thing, you'd have a general-audience econ reader in one book, a technical text in the other.

One major problem is making economics accessible, interesting, and truly educational to the general reader. I've tended to get bored when the technical details (often mathematized) of, e.g., the Keynesian system are addressed, by whichever side of the debate. It just seems like too much is being thrown at the general reader to try and integrate, and usually out-of-context of basic economic understanding.

Perhaps I'm just speaking from personal experience, after my interest in the subject (I was an undergrad econ. major) declined relative to my interest in philosophy after encountering Rand. There just isn't enough to hold my interest unless it's tied to broader human subjects, which is my reason for bringing up Human Action in my first post. If I knew of other interesting and meritorious treatises that dealt similarly with the study of economics from some other school or political ideology, and not rife with dishonesty and corruption like Das Kapital, I'd probably think to mention them.

BTW, Menger's Principles has next to no explicit political ideology (much less "school"-affiliations), and yet is excellent as an introduction. It even manages to stay interesting to a beginner and non-specialist despite being more or less strictly an economics text. If one wants to study economics as a science and not read quasi-political polemics that don't exactly build from basic foundations, this would be a better place to go than to Hazlitt's oft-cited One Lesson. Maybe there are other econ primers out there that are as good as Menger's, but I wouldn't know.

The real best books

Rick Giles's picture

It may seem logical that the best books on economics will belong to the best economics school. However, my argument is that this is not so.

One does not become a true economist by becomming steeped the capitalist doctrines mentioned below. Likewise, one does not become a true philosopher by dining only on the doctrine of Ayn Rand; Nor does one become wise in farming itself by tending a single crop or stock.

In every science or cognitive discipline there is an essence that transcends the state of the art. This is the same logos or scholarship or kernel that has been like a thread running through the thoughts of all thinkers on any given subject. In economics this thread was first created by Adam Smith, but it outlasted him as it will outlast the economists of today.

The highest economist is an economic philosopher. His subject matter, like all the great economists, is not a single doctrine but this special thread that runs though them all. He thinks about the essence of economics as if it's a mountain and he has to cut his own trail to the summit. He is not content to live off the scraps of begged opinion, he considers economics first-hand in the same way that the great economists considered them. By reading the works of great economists one studies not directly their practical use but their way of thinking about the problem. Economics is a very young science with much unmapped territory. The true course of econmics inheres in making new discoveries in that uncharted territory, not in simply learning by rote the lessons of a Hazlitt or a von Mises.

There is a hierachy of economists. There are underlaborers- econometricians, technitians of economics. There are students, there are teachers. There are workers, perhaps at the bank or in journalism where they apply economics. Higher still are the policy-makers, advisors to political leaders. But at the top of the heap are the very best, the great economists- the intellectual pioneers. Their thinking changes the whole world. Smith, Mill, Marx, Marshall, Keynes, von Mises, Friedman, and so forth. This is the best of economics therefore the subject of their great works makes for the best of economic literature.

What you aquire from studying the greats is hard to boast about. It is seldom taught at school and the value you get cannot be measured in course credits. Parents and teachers and friends will scoff and make you feel ashamed for spending so much time 'away with the fairies' 'just thinking.' All the same, the best economics consists in examining and truely understanding at the coal-face these fundamental premises. You're in a better position to understand your chosen school as well as to defeat the competing ones. And then, if you have talant, you could become a great economist yourself.

So, the best books are the economic histories. Dewy Decimal 330.

Menger's Principles, Mises' Human Action

Chris Cathcart's picture

I'm not alone when I say that Menger's Principles of Economics is one heck of an econ primer. Mises' Human Action is very broad and comprehensive in scope, treating economics in the context of history, social theory, political theory, philosophy, psychology, etc. and, compared to other econ treatises, should be much more interesting to a general reader on that basis. Despite all the couchings in Kantian language and assumptions, he has some very important things to say about methodology, for one thing.

Jason - I have not been

Jason -

I have not been able to take a course but I've heard several recordings (from people who have) and the ocational podcast from his radio appearances. Its on my list of things to do while I'm fairly close here in Maryland.

Books by Mises

Kenny's picture

You can download free PDFs of Mises' (and dare I say Rothbard's on an Objectivist site) works from the Mises Institute (mises.org). Just don't tell the folks at ARI or Bob Bidinotto,

Good stuff

Jason Quintana's picture

Mike - Yes, Mises is one of the premier examples of the great scholarly thinkers that seem to have existed between the later part of the 19th century up until about the middle of the 20th century. It is very difficult to find that kind of intellectual clarity, vast knowledge, clear reasoning and pristine prose these days. In Human Action all of this was accomplished in English after years of writing in German!

Mark - That all depends on what you mean by "hard science". The Austrians regularly complain that it is modern economics, represented by the universities which has tried to accomplish this feat and has failed. I would prefer to say that the people you mentioned have worked toward turning economics into an objective discipline rather then a hard science.

I have seen David Friedman's book a few times. Maybe when I decide to read another book an economics I'll pick that one up.

- Jason

Hidden Order

James Heaps-Nelson's picture

Jason,

I have to agree with Mike Erickson's recommendation of Hidden Order. It's been about 10 years since I've read it, but it contains terrific, essentialized examples of the pernicious effects of taxation and exactly how those effects manifest themselves and why. David Friedman is also a terifically entertaining writer.

Jim

My #1

Bikemessenger's picture

"The Economic Laws of Scientific Research" by Terence Kealey:

http://www.amazon.com/gp/produ...

Is the best free market advocacy book I've ever read by far. Interestingly, Kealey is no economist; rather, a microbiologist.

Having worked with every conceivable available source of funding, he noticed one particular source frequently associated with over-all poor results.

That being government funding (surprise, surprise). He set out to determine why.

The investigation turned out more expansive than originally intended, but this author manages to tie it all together.

What makes this a unique and special book, aside from the author's entertaining style, is that he clearly did not set out with the goal of free market advocacy; rather, it is a conclusion arrived at from the research done for the book.

Along the way, he debunks the popular notion of the need for government funding of "pure" science, supposedly because while essential, it's unprofitable.

In providing a comprehensive historical framework, he illustrates how the rise of human civilizations has been due to the convergence of technological advances spurred by immediate practical need and an evolved free market which facilitated and provided incentive.

He goes on to demonstrate how empires emerge and inevitably collapse, consequent to their turn from productivity to plunder; finally running out of viable victims.

---The Bikemessenger
(AKA Impeachasaurus Rex)

It's "Not" A Rose By Any Other Name

Mark Dow's picture

“I've found that discussions can be difficult even among hardcore capitalists like Objectivists because of the differing methodologies, epistemologies and terminology utilized by their teachers.”

Would the same be true for mathematics?

I would argue that there are no “versions” of economics, there is only one economic theory that corresponds to objective reality, and that the Austrian and Chicago schools of thought are in process of discovering it. Most other theories (especially on the left) are not “economics," i.e. science. I would also argue that someday, economics will no longer be in the Humanities but will be a hard science. For my money I like Milton Friedman. His inflation expectation, and monetary theories totally destroyed Keynes’s “General Theory,” and his famous “Multiplier” (something for nothing nonsense) over thirty years ago. That fact that that crap is still being taught in most universities is reason I "drop in," and "tune out."

David Friedman

Mike Erickson's picture

Jason,

I liked David Friedman's "Hidden Order, The Economics of Everyday Life". I remember it a being very engaging and I could relate to the examples. Friedman also has a sense of humor. I recently read "Freakonomics" which wasn't bad in some parts but I remember liking "Hidden Order" much more. I haven't read Reisman's "Capitalism" and it's been too many years since "Human Action". But Mises writing is just beautiful. I remember enjoying the way he wrote so much I sometimes lost track of what he was saying. Of course, then I got to read it again. I like anything by Thomas Sowell.

Mike Erickson

All of the above

Jason Quintana's picture

I put Economics in One Lesson first due to its status as a brilliant beginner text. I think that a reader could attain a good education in economics by reading the three books I listed in order. I am looking for your favorite combination of books for all of the purposes you mention and for all levels of knowledge from beginner to advanced. Someone could certainly begin with Hazlitt and move on to Mises or Reisman.

My poll is aimed at browsing the intellectual background of the people on SOLO on the subject of economics. So what is your own list?

- Jason

What is the goal?

Rick Pasotto's picture

It makes little sense to ask for the "best" economics book without specifying the purpose. Do you want a defense of capitalism, a basic understanding of how economies work, or an indepth understanding of economic science? What is the reader's current level of knowledge?

Putting Economics in One Lesson and Human Action on the same list is absurd. They're addressed to completely different audiences.

I also enjoyed The Making of

Charles Henrikson's picture

I also enjoyed The Making of Modern Economics; it's by Mark Skousen. I also have his power of economic thinking, that is entertaining.

Sowell and Williams are both solid

Jason Quintana's picture

Were you able to take a course with Dr. Williams? I would kill for an opportunity like that. I have the "Basic Economics" book by Thomas Sowell and it is indeed very good. It would be second on my list of introductory texts after Hazlitt.

- Jason

Did I miss something in my

Did I miss something in my Basic Economics and lectures from Walter E. Williams? I found them to be pretty reasoned. I just read Bernstein's The Capitalist Manfesto last month and though its not very in depth in the economics area it is a very stimulating and motivational introduction to economics. I have not read the titles you listed but I will add them to my list.

The Making of Modern

dvo's picture

The Making of Modern Economics (I think that's the right title) is an awesome book.

Economics in One Lesson is excellent also.

Sturdy list, Jason

Ross Elliot's picture

The first books I read on economics after Rand's Capitalism: The Unknown Ideal (more philosophical, to be sure) were The Incredible Bread Machine and Mises' Socialism (phew!)

For beginners I'd recommend: TIBM, Rand's CTUI and without a doubt, Isabel Paterson's The God of The Machine. Then I'd throw Hazlitt's wicked little number at them.

Those three give the basis of and rationale for capitalism more than the a hardcore nuts and bolts analysis, but are a great intro, particularly Isabel Paterson's gem.

[Throw in lots of Rothbard (with caveats about the anarcho leanings) as well Eye ]

Here's R.W. Grant's poem, Tom Smith And His Incredible Bread Machine, from the original edition of The Incredible Bread Machine. Satire, sarcasm, illumination. Brilliant.

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