The Economist, a disappointing magazine, has a fittingly disappointing list of “What to read to understand how economists think.” It’s one of their “evergreen” articles that they repost from time to time.
It includes Friedman’s Capitalism and Freedom, Heilbroner’s The Worldly Philosophers, Dubner and Levitt’s Freakonomics, and two lesser-known works. These readings would give a beginner a nice view of ad hoc “Except-this-and-that Capitalism” – markets are ok for some things, but are likely to fail in either predictable or counterintuitive ways, which is why we need regulation or outright nationalization of some industries. Regarding The Worldly Philosophers, Murray Rothbard wrote his own history of economic thought as “a sort of contra-Heilbroner,” a rejection of the “few Great Men” approach.
Here’s my list:
- Economics in One Lesson by Henry Hazlitt.
This was my first encounter with economics—it sparked an interest that remains to this day, and my experience is not unique. Economics in One Lesson has introduced many people to a solid understanding of economics and how to think about policies like government “stimulus,” taxes, price controls, and credit expansion. Spoiler: the “one lesson” is that when considering the effects of some event or policy, we ought to consider the long-run as well as the short-run and the effects on all people, not just one particular group. Hazlitt famously retells Bastiat’s parable of the broken window as the first application of this principle. Economics in One Lesson is a classic for a reason, and it is my go-to recommendation for those who are new to economics.
- What Has Government Done to Our Money? by Murray Rothbard.
“Few economic subjects are more tangled, more confused than money,” says Murray Rothbard at the outset of What Has Government Done to Our Money? This book untangles all the wrongheaded thinking about money. Money is a product of the market, as shown by Carl Menger and Ludwig von Mises, and the state has merely co-opted it over the centuries. Rothbard carefully but plainly tells the story of money, banking, and central banking, from the classical gold standard to the fiat paper currencies that dominate today. He shows that “government meddling with money has not only brought untold tyranny into the world; it has also brought chaos and not order.” This is essential reading for anyone who wants to understand what has wrought the leviathan states and civilization-destroying tendencies of our modern world.
- Economic Policy: Thoughts for Today and Tomorrow by Ludwig von Mises.
This book is one of the best introductions to the ideas of Ludwig von Mises, along with Bureaucracy and The Anti-Capitalistic Mentality, as Bettina Bien Greaves points out in the introduction to the 1995 edition. The reason I included Economic Policy: Thoughts for Today and Tomorrow in this list instead of those is because it is broader in scope and its content was intended for those who are new to Mises’s ideas. The book originated as a series of six lectures on “Capitalism,” “Socialism,” “Interventionism,” “Inflation,” “Foreign Investment,” and “Politics and Ideas” for hundreds of Argentinian students. Mises’s wife, Margit von Mises, recalled that her husband gave these lectures without any notes except “a few words, written on a scrap of paper,” and yet “he knew exactly what he wanted to say, and by using comparatively simple terms, he succeeded in communicating his ideas to an audience not familiar with his work, so that they could understand exactly what he was saying.” Thankfully, the lectures were taped, transcribed, and published so that anyone can be teleported to that Argentinian lecture hall in 1958.
- Choice: Cooperation, Enterprise, and Human Action by Robert Murphy.
Another great introduction to Mises is Choice by Robert Murphy. Human Action, Mises’s magnum opus, is a dense and systematic treatise of almost a thousand pages, and it continues to be the foundation for scholarly work in Austrian economics to this day. (Do not let me scare away potential readers, however. Reading and studying it is both fruitful and essential for anyone who wants to call himself an Austrian economist.) That said, beginners who are reluctant to pick up this tome have great options, including Murphy’s clear and thorough book, which, according to the author is “an introduction and an invitation to the most important work of arguably the most important Austrian economist.”
- How to Think about the Economy by Per Bylund.
Here is a true primer for beginners. In How to Think about the Economy, Per Bylund introduces the reader to dozens of topics in economics in a straightforward and accessible way. He defines economics and explains how to do economics. He discusses what markets are, what entrepreneurs do, where money comes from, and why profit and loss are so important. In the last two chapters, he covers the effects of government intervention. All of this is accomplished in a breezy 137 pages, including a great list of recommended reading for those who want to continue their studies. This is an excellent first stop for anyone beginning a journey into the field of economics.
Honorable mentions: An Introduction to Austrian Economics by Thomas Taylor, How an Economy Grows and Why it Crashes by Peter Schiff, An Introduction to Economic Reasoning by David Gordon, Principles of Economics by Saifedean Ammous, and The Bastiat Collection, by Frédéric Bastiat and edited by Mark Thornton. For kids and teens, I recommend the Tuttle Twins books; and for little kids, I hope it is not too presumptuous for me to recommend my own The Broken Window and Ludwig the Builder.
