Economics
Gary S. Becker. The Economics of Life. Becker is the 1992 Nobel Laureate, and this book is a compendium of his popular monthly columns from Business Week. Becker is famous for applying economics to a wide variety of public policy issues, from discrimination and marriage and family, to crime and punishment.
David D. Friedman. Price Theory: An Intermediate Text (second edition); and Hidden Order: The Economics of Everyday Life. David Friedman is Milton and Rose Friedman’s son and an outstanding economist from Santa Clara University. Both of these books are an excellent read, the latter being especially entertaining.
Milton and Rose Friedman. Free to Choose: A Personal Statement; Capitalism and Freedom; and Two Lucky People. Milton and Rose Friedman are each eminent economists, and these books are classics, and a must-read for anyone who wants an understanding of how free markets work.
**TOP CHOICE George Gilder. Recapturing the Spirit of Enterprise; and Wealth and Poverty: A New Edition of the Classic. In Baker’s opinion, Gilder is the best writer and thinker on economics, sociology, technology, and entrepreneurship that you will find. Discovery of his work, Wealth and Poverty, in 1981, forever altered his vision of the way the world works. These two books are Gilder’s classics, but he has written many others. If you read only two books from this entire list, read anything by Gilder—twice. Gilder is a senior fellow at Seattle’s Discovery Institute (http://www.discovery.org).
Henry Hazlitt. Economics in One Lesson. This book is a classic, originally published in 1946, written by a self-taught economist who worked as a journalist. F.A. Hayek said of this work, “It is a brilliant performance. It says precisely the things which need most saying and says them with a rare courage and integrity. I know of no other modern book from which the intelligent layman can learn so much about the basic truths of economics in so short a time.”
John Kay. The Business of Economics; Foundations of Corporate Success: How Business Strategies Add Value; and Culture and Prosperity. Kay is one of Great Britain’s leading economists, currently a visiting professor at the London School of Economics. Quite adept at explaining economic theory and how it applies to real-life business situations, his books are not easy reads, but worth the effort to understand how economic theory and business really are complements. Learn more about Kay at http://www.johnkay.com.
Steven E. Landsburg. The Armchair Economist: Economics and Everyday Life; Price Theory and Applications (fifth edition); and Fair Play: What Your Child Can Teach You About Economics, Values, and the Meaning of Life. Like David Friedman, Landsburg is an incredibly brilliant economist, besides being an excellent and entertaining writer. He will no doubt challenge, and in many cases persuade, you with his cogent analysis of contemporary issues. Fair Play is a book written for his young daughter, and relates complex economic issues down to the child’s sandbox—a truly fascinating read. To read Landsburg’s Everyday Economics columns, go to http://www.slate.com.
Steven D. Levitt. Freakonomics. Levitt is another dynamic economist applying price theory to the study of a multitude of current topics in this best-selling book, and reaching some unconventional—and sometimes controversial—conclusions. An astounding read. He is the director of the Initiative on Chicago Price Theory at the University of Chicago, and winner of the John Bates Clark Medal, awarded to the best American economist, every two years, under the age of 40.
Charles Murray. Human Accomplishment. Although not an economics book per se, it is such an important work it is worthy of inclusion in the study of human behavior. Murray studied outstanding human accomplishment from 800 B.C. to 1950, and concludes we stand on the shoulders of 4,002 individuals who invented, created, or otherwise innovated all human progress in the sciences (including technology), philosophy, music, visual arts, and literature. What is astonishing about these 4,002 individuals is that the mean age at the time of their contribution was 40. This book proves that there is, indeed, such thing as a free lunch. A good companion read is Benjamin Jones, “Age and Great Invention” available at http://www.kellogg.northwestern.edu/faculty/jones-ben/htm/Research.htm.
**TOP CHOICE Mark Skousen. Puzzles and Paradoxes in Economics; The Making of Modern Economics: The Lives and Ideas of the Great Thinkers; The Power of Economic Thinking; and Vienna and Chicago: Friends or Foes? Skousen is one of Baker’s favorite writers, and does an excellent job with the history of economics ideas, especially from an Austrian perspective. Each of these four books is an excellent read, the second one an engaging and engrossing survey of the leading economics thinkers, providing not only a summary of their work, but also their private and personal lives, while the last is an examination of the differences––and commonalities––between the Chicago and Austrian schools of economics.
Adam Smith. The Theory of Moral Sentiments (1759); and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). These are Smith’s major books, which are the basis for the classical economics view of markets. Smith is wrongly attributed with saying—or making the case that—greed is good; he never said or implied any such thing. He believed in a system of natural liberty, operating under the guidance of an “invisible hand.” For an excellent summary of Smith’s thinking, in the genre of an academic novel, see Saving Adam Smith, by Jonathan B. Wight, a well-written, innovative work of economics history. The Liberty Fund has an excellent electronic library of each of Smith’s works, which you can search by topic, keyword, phrases, and so forth, at http://www.econlib.org.
Thomas Sowell. Applied Economics: Thinking Beyond Stage One; and Basic Economics: A Citizen’s Guide to the Economy (revised and expanded edition). Thomas Sowell is one of the nation’s leading economics writers and scholastic thinkers, and is the Rose and Milton Friedman Senior Fellow on Public Policy at the Hoover Institution, Stanford University. What is extraordinary about these works is that Sowell explains economics without using any graphs, equations, or charts, and makes the complex quite understandable. He has written many books, all of which are worth reading. Learn more about Thomas Sowell at http://www.tsowell.com.
Richard H. Thaler. The Winner’s Curse: Paradoxes and Anomalies of Economic Life. This book explains the famous winner’s curse (relevant to requests for proposals and other bidding situations). Thaler is one of the pioneers of a new area of research known as “behavioral finance” and offers many interesting examples and theories of human behavior, some of which challenge the economist’s assumption of rationality.