TCS Daily

Economics Books and Podcasts: The Class of 2007

By Arnold Kling - December 6, 2007 12:00 AM

For people who like to read about economics, 2007 produced a bumper crop of outstanding books. Here are my top recommendations.

Well Written

Professional writers are better than professional economists at authoring books that are fun to read. The book that I most enjoyed, and that I am most likely to re-read for pleasure, is Brian Doherty's Radicals for Capitalism, which looks at the origins of the modern American libertarian movement. Doherty provides both an insightful intellectual history and an entertaining gossip-column story that covers Ayn Rand, Murray Rothbard, Ludwig Von Mises, and numerous lesser-known but very colorful characters.

Another favorite was Amity Shlaes' The Forgotten Man. It gives you a feel for the stumbling and groping that Hoover and Roosevelt did during the Great Depression. The conventional story, in which Roosevelt uses superior brains and know-how to overcome the Depression, is a myth that will never die. But Shlaes' account is far more accurate, for anyone willing to face the truth.

Shannon Brownlee's Overtreated is another book that runs counter to a lot of conventional wisdom. Brownlee dares to suggest that Americans consume too many medical services. The book is filled with surprises, including a heroic portrayal of a Dartmouth health care economist. If any book on policy can be described as "I could not put it down before I finished reading," this is it.

Many economists enjoyed Thomas McCraw's Prophet of Innovation, a biography of Joseph Schumpeter. While McCraw succeeds in making the story interesting, in the end I did not find the book rewarding. Regarding Schumpeter, I tend to share Robert Solow's assessment: "The man was all problems, and one very important idea."

High-impact Books

Two books stand out as having high impact. Myth of the Rational Voter, by Bryan Caplan, nails 99 theses to the door of the church of the adoration of popular democracy. Gregory Clark's Farewell to Alms suggests that the Industrial Revolution above all required widespread improvements in human characteristics.

The core of Caplan's book is an analysis of survey results that show systematic differences between the average beliefs of economists and average beliefs of the lay public when it comes to economic policy. This means that politicians who appeal to the average voter promote policies that impose large economic costs. The book is disturbing because it says that we cannot both encourage broad participation in economic policymaking and at the same time expect good policy to result.

The core of Clark's book is a graph showing how the standard of living has evolved over the past 2000 years. He argues that all of the improvement has taken place since about 1750. Prior to that, the economy was "Malthusian," meaning that all of the technological progress that occurred was canceled out by population growth, which held the average person's standard of living back at subsistence levels.

Clark's most novel and controversial thesis is that the Industrial Revolution depended primarily on a base of workers with enough discipline and intelligence to fit in with the factory system. He argues that in England the Darwinian selection process produced more factory-capable workers than in other countries.

Great Minds at Work

Two books that show economic intellect to advantage are Discover Your Inner Economist, by Tyler Cowen and One Economics, Many Recipes, by Dani Rodrik. Cowen's book is a set of observations on everyday life, while Rodrik's book looks at the high-level issue of which economic institutions to recommend for underdeveloped countries. I made the case for Cowen's book here and the case for Rodrik's book here.

What Cowen and Rodrik have in common is a gentle approach. In contrast to Caplan and Clark, who self-assuredly hammer away at alternative viewpoints, Cowen and Rodrik allow room for disagreement and self-doubt. Cowen and Rodrik encourage their readers to think, and I encourage readers to try to learn how to think like Cowen and Rodrik, whether or not you agree with them.

Business Books

Ben Casnocha's My Start-up Life is a wise, enjoyable business memoir--written just before the author set off to attend his first year of college! Charles Koch's The Science of Success comes from a much older CEO in charge of a much larger business. I used it in my George Mason University economics class, because Koch explains and illustrates some important basic terms, such as comparative advantage and spontaneous order.

Other Standouts

Randall Parker's The Economics of the Great Depression is a must-read for anyone who wants to be informed about that topic. It consists of interviews with economists who have done the important research on the most significant economic event of the past hundred years. Note that the publisher intends to come out with a less expensive paperback edition in the near future.

Paul Collier's The Bottom Billion is another look at the problem of underdevelopment. He offers considerable wisdom on the subject.

Kevin Lang's Poverty and Discrimination is a highly polished, professional look at the data and economic analysis of poverty in the United States. I wish every journalist or political operative who claims to know something about poverty would read this book.

New Media

This has also been a vintage year for audio interviews and video talks available on the Internet. Here are some of my favorites:

--Don Boudreaux interviewed by Russ Roberts on the topic of government and markets
--Paul Romer interviewed by Russ Roberts on the topic of economic growth
--Bruce Bueno de Mesquita interviewed by Russ Roberts on democracies and dictatorships
--Tyler Cowen gives a talk at Google. He discusses auctions.
--Tyler Cowen talks about the economics of blogging.
--Al Roth talks about designing markets to match people, with applications to kidney transplants and medical residencies.



economic books
Yes, it's good that all these nice books keep coming out all the time. But still, we've had good books on economics right back to Adam Smith, and people still don't believe in free markets. Then about 100 years ago we had the excellent Austrian economics school, v.Mises et al. and the capitalistic agenda is STILL not follwed mostly. It seems like a dismall failure when we see so much clamouring for more statism around, more big government, more welfare nanny state movement, more protectionism, etc. The movement for proper economics and smaller government has been a dismall failure.

Suggested Addendum to Your List
I feel I must add a plug for P.J. O'Rourke's "On the Wealth of Nations," which is a fine tour of Adam Smith's book, and of his ideas. (I should probably admit that I intend never to read Adam Smith's book.)

doesn't matter if you didn't read Adam Smith
It's because even many of the people who have read it, and agree with it, still don't act on it. Imagine all those people involved with the subsidies saying they prepared to change their own lives. Imagine all the politicians who depent on buying votes changing their ways. Imagine all those tax lawyers, and HH Block, and all the IRS saying lets just change it all.

So you are like most people, they consider a freedom agenda on a theoretical level, or academic one, but just don't want to act on it. In fact, most people are willing to have their neighbours killed to defend the present system.

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