The Importance of Economics
At least 3/4, maybe as many as 9/10 of the problems, in the USA can be explained with economics. Economic theory predicts that certain government actions will cause certain problems. Lo and behold! The US government has taken these actions. Miracle of miracles! The problems predicted by economics have appeared.
Upon reflection this isn't that surprising; economic ignorance is wide-spread. The politicians running the government know about as much about economics as Dilbert's PHB knows about engineering. This is a serious problem. Pressure groups and professional lobbyists often use the ignorance of economics to get legislation passed that benefits them at the expense of others.
If we want to fix the problems in this country we need to spread good economic sense. In the interest of helping others learn, I've compiled a list to help them get started:
- Economics in One Lesson, Henry Hazlitt
- The best book on modern economic falacies. Each chapter examines a prominant, false economic arguement and then analyzes it's effects to show where the slip in logic occurs. If you read just one book on this list, Economics in One Lesson should be it.
- Economic Policy , Ludwig von Mises
- This is a descriptive book. It discusses the major findings of and the important misconceptions about economics. Because it is short, it does not go into thorough logical proof of each point. This work serves as a solid overview and good introduction.
- Economics for Real People , Gene Callahan
- The best introduction to modern, marginalist economics. It contains most of the essential material of but is substantially less technical then one of the major treatises. As a general introduction to economic theory this book can't be beat.
- The Constitution of Liberty, F.A. Hayek
- written by a nobel laureate. Although this is not a pure economics book, the questions it deals with are tightly tied to economic theory. This book examines the arguement for liberty, the history of its development, and the implications that can be drawn from it. Because Hayek is an economist, the book often examines the relationship between liberty and economics. If you read one book after reading Hazlitt, make it this one.
Between the introductory books almost every important work gets cited at least once. If you read these four you will be able to put a very long list of future reading together.
Important Recent Works (more advanced):
- Human Action , Ludwig von Mises
- A systematic explaination of marginalist economic theory. It covers everything from the philosophical and scientific foundations to the implications. If you have any serious theorectical objections to economics or its findings, this book probably deals with them. The material in Callahan is more then sufficient for most people, but those interested in more thorough, technical coverage can consult this book.
- Law, Legislation, and Liberty, F.A. Hayek
- Why do democratic governments end up pasing legislation that doesn't benefit the citizens? This follow-up to Constitution examines the causes and proposes several corrective measures. The conclusions are very interesting and insightful.
- Capitalism , George Reisman
- A massive tome that contains several original ideas and should be read by anyone particularly interested in the technical aspects of economics. Chapters 6-8, the demonstration that Bohm-Bawerk's theory of capital subsumes all of classical economics, and the net-consumption theory of profits are the most important sections of the book. Becuase this is more recent than Human Action, important recent issues not covered in Human Action are discussed in this book. This book is also more accessable to beginers.
- Socialism , Ludwig von Mises
- Considered the strongest critique of Socialism in its various forms: Fascism, Communism, Syndicalism, etc. This is the first book to demonstrate that Communism does not work "on paper" let alone in practice. Even though this book was written in 1922 and ostensibly deals with socialist doctrines, it is still revelent today because many of the political programs causing problems are based on socialist ideas. Furthermore, because this book was written in post-WWI Austria, it will open the reader to a different view of world events then the one presented in the typical American view of history.