I’ve been doing a lot of reading on economics and related topics lately. Here’s a reading list I’ve compiled of works that I have found particularly compelling:
This provides a good overview of the field of economics and its function of understanding “the allocation of scarce resources that have alternative uses.” It’s a good basic introduction that does not rely on graphs or equations. It provides real world examples to illustrate the principles of economics. Sowell is an unapologetic proponent of the market in most things but he is not afraid to go into cases where the market does not handle matters well and to look at alternatives which may or may not handle those cases better.
Expands on the topics of Basic Economics. Where the first book had the repeated refrain of “efficient allocation of scarce resources that have alternative uses” this one has “thinking beyond stage one.” Many policies that look good, and can actually be “good” (depending on what one considers “good”) in their first effects, the longer term effects can be very different indeed. Again, the book is full of examples and avoids the use of graphs and equations.
In this work, Thomas Sowell takes a close look at the many economic fallacies that are so common in popular thought. Many derive from the fallacy of composition–the idea that because something is good for a part it must be good for the whole. The frequency with which many otherwise intelligent, thoughtful, and knowledgeable people cling to such economic fallacies is a large part of the reason I consider economics “The Dismal Science.”
Coming as it did in a time when planned economies were considered the road to the future, Friedrich Hayek’s “The Road to Serfdom” was a groundbreaking work. It details why attempts at top down planning of the economy must be accompanied by political totalitarianism. Note, as Hayek points out, that the result of totalitarianism is not inevitable–provided that one turns back from the attempt at a centrally planned economy, but only by such turning back.
This work is particularly important now with a younger generation that has grown up not seeing the terrible results of central economic planning on human freedom and prosperity. They think that “this time” they can do it right. They do not realize that the problems are not a matter of poor execution, but are inherent in the very nature of central economic planning.
Mitlon Freiedman discusses the nature of economic freedom, the freedom to make voluntary transactions unrestrained by force whether governmental or otherwise, and how it is strongly coupled with political freedom. Indeed, you cannot really have one without the other. He argues compellingly for the value of free trade, on the individual through the international level.
This book is in many ways an expansion of the contents of “Free to Choose.” Each chapter covers a particular broad topic and argues for why allowing, and encouraging, individual free choice is superior to enforced conformity. He makes the case multiple times in different areas where government intervention and regulation to alleviate certain perceived or very real problems is generally counterproductive creating more problems than they solve. A must for anyone seeking to understand why so many folk value personal and economic freedom so highly.