So you want to learn about economics, but don’t know where to start. Look no further.
If you read these ten books, you’ll be able to hold your own in any conversation.
And if you’re feeling industrious, also check out my expanded list of my favorite economics books.
1. A Splendid Exchange, by William J Bernstein
If you want to learn about economics you have to start with the history. History is the foundation of all the social sciences, it’s our ready-made laboratory, it’s our data-set, it’s our primary source.
So learning history is a must.
William J Bernstein’s A Spendid Exchange is a comprehensive, yet accessible introduction to economic history. He covers everything from the neolithic period until today, in a chronological order.
2. How To Lie With Statistics, by Darrell Huff
This isn’t an economics book, but it’s indispensable for anyone who wants to learn about economics.
Darrell Huff’s How To Lie With Statistics is the classic introductory text for people wanting to understand how to understand statistics, how to interpret them—and how to spot fakes.
Economists routinely use data to prove their points, and most people take it for granted that their data says that they want it to say—often it doesn’t.
This book will remind you to stay skeptical, and give you the basic tools for reading any book on economics.
3. Basic Economics, by Thomas Sowell
Thomas Sowell’s Basic Economics is a great starting place for learning the basics of economic theory. He writes clearly and concisely, and tells you what you need to know.
In fact, once you understand what’s in this book, there’s not a whole lot else classical economics has to offer.
Simplicity is truth.
4. Future Babble, by Dan Gardner
This may seem like an odd choice, but I think Dan Gardner’s Future Babble, or Superforecasting which he co-authored with the famous Philip Tetlock, is worth reading.
Because the entire book is dedicated to explaining how, and why forecasters (particularly economists) are usually wrong.
This is a bitter pill to swallow for most students of economics—some never swallow it. But if you don’t recognize the predictive limits of our economic theories, you’re doomed to failure.
5. Antifragile, by Nassim Nicholas Taleb
Nassim Taleb’s Antifragile is a game-changer.
In it he explains how the world of economics (and many other disciplines) is governed by power laws—where variables have non-linear relationships.
What does that mean?
Basically, the world of economics is not governed by millions of small interactions, like classical economic models suggest, instead, it’s governed by a small number of unpredictable big changes—what he calls black swans.
For example, almost all of the economic growth that occurred in England between 1300 and 1820 took place between 1800 and 1820, where the economy grew by over 8% per year.
However, between 1300 and 1700, the economy grew by an average of 0.21% per year—the growth in that 20 year period was likely greater than the preceding 800 year period. When things change, they change big-time.
6. Thinking Fast And Slow, by Daniel Kahneman
Daniel Kahneman (who’s wont he Nobel Prize in economics) and his research partner Amos Tversky are the founders of the field of behavioral economics, which applies the lessons of empirical psychology to economics.
The main point of Thinking Fast and Slow? People aren’t rational—we make most of our daily decisions according to a set of acquired and genetically hardwired heuristics (decision-making shortcuts).
This has big implications for economics. Take note.
7. The Intelligent Investor, by Benjamin Graham
This isn’t an economics book. It’s an investing book.—so why did I include it?
Because most economists have safe jobs as tenured professors at universities: if they’re wrong, it doesn’t matter. They have no skin in the game.
Investors, on the other hand, put their money where their mouth is—if they’re wrong they pay (a steep) financial price. If they’re right, they’re rich.
That’s why I usually trust investors and businessmen over economists. They look at things from different angles, practical angles. They see the world for what it is, and don’t give a crap about theory.
This book will give you a different perspective on economics, and will give you a taste of what really drives the economy: businesses and people, not abstract theories.
8. The (Mis)Behavior of Markets, by Benoit Mandelbrot
In his book The (Mis)Behavior of Markets, Mandelbrot extends the logic behind fractals (complex, repeating patterns that look the same no matter how close or far away you are) into the realm of stock prices and economics.
He observes that stock price fluctuations conform to fractal patterns: the chart looks roughly the same whether you’re looking at it by the minute, hour, day, week, month etc.
This book is confronts many of the assumptions of classical economics, and will help you understand economics in a completely new way.
9. Economics and World History: Myths and Paradoxes, by Paul Bairoch
Paul Bairoch’s Economics and World History: Myths and Paradoxes is a confrontational, revisionist history that challenges many of the assumptions that classical economists hold dear, including the notion of free trade itself.
But that’s precisely why it’s valuable: Bairoch’s contrarian positions and skepticism are a vital critique on a relatively ossified discourse.
It’s a breath of fresh air.
10. How Rich Countries Got Rich . . . and Why Poor Countries Stay Poor, by Erik S Reinert
This book answers the money-question, the one we’ve all been waiting for: how do countries get rich?
After all, isn’t that the whole point of economics? Making sure everyone’s as wealthy as possible?
Bonus: America Betrayed, by Spencer P Morrison
Like Reinert, my book looks at how countries get rich—but I combine a wider range of interdisciplinary scholarship than he did, and provide a better answer (if I do say so myself).
The book’s written for a general audience, and I tried to avoid jargon wherever possible.
You’ll love it.
Get a copy.