

Ask HN: Best book(s) to learn about the basics of economics? - culturestate

Given the current climate, I feel a little behind when it comes to broader economic themes. Anyone have any recommendations for texts that can help non-economists grok the subject?
======
Shmulkey
Economics in One Lesson by Hazlitt: <http://jim.com/econ/>,
<http://www.fee.org/pdf/books/Economics_in_one_lesson.pdf>

Basic Economics by Thomas Sowell

Applied Economics by Thomas Sowell

Free to Choose by Milton Friedman (video series, too)

Use of Knowledge in Society by Hayek (short, non-technical paper which is full
of brilliant insights): <http://www.econlib.org/library/Essays/hykKnw1.html>

Not a book, but the Econtalk podcast is fantastic: <http://www.econtalk.org/>

~~~
amh
The "Free to Choose" television series is really great, second that. They're
all on google video, search for the obvious keywords and "long" duration (20+
mins) to find them easily.

I especially liked the debate segment in each show, where Friedman argues his
points with both supporters and detractors. It struck me while watching it,
you really can't find stuff like this on TV anymore.

------
HSO
Please beware that "economics" is a very dangerous subject in that the notions
of "right" or "wrong" are very, very different from theoretical fields like
mathematics, practical fields like engineering, or experimental fields like
physics (yes, I'm aware this is perhaps overgeneralizing, but you get my
point).

My practical advice to a beginner would be: Please disregard any theories in
the beginning, by which I mean both rigorous microeconomic models and
(especially) the narrative sort found in books for layreaders or newspapers.

Stick to data! Read a lot of data. And then some more. Also, instead of
theories about the data generating processes, read their concrete definitions,
what exactly do they measure (not just the general idea they're intended to
capture but what exactly, like "192 vendors of banana in location X are self-
reporting Y"), how are they collected, what market mechanisms exist (market
microstructure), etc. Stick to the concrete and read data.

Only when you're ready to make a commitment, take a year or two off and dive
into economic literature. Economics is a field where, if you don't know what's
what, you will be "had" by the next plausible-sounding, impressive-looking
idée du jour if you're not careful.

One has to know quite a bit to see the assumptions underlying the theories and
how they influence its results, and I can tell you that the mainstream theory
rests on very shaky theoretical foundations. The typical structure of
economics literature is that this weak foundation is first brushed over in one
sentence (usually starting with "we assume that..." and ending with "...to
keep things simple/tractable/whatever"), then comes some big mathematical
exercise, and then comes a very plausible-sounding discussion of the main idea
that is constructed to either resonate or astonish you. there is also quite a
bit of advocacy here, don't forget we're dealing with a real-world subject
with somewhat fuzzy notions of "right" and "wrong", hence the incentive is
there to fund/get funded for certain lines of research or results that support
or refute political views.

Also, unlike in other fields, you will generally not find that the "best"
economists naturally emerge in brand-name departments, like Harvard or MIT.
It's very political. In my own opinion, the better thinkers are found on the
fringes, perhaps with "official" specializations in physics or sociology or
psychology and not officially branded "economists" at all!

So stick to data, you will know more than most branded economists and you
can't go wrong, after all, the data is the data... ;)

~~~
gtani
Thanks for this. So you're recommending econometrics as a start? Is that
Bayesian or Frequentist?

~~~
HSO
I would actually not recommend econometrics as the OP seems to just start out
in this area. My recommendation is: get to know the data, learn what is
available, read the definitions/construction methods, plot it in so many ways,
do simple statistical summaries, for subperiods, for the entire sample,
nothing fancy. One caution though: Try to do so _before_ making up your mind
as to what explains the world, and even more important, try to forget
everything you've already been programmed to read into the data. It's like in
some karate movie, you have to "empty your mind" and let the data come to you,
and if you let it sink in, at some point, you will start to ask questions and
seek your own answers. I think that's a better way than to be presented with
one or two general frameworks and then force fed so many specific models and
examples that invariably one ends up seeing the world and asking the same
questions like "them".

One concrete example is "aggregate demand". It's a concept presented in the
most basic textbooks as a "fact" but it's really an artifact. Fischer Black
claimed that the more he thought about it, the less he understood how one
could distinguish between "aggregate supply" and "aggregate demand", yet
economics is taught like that in every basic textbook I have seen so far.
There are very few "facts" in finance and economics, so for the beginner,
before consulting what others have thought, I would recommend first having an
unadulterated look at the facts before reading explanations or stories.

------
frognibble
My favorite book is "Economics in One Lesson". It's available free online and
in print from major book sellers (see the top search results on the Google).
This book does not represent mainstream economic thought, but that's a good
thing given the track record of mainstream economists in the current crisis.

~~~
nandemo
I love that book.

Another good, "popular" Austrian-school book is _What Has Government Done to
Our Money?_ by Murray Rothbard. _The Theory of Money and Credit_ by Mises is
on same subject but it's more comprehensive, the tone is more academic and is
considerably harder. Both are available online.

<http://mises.org/money.asp>
<http://mises.org/books/Theory_Money_Credit/Contents.aspx>

~~~
SkyMarshal
Just an addendum, lots of good free econ books in pdf format at
<http://mises.org/books/>, including all the Austrian School classics.

~~~
narrator
Looked at that collection. I've read a lot of Austrian stuff and I'd say that
Hayek's elaboration of the trade cycle and the dynamics of international
currencies are the two greatest works of Austrian Economics. They are not the
basics by any means though and are pretty tough going, as hard as reading
books on compiler design.

<http://mises.org/books/monetarynationalism.pdf>

<http://mises.org/books/pricesproduction.pdf>

------
scottjad
If you're the kind of person who reads Diplomacy by Kissinger for an
introduction to geopolitics or the Bible to understand christianity, then I'd
highly recommend Human Action by Ludwig von Mises for a very strong
understanding of economics. One of the best (and largest) books ever written
on economics, you don't have to be of the Austrian school to get a lot out of
it. It lays a strong logical and theoretical foundation and then considers
issues in a very engaging and even entertaining manner for non-economists.

And it's available as a very high quality audiobook for free!

<http://media.mises.org/mp3/audiobooks/mises/HumanAction/>

~~~
hga
Yes, _Human Action_ is big, thick and highly recommended. You can find one or
more earlier and still quite useful print editions on the net (as I understand
it, the subsequent edits weren't heavy).

------
adamcrowe
General and fallacy debunking:

'Economics In One Lesson' by Henry Hazlitt

<http://jim.com/econ>

Land and rent analysis (missing in almost all textbooks):

'The New Road to Serfdom: An Illustrated Guide to the Coming Real Estate
Collapse' by Dr. Michael Hudson

[http://michael-hudson.com/wp-
content/uploads/2010/03/RoadToS...](http://michael-hudson.com/wp-
content/uploads/2010/03/RoadToSerfdom.pdf)

'The Chaos Makers: The Dreamers & The Deceived' by Fred Harrison

[http://renegadeeconomist.com/wp-
content/uploads/2009/04/the-...](http://renegadeeconomist.com/wp-
content/uploads/2009/04/the-chaos-makers.pdf)

------
npp
One option is to browse some major university websites for commonly used
textbooks and pick one that's appropriate for your level (in terms of
math/econ background) and seems interesting. Some common choices are Krugman &
Wells and books by Mankiw. Textbooks are drier than popular books, but they
are clearer and more rigorous, and you have some assurance that any reputable
one will attempt to present a balanced, mainstream view rather than pushing a
personal agenda.

Another option that is a bit more expensive but may be a lot more enjoyable is
getting some DVDs from the Teaching Company. They get what are usually very
good lecturers to give their courses, and

<http://www.teach12.com/ttcx/coursedesclong2.aspx?cid=550>
<http://www.teach12.com/ttcx/coursedesclong2.aspx?cid=5610>

seem to be the kinds of things you're looking for. I haven't watched these,
but maybe worth a shot.

(Regarding some of the other suggestions: blogs are ok, but the more econ-
heavy ones will assume some degree of familiarity with economic concepts, and
will post on random topics in no particular order, so they don't really solve
this problem. Non-mainstream books or famous monographs are also ok at some
point, but as with all such things, it's generally best to at least understand
the basic mainstream stuff first.)

------
roobaron
To grok the subject, it will take a while. Search for a good undergraduate
economics course and follow that. I second Hazlitt "Economics in One Lesson".
But if you truly want to understand this, you will need to start with one book
and then note all the books and theories which come before, going back a long
way 200 years or more. Read or read summaries of those as well. In that way,
you will get a firm foundation and understand how some "new" stuff is just old
stuff with a new name.

------
cbare
Wealth of Nations is a great read, if only to appreciate how much of modern
economics Adam Smith either foreshadowed or invented and how misrepresented
his ideas typically are. There's a certain amount of slogging but it's well
worth the time.

~~~
billswift
_P J O'Rourke On the Wealth of Nations_ does an entertaining and fairly
accurate job of "condensing" it. ISBN 0-8021-4342-3

------
Towle_
"How an Economy Grows and Why It Doesn't" by Irwin Schiff.

[http://www.scribd.com/doc/8009736/Irwin-Schiff-How-an-
Econom...](http://www.scribd.com/doc/8009736/Irwin-Schiff-How-an-Economy-
Grows-and-Why-It-Doesnt)

~~~
Shmulkey
The author is currently doing time for refusing to pay income taxes. A crank,
IMHO.

~~~
dpatru
Throughout history people have refused to submit to immoral government
controls and have suffered the consequences. They are to be admired by people
who aspire to be free.

The income tax is an assertion that government owns the work of its citizens
and has a right to take as much of it as it wants. The majority of citizens
accept this claim because they don't want to be fined, imprisoned, or
otherwise mistreated.

Taxpayers are slaves on the government plantation, forced to work for the
government. When a slave protests and is punished, he should not be called a
crank by the other slaves.

~~~
mkramlich
You are aware that government provides services in exchange for those taxes,
right?

~~~
dpatru
Among the "services" that (American) government provides: Wars in Iraq and
Afghanistan (countries that have not attacked us), military spending equal to
what the rest of the world combined spends, social security and medicare
(ponzi schemes in which workers today are forced to finance the retirement and
healthcare of the elderly with no realistic expectation that their own
retirement and healthcare will be similarly provided for), and of course law
enforcement and prisons (a large part of which is devoted to punishing non-
violent drug "crimes," i.e., people using illegal drugs themselves or suppling
them to those who want to buy them).

Providing services does not justify the income tax, even if those services
were useful or moral, which they are generally not (see above). The mafia and
private slave owners also provide services (protection and employment) but
this does not justify their robbery.

The sixteenth amendment to the American Constitution was only ratified in
1913. Somehow America survived until then without a general income tax.

------
riffer
<http://www.marginalrevolution.com> is your best bet

Through posts it links to all of the other good econ blogs: Krugman, Mankiw,
as well as good articles in FT, NYTimes, Economist, etc.

Economic texts are notoriously boring, blogs are a good solution to that
problem

------
te_platt
Basic Economics by Thomas Sowell

~~~
mkramlich
I've seen a few recommendations for that in this discussion. Never read any
books by him, but in my experience reading newspapers over the years, reading
oped articles by him, it seemed clear to me where his political affiliation
lies, at least with respect to the main two US political parties. Did you see
any of his political slant in this book? Or did he seem to stay
neutral/impartial?

~~~
srveit
The "slant" in this book is that he is pro-free market and anti-central
planning. He states that the free market is the most efficient way to allocate
scarce resources. The book explains why this is so with many varied examples.

~~~
mkramlich
does he address Tragedy of the Commons? monopoly? uneven distribution of
information and power? aristocracy (feudal or modern)? just curious, because
those are also economic forces in the real world, but they tend to push back
against the notion that a totally free unregulated market w/o govt
intervention is best.

Regardless, I'll definitely check it out. Looking at the 1st few pages on
Amazon and he seems to have good writing skills. Do not like the Hoover
Institution connection though.

------
thinkdifferent
Everybody is suggesting some Austrian Economics books. I don't think it's a
good idea to start with something which is not mainstream in the academic
world.

I've read something about austrian economic, and it sounded good to me, but I
know it's so easy to foolish a layman in any field with almost anything.

If most academics today at top univesities and most nobel prize are not
followers of the austrian school there may be good reasons.

Better to start with the current state of the art and then read about less
popular schools.

~~~
amh
I find your comment ironic given your username.

At one time, bloodletting was mainstream in the medical world.

~~~
thinkdifferent
:)

Yes, it's quite ironic. I'm not saying Austrian Economics is wrong, I don't
know enough to make such a claim.

I'm just saying that for a complete beginner it's better to start with what is
believed to be correct by most professionals in the field.

Then of course it's great to study Austrian Economics.

I think that starting with the general consensus among professionals is the
way to go in any subject. I know economics is heavily politcs influenced and
politics can trump over truth, but still...

To think different first you have to know mainstream and if you see something
wrong in it you can criticize.

Otherwise is just ignorance.

------
NeilCJames
For an overview of mainstream modern econ, if you read nothing else, read
Naked Economics by Charles Wheelan. For a good introduction to the major
economic schools of thought check out Economics as Religion by Robert Nelson
(he has written a new one on the same subject that I haven't yet read). To get
into behavioral economics, I'd recommend Predictably Irrational by Dan Ariely
and The Winner's Curse by Richard Thaler. Tread carefully, there is a lot of
polemic posing as economics on bookstore shelves.

------
splat
University Economics by Armen Alchian is quite a good introductory textbook to
the basics of mainstream economics. It has a strong emphasis on understanding
economic concepts intuitively which I like.

If you're looking for a more mathematical introduction, McAfee's open source
book is a pretty good introduction to microeconomics and is available for free
at <http://www.introecon.com/>

------
culturestate
Thanks for the recommendations, everyone. I don't have a math-heavy
background, so Econ has always seemed formidable and daunting to study. I'm
sensitive to the political agendas of name-brand economists and theories and
just never really knew where to begin.

One text that hasn't come up here, but has in my offline discussions, is
Foundations Of Economics: A Beginner's Companion by Yanis Varoufakis. Any
opinions on that?

------
drallison
Economics is a bit like theology. You read it to get exposed to the ideas,
learn about other people's beliefs, and be amazed by the beautifully argued
but experimentally unsupported theories. I liked Eric Beinhocker, Origin of
Wealth: Evolution, Complexity, and the Radical Remaking of Economics.

------
Ratufa
Bookwise, some places to start for general overviews of economics are:

"New Ideas from Dead Economists" by Todd Buchholtz

"Naked Economics" by Charles Wheelan

Blogwise:

<http://www.marginalrevolution.com/> is entertaining and filled with good
insights from a libertarian point of view.

<http://economistsview.typepad.com/> has more centrist/liberal views on a
variety of economic issues and has a good set of links to daily economic-
related blog posts from various points of view.

The above blogs have enough links to other blogs to get you started, and they
will give you different points of view on current topics.

------
techiferous
The Undercover Economist is quite a fun read and very accessible to the
layperson: [http://www.amazon.com/Undercover-Economist-Exposing-Poor-
Dec...](http://www.amazon.com/Undercover-Economist-Exposing-Poor-
Decent/dp/0195189779)

~~~
hardik
I agree, it lays out many economic concepts in easily understandable form for
persons new to the subject.

------
libertyhacker
For what it's worth, the Campaign for Liberty has compiled a list of videos
and books on economics at
<http://www.campaignforliberty.com/edu/economics.php>

------
samratjp
If you are concerned about learning about how we got into all this mess and
have 10 minutes to spare - this would be a great primer
<http://www.crisisofcredit.com/>

------
amh
Along with the excellent recommendations here, I would add "The Worldly
Philosophers" by Heilbroner ([http://www.amazon.com/Worldly-Philosophers-
Lives-Economic-Th...](http://www.amazon.com/Worldly-Philosophers-Lives-
Economic-Thinkers/dp/068486214X)) for a slightly different angle. It covers a
wide range of famous economists and describes the high points of their
theories along with some biographical detail, in a very engaging style. It's
the economics version of "Men Of Mathematics", which is also a fascinating
book.

------
callmeed
Naked Economics by Wheelan

[http://www.amazon.com/Naked-Economics-Undressing-Dismal-
Scie...](http://www.amazon.com/Naked-Economics-Undressing-Dismal-
Science/dp/0393049825)

~~~
ebun
I second this rec. The author breaks down economics with common language and
regular, everyday topics (no charts, graphs or formulas).

------
rwl
I learned a heck of a lot from reading John Kenneth Galbraith's books. In
particular, _The Affluent Society_ , _The New Industrial State_ , and _Money:
Whence it Came, Where it Went_

~~~
rwl
Really? I get downvoted for providing an alternative that the Milton Friedman
crowd doesn't like?

~~~
mkramlich
I tried to correct that with some upvotes. :)

Unfortunately HN (and other sites, not unique to this one) doesn't have a way
to enforce distinctions between down-voting due to:

1\. respectful disagreement 2\. writer is crackpot 3\. writer is troll 4\.
voter himself is being juvenile 5\. typo 6\. cosmic rays 7\. cat sat on
keyboard

Actually maybe there's a startup idea in there: deliver a product/service/tech
that DOES enable reliable disambiguation between those cases!

~~~
rwl
Heh, I was about to say that Slashdot already does something like this, but I
am pretty sure they aren't covering cases 6 and 7. Cosmic rays and keyboard
cats...now there's a startup problem I can sink my teeth into. Thanks. :)

------
chrismealy
"Origin of Wealth: Evolution, Complexity, and the Radical Remaking of
Economics" is really great Hacker News-ish book about economics. It's the only
non-technical book that gets into agent-based computational economics. There's
some unfortunate business strategy waffle in the middle but otherwise it's
fantastic.

Here's a review of it by the great Herb Gintis:
<http://www.amazon.com/review/R26IO7AY7JHS8C/>

------
grandalf
Capitalism and Freedom by Milton Friedman...

------
kiba
Whoa what with the hacker love for Austrian economics?

It like everyone take after Eric S. Raymond, the hacker who extends
Austrian(Hayekian to be more exact) economics to the field of software
development in his _The Cathedral and the Bazaar_.

~~~
mkramlich
the strong Austrian current you see here is probably due to 2 factors:

1\. libertarianism & anarcho-capitalism are fairly popular among programmers

2\. the "markets good, government bad" belief is pretty common among business
fans

personally I think there's both good and bad, wisdom and horrible flaws, in
both of those belief areas

------
RockyMcNuts
The Worldly Philosophers, by Robert Heilbroner -
[http://www.amazon.com/Worldly-Philosophers-Lives-Economic-
Th...](http://www.amazon.com/Worldly-Philosophers-Lives-Economic-
Thinkers/dp/068486214X)

------
pragmatic
I might recommend some behavioral finance:
<http://en.wikipedia.org/wiki/Behavioral_economics>. _Predictably Irrational_
is good.

------
ochekurishvili
Gregory Mankiw has published a numerous excellent books.

<http://en.wikipedia.org/wiki/N._Gregory_Mankiw>

------
mkramlich
not books, but would anyone here recommend that he try the lecture videos at
KhanAcademy.org? Or entries in Wikipedia?

~~~
hga
Economics is so fantastically politicized---in a more honest age, it was
called political economy---you'd have to apply your maximum filters for
Wikipedia to be of any use. Probably not the best choice for a beginner.

~~~
mkramlich
Agreed.

I think it is because unlike with the real/natural sciences, in Economics it's
very easy and common to commit fallacies like cherry picking and making
deductions based on incomplete information or emotion-based assumptions. Folks
that grew up with a silver spoon in their mouth (relatively speaking) are more
likely to be anti-government/pro-market, and folks who want to make a living
by running a business tend to not like taxes and not like external regulation
of their activities, even when their activities would cause harm or impose
external costs on their fellow citizens (pollution, etc.).

Actually I'd argue that Wikipedia may be a more neutral resource than many
books because with books there can at times be only 1 person who blesses it
with authority whereas most economics articles are vetted by the community and
endlessly critiqued and debated over by editors, with both Pro and Con
factions wrestling over the fairness and objectivity of each sentence. A book
can often just be an attack piece or propaganda tool.

~~~
hga
The problem is that Wikipedia articles will have "random" biases and
omissions. When you read a book by one author it's at least likely to be
consistent in its bias.

E.g. the latest example I've found of this, which I grant you is relatively
obscure compared to more prominent and no doubt well fought over articles, is
the one on the Washington Public Power Supply System (WPPSS), which had one of
the largest Chapter 9 bankruptcies in history:
[http://en.wikipedia.org/wiki/Washington_Public_Power_Supply_...](http://en.wikipedia.org/wiki/Washington_Public_Power_Supply_System)

All that financial history has been airbrushed out; unless you notice the
categories at the bottom, check out the Further reading or the right External
Link or sample the article's history you'd have no idea about what was a
rather major bit of economic history, rated as one of the three both large and
notable Chapter 9 bankruptcies:
[http://en.wikipedia.org/wiki/Chapter_9,_Title_11,_United_Sta...](http://en.wikipedia.org/wiki/Chapter_9,_Title_11,_United_States_Code#Notable_Chapter_9_bankruptcies)

------
xaverius
'Economics' by Paul Samuelson

~~~
hga
It's a "classic", at one time _the_ classic, but I don't have much respect for
an author who's glowing portrayals of the wonders of the Soviet economy were
over the years quietly modified and then dropped as the truth became too well
known to be ignored.

~~~
mkramlich
Agreed on both your points. (His college textbook is probably the thickest in
my economics collection.) I lost a lot of respect for him over the Soviet era.
It undermines his credibility on many other issues. Economics is already a
soft science (compared to physics, etc.) so having trust in the authority of
it's pole bearers is pretty critical.

~~~
hga
Exhibit number N on why the neo-Keynesians don't get much respect today (well,
not counting those they empower).

And it was worse than I'd remembered when I composed the above; as Wikipedia
says, " _In Samuelson's 1973 edition of his famous textbook, he laid forth the
prediction that the Soviet Union would catch up to the United States in per
capita income by 1990, and almost certainly would by 2015 because of its
superior economic system. Subsequent editions of his textbook would later push
the date of his prediction back farther until the Soviet Union ultimately
collapsed._ "

------
maeon3
Robert Shiller, Long time Professor of Yale University does economics the best
justice I've ever heard.

[http://oyc.yale.edu/economics/financial-
markets/content/down...](http://oyc.yale.edu/economics/financial-
markets/content/downloads)

