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This is something that people have asked me in the past. Of course my view is that basic introductory economics should be taught as a core subject in school. I had mandatory music, drama, needlework, metalwork, woodwork and religious education, all of which strike me as less important parts of education than understanding how people behave and interact. But that's a subjective opinion, and this is an objective educational post.

So, where to begin?

Where I began was my A-level textbook, 'Economics' by Begg, Fischer & Dornbusch. It's now in its 11th edition (I've got the 2nd edition) and is the standard text for a lot of university Economics degrees. It worked for me, but it's one of those things where the only reason you'd do the A-level was if you wanted to go on and do the degree. So it's very dry, it's very maths-based and it's full of curves. ("My god...it's full of...curves", as Bowman doesn't say in 2001.) It's a dull and difficult read. It's very long, very heavy and very expensive. So I wouldn't recommend it to someone who has no intention of doing an Economics degree but just wants to learn a bit more about how the world works.

Other university-level textbooks have the same problem for the newbie or the person coming from other fields - too dry, too much maths, too many curves. So, I'd avoid them.

What about going back to the beginning? Adam Smith's 'The Wealth of Nations' is surprisingly readable for a book that is as old as the United States. It's nicely organised and will seem more modern to many readers than it really is. If you were going to start with Adam Smith and then move on to other great economics thinkers, then fine, but this is not the quick way to get a grasp of economics. You have to bear in mind that The Wealth of Nations was simply the beginning. (You could argue that there are earlier works which form part of the discipline, but you have to start somewhere, and Smith advanced the study so much that he's a decent choice for Economist Zero.) So, I wouldn't recommend The Wealth of Nations as an introduction to Economics.

So where would I start? Well, first of all, I'd suggest dipping into one of the many mainstream books that show you how to think like an economist. There are lots of these. They follow a standard pattern - each chapter looks at some phenomenon of the modern world, and then explains why that phenomenon occurs the way it does using microeconomics. Like I said, there are lots of them about - 'Everlasting Light Bulbs - How Economics Illuminates the World' by John Kay, Robert H Frank's 'The Economic Naturalist - Why Economics Explains Almost Everything' and Steven E. Landsburg's 'The Armchair Economist - Economics and Everyday Life' are all very readable, lightweight paperbacks that will teach you how to think about everyday phenomena like prices and wages and supply and demand and correlation and causation in the way that an economist would. My favourite books in this genre are Tim Harford's 'The Undercover Economist' and the most famous of these books - 'Freakonomics - A Rogue Economist Explores the Hidden Side of Everything', by Steven Levitt and Stephen Dubner. (I'm not sure why Freakanomics is by a "rogue" economist - the economics in the anecdotes is pretty mainstream really, only the anecdotes themselves are unusual.) Most of the examples in Freakonomics are American, whereas The Undercover Economist is mostly British. I would highly recommend either (the Freakanomics sequel 'Superfreakonomics' isn't bad either).

Those books won't help you in understanding issues you see on the news though, so they might not ultimately be what you're looking for. I still think they're a very good place to start, and if you can understand how economists think on issues like abortion and crime rates or why women wear high heels, then you're well on the way to understanding the pros and cons of fixed exchange rates or minimum wages. A very popular answer to my original question would be Henry Hazlitt's 1946 'Economics in One Lesson', which is well-written, delightfully short, full of common sense and free. (Well, as a famous economist almost once said, "there's no such thing as a free economics textbook", but you get the idea...) Again, I highly recommend 'Economics in One Lesson', but not quite as unreservedly as some of its fans would.

You see there is a problem with Hazlitt in that he was an Austrian. I don't mean that he was from Austria, I mean that Hazlitt was a member of the 'Austrian School' of economists. And one thing that the Austrians are really not big on is macroeconomics. Austrians tend to see most macro-effects in the economy as deriving from micro-factors. So if you read just 'Economics in One Lesson', you really aren't going to learn much about macroeconomics. And I think if you want to have a view on, let's say, inflation or interest rates or exchange rate policy or quantitative easing, then you will need some macroeconomics.

The trouble is that there aren't too many books out there that are good introductions to macroeconomics for the newbie that aren't tainted by the views of the author (often their political views as well as their views on economics) and thus are rather more opinion-based than you would like as an introduction. However, I reckon I have a good couple of recommendations for you.

Once you've read something like Freakonomics or The Undercover Economist, and maybe after you've read Economics in one Lesson, you need a) some appreciation of how economics developed and b) different views on macroeconomics. Here's what you need - The Cartoon Introduction to Economics - Volume One: Microeconomics and Volume Two: Macroeconomics, by Grady Klein and Yoram Bauman ("The World's Only Stand-up Economist"). Really easy to read and understand, balanced in their coverage of hotly debated issues. These two brilliant books deserve to be as famous as Economics in One Lesson or Freakonomics.

So there you go, there's my reading list:

  • The Undercover Economist or Freakonomics

  • Economics in One Lesson

  • The Cartoon Introduction to Economics

Read those (and my blog posts of course) and you'll be very well informed about Economics.


( 9 comments — Leave a comment )
Mar. 21st, 2016 11:40 pm (UTC)
Freakonomics suffers from my knowing that one of their cases is wrong. It's the "abortion prevents crime" which suffers from the fact that you can commit crime your entire life but can only be aborted in a nine month window. It argues from the general crime rate, whereas what you should look at is the crime rate by cohort.

Unfortunately for their argument, juvenile crime exploded in the culled cohorts; the big decline was driven first by the older cohorts who weren't affected, and then by the younger cohorts being locked in prison.
Mar. 22nd, 2016 12:57 am (UTC)
Nice. I agree with you with regards to the half of those I have read, so I'll check out the others. :-)

There's one on the Federal Reserve that is illuminating in the U.S., something about the monster from Jekyll Island.

One of my favorite books about money as just simply money is "Frozen Desire: the meaning of money" by James Buchan. If you liked those you'll probably like this.

Edited at 2016-03-22 12:58 am (UTC)
Mar. 22nd, 2016 09:09 am (UTC)
That is a helpful list which I will share with my mother who is increasingly interested in economics.

She retired as a doctor a few years ago and has been using the intellectual energy freed up to find out about all the things she didn't know she didn't know.
Mar. 22nd, 2016 09:29 am (UTC)
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Mar. 22nd, 2016 12:00 pm (UTC)
Interesting Links for 22-03-2016
User andrewducker referenced to your post from Interesting Links for 22-03-2016 saying: [...] ) What books would serve as a good introduction to economics for a complete beginner? [...]
Mar. 22nd, 2016 04:58 pm (UTC)
Tim Harford has written a follow-up, "The Undercover Economist Strikes Back", which is about macroeconomics.
Mar. 22nd, 2016 08:14 pm (UTC)
You know, I'd spotted that but hadn't twigged it dealt with macro. I figured it was more of the same in the way that Superfreakonomics continues Freakonomics. I'll add it to my Amazon wish list!
Jun. 6th, 2016 05:35 pm (UTC)
Thank you for this post. I added the Hazlitt and Cartoon Introductions to my reading list at the time, and finally got round to them in the last fortnight. I think it turns out that I'm a bit less of an absolute beginner than I thought, but they were a useful recap/consolidation of stuff that I'd learned in the dim and distant past.

Do you have any thoughts on what might be a good next step (other than reading your series of posts, which I did this afternoon). I think I'm particularly interested in a good, in-depth, and reasonably even-handed comparison of Keynesian vs Austrian views. I've got a maths background, so curves are okay.
Jun. 7th, 2016 08:48 am (UTC)

The next step question is harder, especially if we're talking macro. Thinking about macro as an Austrian versus Keynesian debate is probably the wrong way to start though. This is certainly how many Austrians seem to think - that it's them versus the rest and that all of the rest are Keynesians. However, that ignores other important schools of thought. Most mainstream macroeconomists, especially the ones running the world's major economies for the last three decades or so, would be neither Austrian or Keynesian*.

As to a book recommendation, well as I said that's hard. Once you get past the introductory level, I find that writers don't try to conceal their personal opinions, so you'll see examples of them tweaking the facts to fit their chosen model (I remember observing this at university).

On the other hand, the fact that you're not averse to the odd curve, means that university textbooks won't be a problem. The macro sections of Begg, Dornbusch and Fischer (see above) would be a good place to start, and after that there's 'Macroeconomics' by Dornbusch, Fischer and Startz. Those both try to be fairly neutral and cover not just both sides of the debate but both sides' theories. After that, you're better off sticking to economists' blogs.

* Well actually in a loose sense, they're "all Keynesian" (Milton Friedman: "We are all Keynesian now", meaning that everyone except the Austrians saw a role for government in actively managing the economy, they just differed on how effective the different policy instruments would be.
( 9 comments — Leave a comment )