Summary: 50 Economics Classics By Tom Butler-Bowdon
Summary: 50 Economics Classics By Tom Butler-Bowdon

Summary: 50 Economics Classics By Tom Butler-Bowdon

1 Liaquat Ahamed – Lords of Finance (2009)

Fixed ideas in economics can have disastrous results. The world hung onto the gold standard long after it had stopped being a means to create stability and growth.

2 William J. Baumol – The Microtheory of Innovative Entrepreneurship (2010)

Economic growth rests on the development and implementation of new ideas, so it is surprising the extent to which entrepreneurship has been ignored by economics.

3 Gary Becker – Human Capital (1964)

Though it carries some uncertainties, an investment in ourselves pays the greatest dividends.

4 John C. Bogle – The Little Book of Common Sense Investing (2007)

If you invest in the stock market, put your money in a fund that automatically owns a little bit of every company listed. Over time, it is a sure and almost worry-free way to accumulate wealth.

5 Eric Brynjolfsson & Andrew McAfee – The Second Machine Age (2014)

As the stock of human knowledge grows, so does our ability to create new wealth, but we can’t allow people to be left out of the benefits of technology and innovation.

6 Ha-Joon Chang – 23 Things They Don’t Tell You About Capitalism (2011)

The capitalism most widely practiced today is an ideological free market variant; compared to the post-Keynesian capitalism of the 1950s–1970s, it is a failure.

7 Ronald Coase – The Firm, the Market, and the Law (1988)

To understand economics, you must understand the role that transaction costs play in shaping firms, markets, and institutions.

8 Diane Coyle – GDP: A Brief But Affectionate History (2014)

Economic growth is not everything, but it supports the existence of many highly-valued social goods, and so it is crucial that we measure it.

9 Peter Drucker – Innovation and Entrepreneurship (1985)

Management of entrepreneurship and innovation is as important to economics as traditional factors such as technology, capital, labor, and land.

10 Niall Ferguson – The Ascent of Money (2008)

Finance has been the crucial ladder in the making of the modern world. All ladders are precarious, but without them it is hard to build anything.

11 Milton Friedman – Capitalism and Freedom (1962)

The free market, not government, ensures protection of individual rights and standards of quality, and delivers extraordinary prosperity.

12 J. K. Galbraith – The Great Crash 1929 (1955)

Rather than championing financial markets, government must make sure that speculative frenzies do not warp or ruin the real economy.

13 Henry George – Progress and Poverty (1879)

When land, rather than people and production, is taxed, prosperity increases and inequality decreases.

14 Robert J. Gordon – The Rise and Fall of American Growth (2016)

The last 150 years have seen a cavalcade of progress unlike any in human history, but most of the big gains in living standards have already happened.

15 Benjamin Graham – The Intelligent Investor (1949)

In stock investing, consider yourself part owner of a company, not a trader.

16 Friedrich Hayek – The Use of Knowledge in Society (1945)

Centralization of knowledge is good in theory, but in practice economies are most efficient when millions of people act independently using the information available to them through prices.

17 Albert O. Hirschman – Exit, Voice, and Loyalty (1970)

“Exit” (moving to a competitor) has traditionally been the domain of economics, and “voice” (protest) the domain of politics. To stay healthy and relevant, firms, institutions, and states must allow for and learn from both strategies.

18 Jane Jacobs – The Economy of Cities (1968)

Cities have always been the main driver of development and wealth, and will be even more important in the future.

19 John Maynard Keynes – The General Theory of Employment, Interest, and Money (1936)

Elegant models of how economies work are often wrong. Markets are not self-correcting, but need constant intervention and management to ensure high consumer demand, investment, and employment.

20 Naomi Klein – The Shock Doctrine (2007)

If not checked by democracy, capitalism can become a coercive ideology.

21 Paul Krugman – The Conscience of a Liberal (2007)

Growing inequality is not simply the result of technological change or globalization, but is the product of political values and decisions which can be reversed.

22 Steven D. Levitt & Stephen J. Dubner – Freakonomics (2005)

We want a world based on morality; we have a world based on incentives.

23 Michael Lewis – The Big Short (2010)

Despite their “masters of the universe” image, investing professionals often fail to understand the risk of the assets they trade in, with awful social consequences.

24 Deirdre McCloskey – Bourgeois Equality (2016)

Capitalism on its own did not create the prosperity of the modern world, but a new philosophy of egalitarian liberalism which unleashed the potential of unprivileged people.

25 Thomas Malthus – An Essay on the Principle of Population (1798)

Restrictions on population growth are crucial for prosperity. We let it get out of control at our peril.

26 Alfred Marshall – Principles of Economics (1890)

The purpose of economics is not simply to study wealth, but to study man. Habits of earning, saving, and investing provide the data to do so.

27 Karl Marx – Capital (1867)

When an economic system treats workers as mere objects, it is setting itself up for revolution.

28 Hyman Minsky – Stabilizing an Unstable Economy (1986)

Competitive market economies, it is held, naturally create efficiency and stability. Capitalism’s booms, busts, and financial crises, which skew long-term investment

29 Ludwig von Mises – Human Action (1949)

The triumph of the market economy over traditional modes of political economy was the most important event in history, allowing the power of individuals to be unleashed.

30 Dambisa Moyo – Dead Aid (2010)

Aid is like a drug, and as with any drug, pushers and addicts find it hard to kick the habit.

31 Elinor Ostrom – Governing the Commons (1990)

Natural resources like water and forests do not necessarily require government or laws to be well-run. Stakeholders with a long-term interest in the resource can police each other.

32 Thomas Piketty – Capital in the Twenty-First Century (2014)

Unless governments introduce new forms of taxation and ways of increasing social mobility, we are heading for levels of income inequality not seen since the nineteenth century—and possible political upheaval.

33 Karl Polanyi – The Great Transformation (1944)

“Free” markets, far from being a natural force, are very much a human invention which must serve the interests of the larger society and humanity, not vice versa.

34 Michael E. Porter – The Competitive Advantage of Nations (1990)

The best thing that governments can do to increase national economic advantage is to ensure there is lively competition in local industries, which pushes companies to create world-beating products and services that can be exported.

35 Ayn Rand – Capitalism: The Unknown Ideal (1966)

In capitalism, wealth is created by free, individual minds with no coercion involved. This makes it a more moral system of political economy.

36 David Ricardo – Principles of Political Economy and Taxation (1817)

Trade is the great facilitator of world prosperity, because it allows participating countries to make the most of their resources, people and skills.

37 Dani Rodrik – The Globalization Paradox (2011)

Globalization involves a deep contradiction between the national focus of governments and the global nature of trade and finance.

38 Paul Samuelson & William Nordhaus – Economics (1948)

Markets don’t always deliver prosperity, and government interventions are often flawed. To be really useful, economics must be built on common sense, not ideology.

39 E. F. Schumacher – Small Is Beautiful (1973)

Mass production and consumption is not the only way of organizing the world economy.

40 Joseph Schumpeter – Capitalism, Socialism, and Democracy (1942)

Capitalism only works because it is in a state of constant flux. Instability is the price we pay for wealth-generating renewal and reinvention.

41 Thomas C. Schelling – Micromotives and Macrobehavior (1978)

Individuals can make decisions that are rational for them, but which lead to negative outcomes for society.

42 Amartya Sen – Poverty and Famines (1981)

Even more important than the production of enough food to feed the world’s population, is ensuring that people are entitled to food despite changing conditions.

43 Robert J. Shiller – Irrational Exuberance (2000)

Market levels are in theory based on fundamental asset values, but their unexpected surges, swings and falls suggest human psychology is the driver.

44 Julian Simon – The Ultimate Resource 2 (1996)

Standards of living keep rising even with a larger population. This suggests that arguments about “scarcity” lack foundation.

45 Adam Smith – The Wealth of Nations (1776)

The wealth of a nation is that of its people, not its government, and that wealth is achieved through the division of their labor and the ever-greater specialization of their skills. The foundation of all future prosperity is current savings.

46 Hernando de Soto – The Mystery of Capital (2000)

Assets do not become capital until their value can be fixed and made transparent to a wide market. To really advance and fulfill their potential, nations need integrated property systems.

47 Joseph Stiglitz – The Euro (2016)

Currencies are meant to create independence and facilitate growth. For many European nations, the euro has achieved the opposite.

48 Richard Thaler – Misbehaving: The Making of Behavioral Economics (2015)

“Homo economicus,” or rational man, is quite a different species to homo sapiens, which often seems to make decisions that seem to go against its own interests.

49 Thorstein Veblen – The Theory of the Leisure Class (1899)

Societies are wholly driven by emulation and the need for status. The more resources we have the means to consume, the greater our social esteem.

50 Max Weber – The Protestant Ethic and the Spirit of Capitalism (1904)

The spirit of capitalism is not greed and consumption, but the creation of order and the best use of resources. For those with a “calling”, there is no problem in reconciling the spiritual and economic aspects of life.