“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.” – John Maynard Keynes
I live in a part of the world where economics is considered ‘dry’ and boring. I blame it on the textbooks that are routinely prescribed in initiating beginners into the field. I believe that we can relate better to issues than arcane theories. In line with that thinking, this list brings together books with fascinating issues, ideas and policies that will give the reader an inkling of what the field is about. They do not deal with the ‘fundamentals’ of economics as it is understood in the academia, but will give a flavour of what it can be. Hopefully these will prepare you to appreciate textbooks when you get to read them.
Age of uncertainty by John Kenneth Galbraith
Age of uncertainty is a book about some of the greatest thinkers and events of the last few centuries. Galbraith provides an introduction to the ideas of Adam Smith, Spencer, Marx, Keynes and others who have had profound influence on the field at different points of time. This is interlaced with economic history, primarily of the western world, in an age of uncertainty. The book was written in the process of producing a television show for BBC with the same name. It is clearly intended for the mass audience and is accessible to any reader. It is one of those rare books that is accessible to a school child and yet profound to any adult. Galbraith’s wit, beautiful illustrations and excellent editing make the book a pleasure to read and to read again.
India: Development and Participation by Amartya Sen and Jean Drèze
This book to me represents the best in the tradition of development economics. The authors look some of the most pressing issues relating to the developing world such as education, hunger, health, democracy, and conflicts. The first chapter presents their approach to development and it is followed by one chapter on each of the above issues. The authors present competing ideas as well as their own backed by detailed references and statistical appendix. Sen and Drèze are highly sophisticated thinkers whose understanding of development transcends the narrowly “economic” understanding that plagues development economics today.
This book too is intended for the lay audience but is a lot heavier reading than Age of uncertainty. But for anyone who is interested in economics with an eye on development issues, this book is a must read.
Freakonomics by Steven Levitt and Stephen Dunbar
One of the most fascinating aspects of economics is its meticulous attention to numbers. Statistics in the social world presents many challenges. Freakonomics presents a series of studies that illustrate these challenges and the cleaver methods that economists adopt to surmount them. The book is a partnership between a Chicago school economist and a New York Times journalist, and thus combines rigour with great writing. This is a different genre on the whole compared to the other books in this list, but is well worth the read for it illustrates some of the best elements of economics.[Note: I have serious differences with the analysis and with the theories that underlie the book. That said, it has its strong points and is fun to read]
Wonders and flaws of intuitive thinking: Daniel Kahneman’s commencement talk at Princeton
Kahneman is a psychologist who got a Nobel prize in economics. Mainstream economics makes impossible demands in the reasoning skills of people (that underlies choice, and thus is fundamental to how markets work). In this one-hour talk at Princeton he challenges some conventional ideas in mainstream economics using a survey he did with the audience. Kahneman illustrates how simple experiments can be used to deliver powerful ideas.
Kahneman deals briefly with how these ideas relate to behavioural economics and to public policy. In this lecture, he does not talk at length about how these ideas relate to economics. But if you are curious, there is a lot of materials around to establish the link for you. Kahneman is a great speaker and this talk is certain to be entertaining. I strongly recommend that you watch it.