Over the weekend, I was browsing in the Huntington Book Revue. I stumbled across a book that Michael Lewis had edited, called The Real Price of Everything: Rediscovering the Six Classics of Economics.
Since Lewis has written 3 of my favorite finance/market related books — Liar’s Poker, The New New Thing, and Moneyball — I though it was worth perusing.
The idea is simple: these (I count five) classics of economic literature all gathered in one place. One minor quibble is that I am not sure I understand what the 6th classic is.
The big five here are:
1776: The Wealth of Nations by Adam Smith
1798: An Essay on the Principle of Population by Thomas Malthus
1817: Principles of Political Economy and Taxation by David Ricardo
1899: The Theory of the Leisure Class: An Economic Study of Institutions by Thorstein Veblen
1936: The General Theory of Employment, Interest, and Money by John Maynard Keynes
The Wealth of Nations is about half of the 1,472 pages here. My Amazon favorite review: "At the very least you will have a really big book on your shelf to impress your friends."
The General Theory is for those fluent in mathematics and quantitative thinking (calculus, statistics).
Those classics are online at the Library of Liberty:
http://oll.libertyfund.org/index.php?option=com_staticxt&staticfile=show.php%3Fcollection=42&Itemid=27
One of the fun things about every great work in economics is that you don’t really have to be an economist to understand it. I would have added “The Affluent Society” to that list and not only self-servingly because it proves my point.
Economics is not about money. Money is about economics. One can learn much about what motivates individuals and groups without crunching numbers.
RE: Jesse Eisinger post…just my thoughts…ok so there are alot of smart people here…Why not give 5 concrete things the authorities should do..instead of a continued barrage of blame, arrogance and those guys are so stupid type comments…and think of what the ramifications of those concrete suggestions would be? ..so for example ..raise rates to 5% ..protect the dollar slow/stop inflation…ok what happens to the rest of the economy …what about oil?… Does that handle supply issues? Are there supply issues …what about taking leverage away from all speculators(non-user Amaranth types) ..ect ect..this forum might be even more interesting to discuss proactive solutions and the ramifications of these as opposed to a venting mechanism
Murray Rothbard’s Man, Economy, and State
http://www.mises.org/rothbard/mes.asp
You’ll find it gives a much better explanation of our current economic situation than any of the others.
How did you miss/ignore Ludwig von Mises HUMAN ACTION?
If anybody explained the happenings over the past 6, 10,20,37, 60 years, it was the Austrian School and von Mises. The FINANCIAL TIMES has done an excelant job in anticipating the problems you discuss in detail at the same time you do or earlier. THe FT perspective seems very cognizant of the Austrian view, as do you. Not to mention the Austuraian von Ises in the top 5 is puzzling to me. You agree with him more than any of the your top 5!”
Hey, Barry. I like Michael Lewis as much as the next guy, but this repackaging of five classics under Lewis’s name is a scam. All five are in the public domain, and Lewis’s only contribution to the volume is a little introductory material. Plus, chances of anyone wading through all five of these dry economic texts is about as good as someone reading all of Proust. If you’re looking for the “Cliff Notes” version — and an enjoyable read to boot — try Robert Heilbroner’s The Wordly Philosphers. You can still find the Simon and Schuster trade paper edition on Amazon.
Lewis was perhaps thinking of placing Capital: A Critique of Political Economy between Ricardo and Veblen but found this impossible?
Whatever the negative emotive power, ideologies and counter-ideologies, which have been attached, I would recommend a reading of all three volumes as I (production) and II (circulation) are brought together in Vol III (process as a whole, including credit and fictitious capital).
Barry, you forgot Das Kapital, by Karl Marx.
I had to read it during the years of my Catholic High School. I’m sure that american High School students too.
MitchN:
If you want the clift-note version, check out Todd Buchholz’ New Ideas from Dead Economists
The sixth is The New Industrial State. Without that, a reader is hopeless to understand modern developments. Apparently, it’s not in the book. I’ll chalk that up to an unfortunate oversight.
“The New Industrial State”? Oh dear, as much a I like John Kenneth Galbraith, the overall quality of the list just dropped.
Well if we throw in “The New Industrial State”, I’ve read two of these in whole, and parts of two others. If I can judge by that amount, these books constitutue pretty heavy going. And with the exception of Keynes’ book there’s not very much mathematics to be found. For that matter, Keynes’ mathematics was easier to grasp than _his English_. The word “Baroque” doesn’t do justice to the way he expresses himself.
I finally gave up on “The General Theory of Employment, etc” to read “Essays in Persuasion”. This lays out a grand (as it were) picture of the financial entaglments that resulted for from WWI. The center will not hold. A set of global financial imbalances that (in relative terms) dwarf those of today? (and if today competes, we’re _really_ in trouble).
Anyway, if Lewis can do justice in communicating what’s of worth in these books, that’s of great worth.
Oh and the “invisible hand” never appears once in the “Wealth of Nations” (that’s the other one I read in whole).
Now if only someone could point me to Ricardo’s argument that trade benefits the _importer_ more than the _exporter_, I’d be much obliged. Would sure stand conventional wisdom on its head.
That these books are open-sourced or whatever completely misses the point.
Now for a refreshing (if slightly bolshi) take on one small part of finance, Wall St, I quite enjoyed this:
http://www.amazon.com/Wall-Street-How-Works-Whom/dp/0860916707/ref=sr_1_1?ie=UTF8&s=books&qid=1208231174&sr=1-1
May be more representative of today’s finance , but quiet heavy for those whom are not inspired by mathematics.
Louis Bachelier « Theorie de la spéculation »
Using the Brownian theory in order to explain the « misbehaviour » of financial markets.
Bachlier played, at one point, an important role in Mandelbrot’s “Misbehavior Of Markets”. Perhaps you can remind me Philippe?
Misbehavior being another quite good (imo), not-another-run-of-the-mill book on finance. At that, a good contrarian book.
The major thing I remember from Misbehavior is that stocks returns are not normally distributed but perhaps better described by the Cauchy distribution. In other words, much fatter tails. I.e. much greater volatility.
Which feels intuitively correct.
I guess the non normal distribution in returns is intuitively understandable where financial markets non normal distribution is much less academic and more responding to Bernoulli (l’ancien) ie the suite de Bernoulli or the Paradox of St Petersburg
Road to Serfdom – F.A. Hayek should certainly make the list.
Joseph Schumpeter, 1939, _Business Cycles_ is to me a text of at least equal value to the five you mention, Big Guy. It’s not perfect (what is?), but as a theoretical text is far more comprehensive than any other, and also is much more engaged with historical data and its trajectories than with abstract models, a great source of strength for its analysis.
David Yaseen makes a valuable suggestion, JKG’s tome provides the requisite understanding of the ‘Technocracy’ that is, seemingly, The blueprint for our Post-WWII Economic scaffolding..
That grand gulf between what is and what should be is, certainly, in evidence with such a pick, though, it’s hard to know where you’re going, if you don’t know where you’ve been..
That list definitely needs Das Kapital. To any economist out there that hasn’t read that work they are just stuck in the Cold War era of thinking, that work is quality despite its negative nilly perspective.
Add Friedman/Schwartz’s “The Monetary History of the United States”. It covers the years just after the Civil War until 1960, from a monetarist perspective. It provides an excellent understanding of what money is, and what are its impacts on real economy. For an easier read on money, try Friedman’s “Monetary Mischief” that covers much of the same material, but goes back to ancient times in describing and explaining money, except w/out much math.
Understanding money should be as important to a professional economist as understanding electrons is to a chemist. Dollars (for the US) are in fact like economic electrons, carrying economic energy and information down paths of least resistance, filling voids and propelling economic activity.
BR wrote:
If you want the clift-note version, check out Todd Buchholz’ New Ideas from Dead Economists.
I’m not familiar with it. Thanks, Barry, I will.
Barry,
I’m not positive, but when I last skimmed through the book I thought I saw “Extraordinary Popular Delusions and the Madness of Crowds” by Charles MacKay.
Given the name of the book, how could you exclude A.C. Pigou’s Wealth and Welffare? Internalize the externalities; get the real price out there so we don’t keep imposing social costs on everyone.
Barry: “my1ambition” is right. The sixth classic in the volume is Memoirs of Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay.