One of my ambitions for this book is that it will make readers want to go and read more about money and economics. I’d come close to saying that the whole point of my writing it is for people to be able to go on and read more. . . . The good news is that the standard of writing and reporting in this area is high, ranging from books to the business papers and pages to the blogosphere. The tricky thing is knowing where to begin, and there’s no better place to start than the business pages of the newspapers. After that, it’s a question of what areas within the field seem most interesting.
For a very good general overview of the field today—what amounts to a framing of the current political and economic world order—a good place to start is The Great Escape, by the Scottish-born Princeton economist Angus Deaton. Then you could go in several directions. For a look at the foundational technical questions of economics, Economics for Dummies, by Sean Masaki Flynn, is good. Naked Economics, by Charles Wheelan, is an excellent primer. John Kay’s The Truth about Markets is a brilliant, wide-ranging explanation of the power of markets in many areas of life. From there, it is a short move towards the politics of economics, maybe beginning with Ha-Joon Chang’s 23 Things They Don’t Tell You about Capitalism, a highly effective account of the arguments and evidence against neoliberal free-market orthodoxies. A number of very good recent books look at the effect of these policies in terms of their impact at the top end of the income distribution, and the consequences of that inequality for everyone else: Chrystia Freedland’s Plutocrats, Robert Frank’s Richistan, Jaron Lanier’s Who Owns the Future?, and George Packer’s The Unwinding. Spring 2014 saw the publication of Thomas Piketty’s masterpiece Capital in the Twenty-First Century, an important, powerful, and densly argued study of the shift in the balance of power between capital and labor.
There is a notable gap in the market here: there are attacks on the existing neoliberal order, but there doesn’t seem to be a powerful popular counternarrative. It’s not as if there are no arguments on the economic and political right, and no one who believes and indeed acts on those arguments; but they aren’t well represented in book form. Maybe neoliberal capitalism is so well entrenched it doesn’t need defenders or advocates.
Where there’s been a publishing boom instead is in the field of microeconomics. Tim Harford is a riveting expositor of the field, lively and fair-minded, and his books The Undercover Economist and its macroeconomic companion piece The Undercover Economist Strikes Back are excellent places to start, both because they are so interesting in themselves and because they give a good initiation in how economists think and study these sorts of questions. Freakonomics, by Steven D. Levitt and Stephen J. Dubner, is a highly successful study of a number of contentious political and social questions from a microeconomic perspective. The work of the Chicago school of economists on areas such as rational choice is worth a look too, perhaps starting with Gary Becker’s Nobel Prize lecture, “The Economic Way of Looking at Life.” Behavioral economics, which has a particular interest in how people think and act, has grown out of microeconomics. You Are Not So Smart, by David McRaney, is an introduction to cognitive mistakes—though that makes it sound a lot drier than it is. The unchallenged masterpiece in the field is Thinking, Fast and Slow, by Daniel Kahneman.
Readers interested in finance are also spoiled by the quality of the writing. There’s no better place to start than with the work of Michael Lewis, perhaps beginning with his first book, Liar’s Poker, an account of his job working as a bond trader at Salomon Brothers, and then skipping forward to The Big Short, a riveting description of the shenanigans behind the credit crunch. His most recent book, Flash Boys, is an account of high-speed trading that will make your hair stand on end, if it hasn’t all fallen out from worry by the time you’ve finished reading it. Alice Shroeder’s The Snowball, a biography of Warren Buffett, is very different in tone and texture, but it brings in a lot of stories and information from the world of finance, as does Sebastian Mallaby’s More Money Than God, a (suprisingly and convincingly positive) study of hedge funds.
Some of you may well be thinking: but how is any of this going to help me become rich? If you are, here are two books for you: Burton Malkiel’s A Random Walk Down Wall Street, which explains efficient-market theory for the ordinary investor, and John Kay’s The Long and Short of It. Kay’s book is the best book ever written for the British individual investor, by a country mile. Ben Graham’s The Intelligent Investor, the first book written on the subject, remains one of the best.
One of the liveliest areas of argument in this field concerns the poorest people in the world, and the question of how best to help them. There are two camps, one in favor of aid and one not: the powerfully argued work of William Easterly stands out in the anti-aid field, thanks to his books The White Man’s Burden and The Tyranny of Experts. Damibisa Moyo’s Dead Aid is strongly argued too. A considered argument from the other side of the debate is Paul Collier’s The Bottom Billion, and the annual letter from the Gates Foundation is indispensable reading for anyone interested in the question.
The internet offers many superb resources on economics, as well as lively debates that respond to news and data in real time. There is no better place to begin than Twitter: I would start by following Tim Harford, Tyler Cowen, Aditya Chakrabortty, and Paul Kedrosky.
Finally, I would urge anyone who’s interested in the subject but hasn’t read The Wealth of Nations to give Adam Smith’s masterwork a go. Smith was a great writer as well as a great thinker, and his book is still fresh and still readable, as well as being a serious candidate for the most influential work of the humanities ever written.