Here are 10 books I would recommend for anyone interested in learning free market economics. Some of them are challenging, but all of them are rewarding. I’ve tried to put them in rough order of difficulty, from easiest to most challenging. Aside from Hazlitt’s book, which is simply too important not to name, I didn’t include books that made my last reading list.
- Economics in One Lesson – Henry Hazlitt. Unsurpassed as an introduction to economics, this gold mine is one of those books you can keep coming back to again and again and learn something new each time. An example: I just flipped to a random page (146 in my version) on which Hazlitt addresses a question I hear all the time in one form or another: Is it possible for unions to increase employee pay at the expense of a company’s profits? For Hazlitt’s truly brilliant answer, you’ll have to check out the book.
- The Making of Modern Economics: The Lives and Ideas of the Great Thinkers – Mark Skousen. This is a good overview of the major thinkers in the history of economics, from Smith to Marx to Keynes to Hayek. The author is openly supportive of free markets, but his presentation of economists such as Veblen and Keynes is nonetheless fair (certainly more fair than the way free market thinkers have been treated in other similar works). There is a bit too much about the economists’ personal lives for my taste, but aside from that minor quibble, this is a great way to get acquainted with the history of economic thought.
- Economic Policy: Thoughts for Today and Tomorrow – Ludwig von Mises. “And all the talk about the so-called unspeakable horror of early capitalism can be refuted by a single statistic: precisely in these years in which British capitalism developed. . .the population of England doubled, which means that hundreds or thousands of children—who would have died in preceding times—survived and grew to become men and women.” That’s just a sample of what you’ll find in this brief work, based on a series of extemporaneous lectures by the great economist. In Economic Policy, Mises sketches the essentials of his thought—from his economic defense of capitalism to his critiques of socialism and interventionism to the nature and cause of inflation.
- Prosperity Through Freedom – Lawrence Fertig. This volume, which unfortunately is out of print, was written by a friend of Mises. Indeed, I can’t do better than Mises’s own description of the book: “Step by step Mr. Fertig analyzes and invalidates all the dogmas of the Keynesian creed and all the slogans of the popular ‘statist’ prejudices. He demolishes the popular fable of the blissful effects of government interference in the market and of government spending. Prosperity Through Freedom is the most powerful plea for the value and ideals of Western Civilization. Every conscientious voter ought to read and reread this brilliant book and to remember its teachings on election day.”
- Selected Essays in Political Economy – Frédéric Bastiat. Bastiat was the Hazlitt of his generation (or, more accurately, Hazlitt was the Bastiat of his). Writing during the mid-19th century, Bastiat made the ideas of the classical economists accessible to everyone with his lively writing style, his vivid examples, and his telling analogies. This collection contains the brilliant “What Is Seen and What Is Not Seen,” on which Hazlitt would later base his “one lesson.”
- The Economic Way of Thinking – Paul Heyne (later editions feature additional authors). This textbook is a favorite of free market professors teaching introductory economics, and it’s no mystery why. The late Paul Heyne was masterful at explaining basic economic concepts with clarity and enthusiasm. The aim of the book is conveyed by the title: Heyne wanted students to grasp, not a jumble of conclusions, but how economists think about the world. He succeeds admirably.
- Economics for Real People – Gene Callahan. As you may have noticed, this list is heavily, heavily skewed toward the Austrian school of economics. This particular book is the best overview of the whole of Austrian economics I know of. Callahan is a good writer and does something that few economics writers do—gives plenty of clarifying (and original) examples. In particular, I want to draw your attention to chapter 13, which gives an outstanding account of the Austrian theory of the business cycle.
- Time and Money – Roger W. Garrison. This is an advanced, highly technical work, but for anyone who wants to reach a deep macro-level understanding of how an economy functions, Time and Money is unsurpassed. You can get a taste for Garrison’s thought in this video, “Hayek v. Keynes.”
- Capitalism – George Reisman. This is a veritable encyclopedia of free market economics, and I have learned more about capitalism from it than from any other single economics book. It is, however, very long and sometimes technical, so I recommend reading it selectively according to your interests. I also think Reisman’s approach is sometimes burdened by an over reliance on deduction—indeed, he claims, wrongly in my view, that economics is a deductive science. Nevertheless, this book is overflowing with economic insights. The best sections are chapter 3 (Natural Resources and the Environment), chapter 10 (Monopoly Versus Freedom of Competition), and chapter 13 (Productionism, Say’s Law, and Unemployment). You can download a PDF of the entire book for free here. (FYI, ARI ended its association with Reisman in 1994.)
- Human Action – Ludwig von Mises. This is Mises’s masterwork, and although it is pretty much the opposite of beach reading, if you put a lot into it, you’ll get a lot out of it—namely, a profound understanding of how markets function, and how government intervention distorts their functioning. One word of advice: you can profitably skip the first 90 pages, which consists of bad philosophy rather than good economics.
So what do you think? Are there any books you would add to the list? Any that you think I shouldn’t have included?