Five of the best introductions to economics
I’m often asked which economics books I recommend to someone who wants to get a good introduction to the subject. There are some obvious choices – a good textbook, for example – and of course I wrote The Undercover Economist (UK) (US) and The Undercover Economist Strikes Back (UK) (US) to be the very best introductions to microeconomics and macroeconomics I could manage.
But of course there’s so much more, and I wanted to make a few suggestions.
Thinking Strategically (UK) (US) by Avinash Dixit and Barry Nalebuff is the book that made me fall in love with economics. Without it I’d have dropped the subject completely at university. Thinking Strategically is an introduction to game theory – a mathematical analysis of human vs. human interaction from a tennis match to a salary negotiation. There’s not much maths in the book, but just enough to make the point. The writing is lively and the insights are full of counterintuitive wisdoms. Excellent stuff.
Money Changes Everything (UK) (US) by William Goetzmann was a real inspiration for the financial sections of Fifty Things That Made the Modern Economy (UK) (US). Goetzmann goes deep into the history of financial ideas from money itself to insurance to banking. A detailed and scholarly book, but never a dull moment.
Hidden Order (UK) (US) by David Friedman is a brilliant alternative to a microeconomics textbook. Friedman is a libertarian – even more so than his father Milton – and the politics emerges from time to time in this book, but there’s no shame in that. It is scintillatingly clear about how economic theory fits together, and full of clever thought experiments. [EDIT 12 June 2018. Some people have asked, “Why not ‘The Armchair Economist’ by Steven Landsburg?” Well, why not indeed? It’s a superb book: (UK) (US). But I see it as a close substitute for Hidden Order; the two books share some of the same ideas and tone. I like them both very much.]
The Truth About Markets (UK) (US) by John Kay presents the flip side to Friedman: where Friedman sees simplicity, Kay warns that markets are a little messier and more socially embedded. Unlike many critics of classical economics, Kay understands exactly what he is chipping away at, and both the genius and the limits of the market. A wonderful book – and prescient in many ways.
Grand Pursuit (UK) (US) by Sylvia Nasar is a magisterial history of economic thought: Marshall, Robinson, Keynes, Fisher and the rest. A real education for a history-of-thought ignoramus like me. (On a similar theme, I’m looking forward to reading the brand new The Great Economists (UK) (US) by Linda Yueh, which looks good.)