Trying to Make Sense of Markets? Here’s Econ 101 in Five Books
Trying to Make Sense of Markets? Here’s Econ 101 in Five Books
(Bloomberg Businessweek) -- Let’s say Covid-19’s economic impact has you feeling disoriented, and that learning about how the economy works will help you feel less so. It probably won’t, but let’s just say. And let’s stipulate that the only thing you know about econ is what humorist P.J. O’Rourke once said about the difference between microeconomics and macroeconomics: Microeconomists are wrong about specific things, while macroeconomists are wrong about things in general.
You could invest in a textbook such as Principles of Economics, by Harvard professor Gregory Mankiw. But the new coronavirus is crushing enough without tightening a metal band around your forehead. You might actually enjoy reading these books while waiting out the pandemic:
- The Cartoon Introduction to Economics, vols. 1 and 2, by Yoram Bauman, with illustrations by Grady Klein. There’s a lot of genuine learning to be had here, but the medicine goes down easy. The first few pages of the macro book (vol. 2) feature a spaceman, Captain Hook, a hot dog cart, a cement mixer, trucks going off a cliff, and a beehive. Adam Smith pops up in a powdered wig saying he’s never heard of the Great Depression. John Maynard Keynes is credited with telling the first economics joke (“in the long run we are all dead”).
- Antifragile: Things That Gain From Disorder, by Nassim Nicholas Taleb. If you’ve heard Covid-19 described as a “black swan” event, thank Taleb, who popularized the term. (Although he says the pandemic is a predictable “white swan.”) The Black Swan: The Impact of the Highly Improbable was the bestseller he wrote in 2007. In Antifragile (2012), the former options trader returns to his favorite theme—how to succeed in a world where crazy stuff keeps happening.
- The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor—and Why You Can Never Buy a Decent Used Car!, by Tim Harford. Harford is in awe of how the invisible hand assembles the resources to produce a cappuccino and to supply London with bread. (If you like books like this—i.e., ones with long subtitles—you’ll love SuperFreakonomics: Global Cooling, Patriotic Prostitutes, and Why Suicide Bombers Should Buy Life Insurance, by the famous duo Stephen Dubner and Steven Levitt.)
- The Return of Depression Economics and the Crisis of 2008, by Paul Krugman. Krugman may be best known today as a New York Times columnist who needles President Trump, but he’s also a brilliant economist (Nobel Prize, 2008) who explains complex ideas in simple language. This book about how aggressive government action can fight a steep downturn just became freshly relevant.
- Good Economics for Hard Times, by Abhijit Banerjee and Esther Duflo. This is the newest and weightiest book on the list, by a married couple who shared the Nobel prize in economics last year. Banerjee and Duflo made their reputations with experiments on how to alleviate poverty in developing countries. “We realized,” they write, “the problems facing the rich countries in the world were often actually eerily familiar to those we are used to studying in the developing world.”
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