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Without an understanding of economics, it’s difficult to describe the world around us. Economic data can create public policies, and lead movements, and a lack of basic understanding can be a real impediment to progress. No one can evaluate data if they don’t know basic best practices, like the fact that one statistic or number (averages included) can’t tell you much. Luckily, gaining a working understanding of economics and data interpretation is possible without having a degree in advanced mathematics.
This list is compiled entirely of works that are digestible for the curious lay reader, and they cover a lot of highly varied ground. Whether you want to learn the history of economics to gain an understanding of how we ended up with the system we have now or find out exactly what a free market economist thinks about, we’ve got you covered.
Best Overall: The Reckoning: Financial Accountability and the Rise and Fall of Nations
In his sweeping work “The Reckoning: Financial Accountability and the Rise and Fall of Nations”, historian and MacArthur Genius Award Winner Jacob Soll charts the development of modern global economics beginning with the dawn of accountancy during the Medici reign. Throughout “The Reckoning,” Soll guides the reader through well-known historical events and enlightens them on the bookkeeping machinations and clever accounting behind such affairs as the Italian Renaissance, the French Revolution, and the 2008 recession.
Soll writes not only about the role accounting plays in global affairs, but also how financial transparency and ideas about what financial systems owe the people they serve have evolved over time. Less of a technical history and more of a social and political one, “The Reckoning” is accessible and entertaining enough for casual readers but interesting enough for industry professionals who want to learn about the roots of their profession. Soll opts to focus on Western accountancy and finance, so readers should be aware this historical account is not an internationally comprehensive one. That said, the insights “The Reckoning” provides and the backdrop of nearly 2,000 years of European and American history provide more than enough interest to make this book a worthwhile read.
Best Classic: An Inquiry into the Nature and Causes of The Wealth of Nations
Adam Smith’s 1776 classic is still widely read for good reason. If you want to understand the early theories related to the basic mechanics of economics, “An Inquiry into the Nature and Causes of The Wealth of Nations” is the most direct route. The editor’s note included in one version of this historic work explains well why this book is still recommended by so many economists, entrepreneurs, and historians. Editor J.S. Nicholson wrote, “the student should not forget that there is often more to be learned from the mode of attacking a subject of a great writer than from the mere acquirement of the more correct result due to the critical labours of a succession of minds of ordinary capacity.”
Likening it to Newton’s “Principia'' for mathematicians, Nicholson correctly points out the intrinsic value in reading a work such as this, which is at once unequivocally seminal and no longer representative of the full extent of human knowledge on the subject. Still, Smith’s breakdowns of the interactions between labor, commodities, stocks, trade, and taxes provide insights into 18th-century economics which are invaluable to the curious student of economics today.
Best on Global Economic Progress: Factfulness: Ten Reasons We're Wrong About the World—and Why Things Are Better Than You Think
When Hans Rosling, Anna Rosling Rönnlund, and Ola Rosling set out to write “Factfulness: 10 Reasons You’re Wrong About the World and Why Things are Better than You Think ” they had a specific aim in mind. The trio (a doctor, a software designer, and a statistician) wanted to dispel ignorance about the state of the world, which they found present without exception throughout every class, country, and culture they studied. Regardless of where their subjects lived or how much education they had most people tested believed the world to be in a worse situation than it is, based on nearly every conceivable metric.
People believed child mortality rates were higher than they are, that the education of girls was less widespread than it is, and that poverty was getting worse instead of falling by nearly half worldwide, as the data shows. “Factfulness” became a New York Times Bestseller in part because of the incredible social and economic information it contains, but it’s also valuable because of the insight it provides as to why human beings are so negative about the world, why it’s so hard to change minds with data, and what we can all do about it.
Best on Progressive Economic Theory: Good Economics for Hard Times
Written by Abhijit V. Banerjee and Esther Duflo, MIT professors and winners of the 2019 Nobel Prize in Economics, “Good Economics for Hard Times” earned instant attention for its holistic yet data-driven take on economics and policies. The argument put forth by Banerjee and Duflo is that to meet the challenges our world faces, people must unite across the aisles, end polarization, and make informed decisions based on data. Through explanations and examples, the duo upends many conventionally held thoughts across the political spectrum, like that illegal immigration hurts the native-born working class (their data shows it doesn’t) or that buying cheap goods from countries without minimum wage is a moral ill (their data shows workers benefit from such jobs).
In addition to tackling economic efficiency, Banerjee and Duflo offer up their takes on trends in extreme political rhetoric, global warming, job automation, bigotry, the fluidity and logic of diverse preferences, and the need for an economic system that considers the needs of the individual and the good of the whole in appropriate proportions.
Best on Free Market Economic Theory: Wealth, Poverty and Politics
Famed economist and syndicated columnist Thomas Sowell has authored more than 30 books on topics related to economics, public policy, history, class, culture, education, and race. A professor with a doctorate from the University of Chicago, Sowell is largely considered to be one of the most influential American economists of the 21st century. In “Wealth, Poverty and Politics” Sowell conveys the nuts and bolts of free market economic theory against the backdrop of modern debates on income inequality and public policy, which he argues often underplay the production of wealth as a factor.
Wealth production, Sowell claims with plenty of data in tow, relies on a confluence of complex factors including culture, demographics, and geography. He also points out that many of the policies that set out to help people in poverty fail to do so, in part because of the incorrect (and overly simplistic) assumptions they are built upon. Using historical events and measurable social trends as examples, Sowell shows the reader how different factors have influenced the economic trajectories of countries and people through history, and how they will continue to do so.
Best for Beginners: Freakonomics
If you want to dip your toes in the water of data, human behavior, and economics, but you also want to enjoy a page-turning ride without tons of business-speak, “Freakonomics” is the book for you. This controversial New York Times bestseller was written by economist Steven D. Levitt and journalist Stephen J. Dubner and originally published in 2005. It has now sold more than 4 million copies and been turned into a movie, making it a much broader reaching economics book than most, which makes sense since its subject matter goes far beyond traditional economics.
In Freakonomics, Levitt and Dubner argue that economics at its most pure form is a study in incentives, in why people (and groups of people) do the things they do and what the impact of those actions is. Using data to explore commonly held beliefs and trends, Levitt and Dubner show the reader that what seems to be true isn’t always true and that many decisions have unintended consequences. Tackling hot-button topics like whether abortion lowers crime (they say yes) and whether good parenting impacts children’s scholastic achievement (they say no), Levitt and Dubner succeed in encouraging readers to look beyond the superficial state of things and explore the data below the surface.
Best on Behavioral Economics: Predictably Irrational
In “Predictably Irrational,” Dan Ariely uses behavioral economics to explain why people do what they do. Some areas Ariely tackles, often with great humor, are lack of self-control, why so many of us procrastinate, and why we insist on splurging on certain items while saving on others. Ariely shows the reader, using hard data, that while people behave in a way that’s irrational on the surface there is some predictability to our irrationality, and there are ways to compensate when making decisions.
A professor of psychology and behavioral economics at Duke, Ariely says his passion began in the hospital, when after surviving major third-degree burns he received a very painful treatment that was made more agonizing because of irrationality. Each day, Ariely would beg for short breaks and for a slower pace as his painful dressings were changed. Each day he was denied for a simple reason: the doctors and nurses, who had never endured the process themselves, said their way was less painful.
That unforgettable experience set Ariely on a lifelong pursuit for answers. His subsequent decades of research about human behavior come together beautifully in Predictably Irrational, which upon publication in 2009 became an immediate New York Times bestseller and received praise from reviewers, economists, and everyday readers in equal measure.
Best Anthology of Economics: The History of Economic Thought
It’s hardly a beach read, but if you’re looking to gain an understanding of the history of Western economic theory “The History of Economic Thought” is as good a place to start as any. Widely read in university-level economics courses, this edition was compiled and edited by Steven G. Medema, a research professor in economics at Duke, and Warren J. Samuels, a well-known economist and former professor in economics at Michigan State University.
Beginning with pre-classical thought, the duo introduces readers to excerpts from the likes of Aristotle, Locke, and in a surprising inclusion Turgot (a female economist writing in the 1770s), among many others. Next is classical thought and a bevy of excerpts from Smith, Ricardo, and Mill. After that, Marx is covered thoroughly followed by writers of the marginalist revolution (circa 1835-1914). The reader continues in that fashion through the development of macroeconomics and institutional economics and ends with post-World War II economics. For an overview of the trajectory of Western economic theories and an introduction to important thinkers in the field, however, “The History of Economic Thought” delivers.
“The Reckoning: Financial Accountability and the Rise and Fall of Nations” (view at Amazon) is an excellent read for economists and casual readers alike and we highly recommend it. We also strongly recommend “Factfulness: 10 Reasons You’re Wrong About the World and Why Things are Better than You Think,“ (view at Amazon) because it’s an entertaining and enlightening read that offers readers insight on how to interpret social and economic trends.
Why Trust Investopedia?
These books were selected from a larger list compiled by the author. The original list comprised Amazon bestsellers in related categories, highly-reviewed bestsellers, and titles known to the writer from previous research. An avid and broadly curious reader, Mona Bushnell is a longtime finance enthusiast and professional writer. She has written extensively on a variety of topics related to business, technology, and finance and she holds a degree in Writing, Literature, and Publishing. When considering titles for this list she merged her top choices with recommendations from the Investopedia Financial Review Board, and the resulting list was formed.