Late summer reading list

Occasionally I get asked to recommend a good book list for anyone wanting to teach themselves the economic basics.

I would start with J.K. Galbraith's Age of Uncertainty.  It is a companion book to a TV series that ran on BBC / PBS so it's very accessible.  It covers how economists responded to the growth of industrialization with theories to describe the big events like the Great Depression.  An excellent companion overview is Robert Heilbruner's The Worldly Philosophers.  This is a primer on how the ideas of political economy evolved over time.

Then if you wish to understand the thinking that informed the New Deal reforms you must eventually read some Thorstein Veblen. But Veblen is quite difficult--it is turn-of-the-century English written by someone who learned English as a second language. But if you can do it, read Theory of the Leisure Class first and then Instinct of Workmanship and the state of the industrial Arts.  Both books are incredible but if they are too tough, try Clarence Ayres' The Nature of the Relationship between Ethics and Economics.  Ayres was the most accurate interpreter of Veblen--so almost anything by Ayres will help you understand Veblen's big insights.

I should like to insert a personal plug for the need to understand Veblen.  For a wide assortment of reasons, I happen to think his worldview just towers above the better-known political economists like Adam Smith or Karl Marx.  That's quite a claim so I have tried to back it up with a website I have built and maintained since 1995.  Essentially the claim rests on three foundations.

1. Veblen had better information.  Most of our political economists got their ideas of how the world worked from a book.  This is especially true of Marx who spent countless hours in the reading room of the British Museum.  By contrast, Veblen grew up on edge of civilization itself and had a front-row look at how people like his parents managed to build the necessary support structures for life with few tools and the rawest of materials.  These lessons in practical economic development inform Veblen's writings in a way the others never quite match because he had seen economic theory tested in the harshest reality a Minnesota climate could offer.
2. Veblen understood the dynamic nature of human society.  He came of age when the most interesting idea was the then-new Theory of Evolution.  In a world where the only constant is change, Veblen understood that economic theory had to have the ability to evolve along with the other structures of society.  He covers this need in a stunning little essay entitled Why Economics is Not an Evolutionary Science.  It was his first academic essay and he never looked back having joined the ranks of those who believe that there are no final answers--only processes that get us to better answers.
3. But perhaps Veblen's greatest contribution to social theory was his idea that the most important class interests were divided between the Leisure Class (the Predators) and the Industrial Classes (the Producers.)  Both the books mentioned above are based on this theory.  I was so impressed by the idea that I wrote a book using it and I went to considerable effort to create an elaborate 3d Illustration of this class theory.

And getting back to Galbraith, the times almost demand you read his The Great Crash of 1929.  And his New Industrial State is a GREAT description of the world the Keynesians helped create by 1967.  I once wrote an essay called The Greatest Generation, economics division about the guys who figured out the Great Prosperity (1933-1973).  My model was Galbraith.


Update 3 AUG 2010
If you click on the comments, you will see my sidekick Tony essentially write that the book to read is my very own Elegant Technology.  It is actually a pretty good suggestion because everything listed above is embedded in ET.  Plus if you read me rather than Veblen, you won't have to discover how many words from the turn of the last century you don't know.  (Which is no small matter--the first time I read Veblen I am sure I had to look up words at least 100 times and I am pretty proud of my vocabulary.)

Anyway, Thank You Tony!