I recommend these books on economics for beginners as well as sophisticated investors. For beginners: you have to work your way up this ladder:
This is an excellent article from Mises.org to give you introduction to the ideas of Austrian theory.
See also, “A Primer on Mises.”
“The Microeconomic Foundations of Macroeconomic Disorder: An Austrian Perspective on the Great Recession of 2008“, by Steven Horowitz.
This is an excellent 25 page summary of Austrian theory and how it looks at the current economic crisis.
Economics in One Lesson, by Henry Hazlitt.
This little book has been a best seller for 55 years for a good reason. It is the best introduction to economics ever written. It is written clearly and concisely but it packs a lot of ideas in a small package. Highly recommended.
What Has Government Done to Our Money?/Case for a 100 Percent Gold Dollar, by Murray Rothbard.
This is another gem of a book. It combines two essays by Murray Rothbard, one of the great Austrian School economists, that takes the mystique out of money and explains what it is and its function in the economy. Highly recommended.
The Concise Guide to Economics, by Jim Cox.
I just discovered this fine small economics primer. This is a more general treatise on economics than Economics in One Lesson and presents economics in a very concise manner, but well versed in Austrian economic theory. It’s available online or you can buy it through Mises.org.
The Law, by Frederic Bastiat.
This is one of the classics of economics. This booklet deals with many of the issues we see today yet it was written in 1850 at the height of much social and political turmoil in France and Europe. Bastiat’s famous law, “What is Seen and What is Not Seen,” was the basis of Hazlitt’s work. Well worth the read.
The Road to Serfdom, by Friederich von Hayek.
This book made Austrian economist Hayek famous. Written in the depth of WWII (1944), “What F.A. Hayek saw, and what most all his contemporaries missed, was that every step away from the free market and toward government planning represented a compromise of human freedom generally and a step toward a form of dictatorship …” (from the Mises Institute). A profound and monumental book. Another book worth reading is The Anti-Capitalist Mentality, by Ludwig von Mises, Hayek’s teacher and mentor.
Freedom and Capitalism, by Milton Friedman.
This is another classic that dispels the myths of capitalism to reveal capitalism’s power to positively transform human society. While Austrians reject Friedman’s economics because of his Monetarist views and his dismissal of Austrian theory (he never really understood it), he was a powerful and charismatic defender of freedom, showing that capitalism and freedom are synonymous.
“The Pretense of Knowledge” by Friedrich von Hayek.
This is Hayek’s famous Nobel prize lecture on the epistemological problems with contemporary economics. He points out the problem with economists’ attempts to turn economic inquiry into a “hard” science whereby human behavior is measurable like physical matter. He says that econometric empirical research starts out on the wrong foot which why, he says, “as a profession we [economists] have made a mess of things.”
Human Action, by Ludwig von Mises.
This is probably one of the greatest books ever written and one of mankind’s greatest intellectual feats. This is not for beginners, but it is a comprehensive “unified field theory” of economics and social organization. One in a great line of Austrian School economists, Mises presents Austrian theory in economics, including his own great contributions to economics (including the discovery of the mechanism of the business cycle), as a comprehensive social science. The Mises Institute has a Scholars Edition keyed to a Study Guide.
“Mises: Scholar, Creator, Hero” by Murray Rothbard.
This article is Rothbard’s tribute to the man who inspired him and countless others. It is a brief biography of Mises as well as an examination of his ideas and the historical context into which he fit. Without Mises it is likely that the Austrian school would have disappeared. It is an excellent primer of the ideas and the man. It is an article that is a part of The Essential Mises by Rothbard. This is highly recommended.
Mises: The Last Knight of Liberalism, by Jörg Guido Hülsman.
This is an amazing biography of an amazing man, Ludwig von Mises (1881-1973), who was in my opinion the greatest Austrian scholar and one of history’s greatest thinkers. This book not only details his life but gives you a history of economic thought as well as a history of the times in which Mises lived. Highly recommended.
The Forgotten Man, by Amity Shlaes.
Much of what you have heard about the Great Depression is wrong. This book is a wonderfully written history that highlights the personalities and policies of the times, especially Roosevelt’s New Deal “Brain Trusters.” It will open your eyes.
The Politically Incorrect Guide to The Great Depression and the New Deal, by Robert P. Murphy.
While Shlaes is poetic, Murphy’s wonderful little book takes all the myths head on and demolishes them one by one. Murphy is a well known and prolific Austrian scholar. He points out how Hoover and Roosevelt did almost everything wrong and turned a typical recession into the Great Depression.
America’s Great Depression, by Murray Rothbard.
Rothbard takes a scholarly, classically Austrian approach to the analysis of the Great Depression. This is one of the classics of modern Austrian scholarship and is highly recommended to those who wish to have a more comprehensive analysis of how and why the Great Depression occurred. It will give you a course in Austrian theory economics as you read along.
Meltdown, by Thomas E. Woods, Jr.
This is currently the best book on the Great Recession of 2008 – . It traces the causes of the recession from an Austrian perspective and gets everything right. It was a NYT bestseller. It also gives some good comparisons in history as to why the “cures” proposed by the Bush and Obama Administrations will actually inhibit a recovery.
Anything by Ludwig von Mises. Especially Theory and History.
Anything by Friedrich von Hayek.
Anything by Murray Rothbard.
The Black Swan, by Nassim Nicholas Taleb.
Fooled By Randomness, by Nassim Nicholas Taleb.
The (Mis) Behavior of Markets, by Benoit Mandelbrot
These three books are radical and groundbreaking in financial analysis. They destroy the foundations of modern financial analysis: Efficient Market Hypothesis, Modern Portfolio Theory, Capital Asset Pricing Module (CAPM), and Black-Scholes. These are epistemological and behavioral views of markets (Taleb) based on probablity analysis discovered by Mandelbrot (fractal geometry and Power Laws). All three books are “musts” for investors.
The Virtue of Selfishnesss, by Ayn Rand.
Capitalism: The Unknown Ideal, by Ayn Rand.
These are the manifestos of Rand’s Objective movement. They create a moral foundation for capitalism drawing on classical liberal philosophy. They are a synthesis of philosophers from Aristotle to Kant (she would deny Kant for the most part), with her unique and profound additions to moral thought. Most people started with her novel Atlas Shrugged, which still sells 500,000 copies a year.
Some books that I have been reading or re-reading:
The New Deal in Old Rome, by H. J. Haskell
Conceived in Liberty, Vols. I, II, and III, by Murray Rothbard.
The Failure of the ‘New Economics‘, by Henry Hazlitt. This is his refutation of Keynes.
Money, Bank Credit, and Economic Cycles, by Jesús Huerta de Soto.
Man, Economy, and State, by Murray Rothbard.
Another access point to Austrian theory is via You Tube. The Mises Institute has produced a number of excellent lectures and posted them on You Tube.
My favorite novels
I like to pick these up again after 5 to 10 years and reread them. Most of these types of lists are B.S. fake erudition things. I know I’ll get a lot of guffaws about Tolstoy and Melville, but it’s true and it’s my blog. I think a common thread is that they are well written and/or well plotted.
War and Peace, by Leo Tolstoy
Atlas Shrugged, by Ayn Rand.
Fountainhead, by Ayn Rand.
The Aubrey-Maturin Series, by Patrick O’Brian (20 vol. series).
Novels by John LeCarre, especially his earlier works.
Moby Dick, by Herman Melville.
Look Homeward, Angel, by Thomas Wolfe.
Letter From The Earth, by Mark Twain.
Ring Trilogy, by J.R.R. Tolkien
Winds of War, by Herman Wouk.
Oh, before I forget, I highly recommend the mystery novels of Stieg Larsson, The Girl With the Dragon Tattoo, The Girl Who Played With Fire, and The Girl Who Kicked The Hornet’s Nest.
I’ve just been reading a series of books of a type I never thought I would get into, and that is “fantasy.” If you are interested in the Middle Ages, set in a fictional world, then I urge you to read George R.R. Martin’s well written “Ice and Fire” series of novels. He has written four novels in what is one very long saga that will be familiar in its rich knowledge of Medieval life, but with the slightest touch of fantasy. These are complex, character-driven, very long books that delve into the elements of intrigue, politics, plotting, war, murder, incest, revenge, survival, transformation, and dismay. The series starts off with Game of Thrones. HBO is coming out with a TV series based on this book, starring that fine actor, Sean Bean. Martin is coming out with his latest book in July, 2011.