What is a popular economics book? My first thought is that it is written without the mathematics and diagrams that economists use when teaching courses.
My second thought is that the book has to have received some notice in the press. As this might be too heavily biased against books by conservative authors, I have relaxed this criterion.
My third thought is that there are a ton of popular books on business and the stock market that might belong on the “Avoid” list, but I do not want to chronicle those.
Books to Read
“Everyone should understand how markets work and why they are important.”
Everyone should understand how markets work and why they are important. This is called microeconomics or price theory. An enjoyable way to approach this subject is to read The Price of Everything, a didactic novel by Russ Roberts.
For an overview, I recommend Hidden Order: The Economics of Everyday Life, by David Friedman. He shows how to think like an economist. His description of growing automobiles by growing wheat, putting it on ships to Japan, and having the ships return with automobiles, is clever and powerful. As a runner-up, consider Basic Economics, by Thomas Sowell.
Another topic is macroeconomic performance. This covers economic expansions, recessions, unemployment, and inflation. This is a controversial topic, concerning which there are many conflicting theories. Pretty much every book, including mainstream textbooks, is biased one way or another, pushing a particular theory. The book I recommend is Macroeconomic Patterns and Stories, by Edward Leamer. In 2020, I wrote,
- This provides an excellent introduction to the data that are central to macroeconomics—how they are collected and what they mean. Although it is framed as an introductory textbook for business school students, it is valuable for economists at all levels. Leamer wisely steers the reader away from thinking in terms of systems of equations and instead looks for patterns in the data and stories that could explain those patterns.
I was saddened to read of Leamer’s death in February of 2025. His macroeconomics book, by sticking close to the data, is very practical and free of bias.
Standard economics tends to overlook the role of overhead costs and economies of scale. These are especially important in the contemporary world of global software giants like Microsoft, Alphabet (formerly Google), and Meta (formerly Facebook). A classic book I recommend on this topic is Information Rules, by Hal R. Varian and Carl Shapiro. A more recent treatment is Capitalism Without Capital, by Jonathan Haskel and Stian Westlake.
Economic history is an important source of perspective that is too often neglected in both academic and popular economics. I recommend Manias, Panics, and Crashes, by Charles P. Kindleberger and Robert Z. Aliber. The book covers episodes of financial excess.
It is also important to understand the dramatic escape from poverty that resulted from the Industrial Revolution. A classic book is How the West Grew Rich, by Nathan Rosenberg and L.E. Birdzell, Jr. A more recent treatment is A Culture of Growth, by Joel Mokyr.
Much gets written about economic inequality. On that topic, a modern classic I would recommend is Myths of Rich and Poor, by W. Michael Cox and Richard Alm. They take the contrarian view that the poor are not getting poorer. One of their most persuasive tables shows that people who were in the bottom percentiles decades earlier had risen in the income distribution by the time that the book was written. This process has continued.
Books to Avoid
On the topic of income distribution, Thomas Piketty’s Capital in the 21st Century tops the list of books to avoid. It has been subject to some devastating criticism, both in theory and in data. For example, much of the decrease in the share of income going to labor that Piketty ascribes to an increase in capital income was shown to be due to an increase in rental income from real estate. Piketty has been praised as a prose stylist, and yet the book sits unread on many a bookshelf.
On macroeconomics, Stephanie Kelton’s The Deficit Myth, propounds what is known as Modern Monetary Theory. MMT appears to justify almost unlimited government deficits, and its influence may have contributed to the extravagant government spending and resulting inflation that wounded the Biden Presidency.
For more on these topics, see
Steven Levitt and Stephen J. Dubner published Freakonomics in 2005. This surprise best-seller probably found more readers than all of the rest of the books mentioned in this article put together. Many economists were happy to see a popular treatment that demonstrated the methodology of natural experiments and the use of clever analysis to challenge conventional wisdom on topics. But other economists saw it as a collection of small studies, lacking any overall lesson. Critics saw many of the studies as addressing topics in sociology rather than economics. Finally, some of the results of the studies did not stand up under further investigation. Overall, the reasons for praising the book largely still hold true, but so do the criticisms.
Footnotes
[1] Note: This format is inspired by Noah Smith, who posted his own list on Noah Smith’s Substack, Noahpinion, “Popular econ books: What to read, what not to read”
[2] Russell Roberts, The Price of Everything: A Parable of Possibility and Prosperity. Princeton University Press, 2009.
[3] David Friedman, Hidden Order: The Economics of Everyday Life. Independently published, 2019.
[4] Edward Leamer, Macroeconomic Patterns and Stories.
[5] Carl Shapiro and Hal Varian, Information Rules. Harvard Business Review Press, 1998.
[6] I reviewed this book at “Economics when Value Is Intangible,” by Arnold Kling. Library of Economics and Liberty, Jan. 1, 2018.
[7] Charles Kindleberger, Manias, Panics, and Crashes: A History of Financial Crises. Wiley, 2000.
[8] Nathan Rosenberg and L.E. Birdzell, Jr. How the West Grew Rich: The Economic Transformation of the Industrial World. Basic Books, 1987.
[9] I reviewed this book at “Ideas and Economic Growth,” by Arnold Kling. Library of Economics and Liberty, Jan. 2, 2017.
[10] Michael Cox and Richard Alm, Myths of Rich and Poor. Basic Books, 2000.
[11] Thomas Piketty, Capital in the Twenty-First Century. Belknap Press, 2017.
[12] I reviewed this book at “Deficits—Budgetary and Conceptual,” by Arnold Kling. Law and Liberty, July 17, 2020
[13] Steven D. Levitt and Steven J. Dubner, Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. William Morrow, 2005.
*Arnold Kling has a Ph.D. in economics from the Massachusetts Institute of Technology. He is the author of several books, including Crisis of Abundance: Rethinking How We Pay for Health Care; Invisible Wealth: The Hidden Story of How Markets Work; Unchecked and Unbalanced: How the Discrepancy Between Knowledge and Power Caused the Financial Crisis and Threatens Democracy; and Specialization and Trade: A Re-introduction to Economics. He contributed to EconLog from January 2003 through August 2012.
Read more of what Arnold Kling’s been reading. For more book reviews and articles by Arnold Kling, see the Archive.
