We may arguably say that the field of modern economics started with Adam Smith and his masterpiece 'An Inquiry into the Nature and Causes of the Wealth of Nations' published in 1776. The book is commonly known as 'The Wealth of Nations' and is the first comprehensive system of political economy [1]. Ever since, the field of economics has developed enormously both in the academic sense and its impact, it has on our societies. Today, people can understand and appreciate the significance of economic growth, monetary policies, or government interventions. But we wouldn't get here if it weren't for many scholars and economists that have been fundamental in the development of economic thought.
Business Compendium compiled a list of the most influential and arguably the best five books in economics that everyone should read in their life.
1) The Wealth of Nations by Adam Smith
This list would never be completed if we didn’t include Adam Smith’s recipe for national prosperity that has not been bettered since, based on small government and the freedom of citizens to act in their best interests [2]. Adam Smith explained here the idea of ‘invisible hand,’ which in a nutshell tells you: there is nothing wrong with pursuing your own interests. In a free market, the combined force of everyone pursuing their own interests is to benefit society as a whole, enriching everyone [3]. Although The Wealth of Nations is 245 years old and the ideas explained there perhaps even older, it became the most important and influential book ever written in the field of economics, with Smith’s ideas still being prevalent in current markets and global economies.
2) The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers by Robert L Heilbroner
Robert L Heilbroner's The Worldly Philosophers is one of the most proclaimed and read books on the history of economic thought. He defines the common thread linking the world's greatest economic thinkers and explores the philosophies that motivate them [4]. This book not only enables us to see more deeply into our history but helps us better understand our own times [5]. In the spirit of Carl Sagan's quote: "You have to know the past to understand the present." I will leave you with The Worldly Philosophers to explore the ideas from the world of Adam Smith through The Gloomy Presentiments of Parson Malthus and David Ricardo to The Heresies of John Maynard Keynes.
3) The Affluent Society by John Kenneth Galbraith
John Kenneth Galbraith, born on 15 October 1908 in Ontario, Canada, was an economist and public servant known for his support of public spending and for the literary quality of his writing on public affairs. In his famous critique of the wealth gap, The Affluent Society (1958), Galbraith blamed the “conventional wisdom” of American economic policies and called for less spending on consumer goods and more spending on government programs [6]. The Affluent Society is as relevant today on wealth in America as it was in 1958.
Along with his most recognisable piece, he also wrote two other significant books: American Capitalism: The Concept of Countervailing Power and New Industrial State.
4) The General Theory of Employment, Interest and Money by John Maynard Keynes
The General Theory of Employment, Interest, and Money sounds like another boring economics textbook, but that’s actually far from the truth. John Maynard Keynes’ magnum opus directly responded to the Great Depression and helped shape modern macroeconomics. Initially published in 1936, the book has outlived WWII, a revolution in technology, the baby boom in the US, several smaller and more prominent in-scale economic recessions, yet his ideas remained at the core of modern economic thinking. After reading this book, you will be more familiar with the economic theory we call today – Keynesianism.
5) Capital in the Twenty-First Century by Thomas Piketty
Thomas Piketty's quest to transform debate and set the agenda for the next generation of thought about wealth and inequality made it one of the most acclaimed economics books in the 21st century. French economist focuses on wealth and income inequality in Europe and the United States since the 18th century. Without a doubt, income inequality is one of the 'hottest' topics and issues in economics today and one that nobody has found a solution to. Yet, Thomas Piketty seems to be a step ahead of everyone else…or does he?
References:
[1] Heilbroner, R. (n.d.). Britannica. Adam Smith – Scottish Philosopher [online]. Available at https://www.britannica.com/biography/Adam-Smith
[2] Smith, A. (2010). The Wealth of Nations: The Economics Classic - A Selected Edition for the Contemporary Reader. [ebook] Wiley. Available at: https://www.perlego.com/book/1006961/
[3] Conway, E. (2012). 50 Ideas You Really Need to Know – Economics 2nd edition. Quercus: London
[4] Heilbroner, R. (2000). The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers 7th edition. Penguin Books: London
[5] Good Reads (n.d.). The Worldly Philosophers [online]. Available at https://www.goodreads.com/book/show/82120.The_Worldly_Philosophers
[6] Britannica (n.d.). John Kenneth Galbraith [online]. Available at https://www.britannica.com/biography/John-Kenneth-Galbraith