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Friday, December 20, 2019

New to Economics? Here Are 5 Free eBooks to Get You Started

Jumpstart your journey into a beautiful world of spontaneous order and human interaction.

Image credit: Pixabay | Pixabay license (https://pixabay.com/service/license/)

Economics may seem like a daunting subject. The newcomer might envision it as a bunch of fancy equations and graphs, with vocabulary that sounds like a foreign language. I can assure you, however, that economics is a beautiful world and not as complicated as you might believe. In fact, economics starts with individual human action. If you can understand that humans act with a purpose, you’re well on your way to understanding economics.

To help you learn from the ground up, I’ve compiled a list of 5 free eBooks, ranked from easiest-to-understand to more-advanced. Journeying through this list will give you a new perspective on what economics actually is, tools and terminology to talk econ with the best of them, examples of common economic misconceptions, and a base-level understanding to jumpstart your dive into more advanced material. Ready to get started? Your adventure awaits below:

1. “I, Pencil” – Leonard E. Read

This timeless and perspective-shifting essay was originally written by FEE founder Leonard E. Read in 1958 and is a must-read for anybody curious about economics. Read tells a story through the eyes of a pencil that details the innumerous forces behind market production, and how no single person could possess the know-how or resources to produce such a thing. (This is the first econ book I ever read, and it completely transformed the way I view the world.)

I, Pencil, simple though I appear to be, merit your wonder and awe, a claim I shall attempt to prove. In fact, if you can understand me—no, that’s too much to ask of anyone—if you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is so unhappily losing. I have a profound lesson to teach. And I can teach this lesson better than can an automobile or an airplane or a mechanical dishwasher because—well, because I am seemingly so simple.

Simple? Yet, not a single person on the face of this earth knows how to make me. This sounds fantastic, doesn’t it? Especially when it is realized that there are about one and one-half billion of my kind produced in the USA. each year.

2. Essentials of Economics – Faustino Ballvé

Originally written in Spanish by Professor Faustino Ballvé in Mexico, the aforementioned Leonard Read stumbled upon this book and decided to publish it in English. This 99-page primer will familiarize you with the most basic principles, ideas, and applications of economics. Ballvé will help you understand what economics actually is, and from there, will help you further understand its implications.

…the economic domain is constituted by human action directed toward the satisfaction of wants by the exercise of the power of choice. Economics is, accordingly, the study of this economic activity on the part of man. It is not concerned with philosophical or moral problems, since economic science is not adjudicative, but descriptive.

3. Economics in One Lesson – Henry Hazlitt

For this one, I’m proud to say I had a hand in publishing the latest edition. However, its lineage goes back to 1946, when FEE was just starting and published this book as one of its first. It was written by economist Henry Hazlitt, who was an early editor of The Freeman (which FEE ran from 1956 to 2016). In his work, Hazlitt will introduce you to timeless economic lessons, help you understand the unintended consequences of political actions, and will also help you identify common economic misconceptions, such as “the broken window fallacy.”

…there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences.

In this lies almost the whole difference between good economics and bad. The bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.

4. An Introduction to Austrian Economics – Thomas C. Taylor

After being given a solid overlay of economics, it’s time for you to venture into the Austrian school, whose unique contributions often go overlooked, but are some of the most important to understand. The Austrians rejected mathematical macroeconomic views and instead chose to focus on microeconomic individual action. They discredited the traditional “labor theory of value” and instead came up with a “subjective theory of value.” Other contributions include marginal decision-making, business cycle theory, and the economic calculation problem.

These might sound like complicated ideas, but this Austrian primer by Thomas C. Taylor will introduce you in a comprehensive, step-by-step way. (This is the best free introduction I could find, but if you find this too complicated and don’t mind purchasing your book, I highly recommend Choice by economist Bob Murphy.) 

The Austrian analysis uses as its data human nature and the realities of the human predicament. Individual human values and human actions, amidst limited means including perceived knowledge, are placed at the center of economic science. The factors of human error, the uncertainty of the future, and the inescapable passage of time must receive their due attention. This analytical approach cuts through the seeming complexities of an advanced market economy and provides a basic understanding of the economic process by examining essential market elements. Dispelled is any mystique surrounding the economy, market prices, business profits and losses, interest rates, inflation, and economic recessions and depressions. These phenomena are not inexplicable nor without cause, as will be shown in subsequent sections.

5) “Foundations of Austrian Economics” – Israel Kirzner

Lastly, if you would like a deeper dive into Austrian economics, this compilation of FEE lectures and articles by Austrian economist Israel Kirzner will further cement your understanding. Kirzner will provide you with a brief history of Austrian economics, a basic understanding of microeconomics, the importance of entrepreneurship, and the unique history FEE has played in the development of the Austrian school. If you’re still hungry after this, I recommend some more advanced readings, like Ludwig von Mises’s Human Action or Liberalism.

The systematic character of the market process derives, in the Austrian view, from the interplay of the actions of entrepreneurial human beings. Entrepreneurs act imaginatively and creatively, seeking to identify and to grasp market profit opportunities (generated by earlier entrepreneurial limitations of vision). As a result of the interplay of such entrepreneurial acts of vision, product prices and quantities of product offered for sale tend to be nudged systematically in the direction of the market-clearing price/quantity configuration.