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Thursday, February 1, 2001

Your One-Stop Source for Sound Economics

A Brief Review of Economics Dictionaries

Mark Skousen (; [email protected]) is an economist at Rollins College, Department of Economics, Winter Park, FL 32789, a Forbes columnist, and editor of Forecasts & Strategies. His new book, The Making of Modern Economics, will be published this month by M. E. Sharpe.

“No dictionary of a living tongue can ever be perfect.”

—Samuel Johnson

Walk into any bookstore and you’ll usually find two or three dictionaries of economics. Like any scientific discipline, economics has its own insider terminology, schools of thought, and famous experts. If you haven’t taken a course in economics, you may need a reference guide when a writer uses the term externality, liquidity preference, Laffer curve, or Keynesian economics. An article in Ideas on Liberty might refer to the Coase theorem. Who is Coase and what is his theorem? It’s time to buy a good economics dictionary.

There are several dictionaries to choose from. You want one that is comprehensive and objective. Not all dictionaries are alike.

Let’s start first with the ones you ought to avoid. I place The Routledge Critical Dictionary of Global Economics in this negative category. Unfortunately, the editor, Robert Beynon, is a journalist who either has limited knowledge or is highly prejudiced. The focus is on globalization, the end of communist command economies, and the technological and financial revolutions. Certainly Milton Friedman and the Chicago school deserve attention in these fields, but no entry exists for either one. In fact, while the book has separate entries on John Maynard Keynes, Karl Marx, Adam Smith, and David Ricardo, it offers none for Irving Fisher, Gary Becker, Ludwig von Mises, and F. A. Hayek. The latter two are obvious omissions since they predicted the collapse of Soviet-style central planning and have much to say about global competition. Moreover, why would a book highlight MIT’s Robert Solow and Franco Modigliani and leave out their better known colleague Paul A. Samuelson? Skip this one.

The New Palgrave: A Socialist Plot?

Routledge isn’t the only one putting out an incomplete and biased dictionary. Another popular one is The New Palgrave, a four-volume encyclopedia written by top economists in the late 1980s. The set is now available in paperback for $225. Don’t waste your money. First, most of the articles are too advanced for the non-economist and even many professional economists. Second, The New Palgrave gives a hopelessly distorted picture of sound economics. Every article on Marxism is written by an avowed Marxist. And the entry on capitalism isn’t written by Friedman or Hayek, but socialist Robert Heilbroner, whose bibliography at the end of the subject excludes the works of Friedman, Hayek, Mises, and other defenders of capitalism. There’s not even a passage on supply-side economics. Sure, there are a few articles written by Friedman, Murray Rothbard, Israel Kirzner, and Roger Garrison, among others, but they are few and far between. It’s tragic that this biased reference work is found in virtually every university library in the world.*

Okay, what is worth buying? Believe it or not, Routledge! The same publisher that offers the incomplete, biased Global Economics also publishes the superior Routledge Dictionary of Economics (1995, paperback edition). The right hand must not know what the left hand is doing. Donald Rutherford, a lecturer at the University of Edinburgh, has worked hard to create a comprehensive, objective work. Many dictionaries leave out members of the Austrian and Chicago schools, but not this one. Routledge Dictionary offers separate biographies of Austrians (Menger, Böhm-Bawerk, Schumpeter, Mises, and Hayek) and Chicagoans (Friedman, Stigler, Knight, and Simons).

Another good source is the Penguin Dictionary of Economics, now in its fifth edition, but it is printed in smaller print with fewer illustrations.

You Can’t Beat This One

My all-time favorite choice for a single comprehensive volume on sound economics is The Fortune Encyclopedia of Economics (Warner Books, 1993). Editor David R. Henderson did a masterful job of collecting the views of 141 economists on a wide variety of subjects, including biographies, the major schools (Austrian, Monetarist, Keynesian, Marxist, Supply Side, and Neoclassical), and specific issues such as free trade, privatization, the national debt, antitrust, and environmentalism. I give it an A+. It should replace The New Palgrave on college reference shelves. Only one problem: It’s out of print. To obtain a copy, check or

* For an insightful review, see Mark Blaug, Economics Through the Looking Glass: The Distorted Perspective of the New Palgrave Dictionary of Economics (London: Institute of Economic Affairs, 1988).

  • Mark Skousen is a Presidential Fellow at Chapman University, editor of Forecasts & Strategies, and author of over 25 books. He is the former president of FEE and now produces FreedomFest, billed as the world's largest gathering of free minds. Based on his work “The Structure of Production” (NYU Press, 1990), the federal government now publishes a broader, more accurate measure of the economy, Gross Output (GO), every quarter along with GDP.