2B RED: Commonsense economics🍋

Economics books for the uninitiated, but not for dummies

I am sometimes asked by a friend or colleague to recommend a book that might give them an introduction to economics, and some familiarity with the basic ideas. I resisted entitling this post "Economics for Dummies" — not a very flattering way to treat those genuinely seeking more knowledge and understanding of what must seem to them an arcane field.

So on the assumption that there may be one or two readers of 2B RED who have faced the same question, I shall dedicate this edition to offering some suggestions.

Let's start with what I would not recommend (it then gets better). I recently noticed an announcement for a new book by the journalist and NZ Herald business writer, Liam Dann. BBQ Economics: How money works and why it matters (Penguin Books, 2024). The title certainly sounded as if this might be one for the uninitiated. Upon opening this small volume, one is hit with a barrage of glowing endorsements from such economic luminaries as Sir John Key, Grant Robertson and Guyon Espiner. Seeing that Brad Olsen and Mary Holm also contributed to the publisher's hype, one is left wondering if they actually read it.

Goose Cove, Dusky Sound, Fiordland National Park. Dave Heatley

There are just too many wild and inaccurate assertions: "economics is just contemplating money;" "economics puts a price on deep human desires;" "economists are believers in ideology;" "opportunity cost ... is the opposite of sunk cost;". Not to mention errors: J.M. Keynes was certainly not a graduate of Oxford. All in all, a rambly disjointed attempt at economics for the masses — and while based on New Zealand history and examples, it is still one to avoid.

At that point I turned to another volume with surprisingly the same title. In Barbecue Economics (2012), Dick Gillette sets out to help the neophytes, and to a large extent succeeds. He covers the basics and then applies them to everyday public policy issues, oriented to the USA. Clearly written with a light touch of humour, its only downside is the first few chapters, which read like a watered down, introductory stage one economics text.

Ever since Tim Harford gave a keynote address at an NZAE annual conference, I have enjoyed following his writings and more recently podcasts from the BBC (Cautionary Tales). But for the beginner, it would be hard to go past his Undercover Economist (Abacus, 2010) The author draws on basic microeconomics, and reveals some of the grubby aspects of "guerrilla pricing" by such firms as Starbucks and Amazon.

The Economics of Public Issues has been around for many years, and the authorship has grown from the original North and Miller. It has been updated with each subsequent edition; the latest I can find is by Roger LeRoy Miller, Daniel K. Benjamin and Douglass North (Pearson, 19th edition, 2015). It comprises short chapters (three to five pages each) on the economics of, for example, salmon fishing, prostitution, crime prevention, and safety standards. Each is based on sound economic reasoning, without resorting to presenting microeconomics 101.

A golden oldie is Harry G. Johnson and Burton A. Weisbrod (eds.) The Daily Economist (Prentice Hall, 1973). Each chapter is authored by prominent economists (e.g. Anthony Downs, Ronald H. Coase). The chapters are organised into the sections that a newspaper would have had (assuming we still remember what a newspaper used to look like): Editorials; Business and Finance; Arts; Sports; Religion; Politics; and even Comics. At least six of the pieces are by Harry Johnson including The Economics of Student Protests and The Economics of Undertaking. All the chapters are highly accessible, non-technical discussions, many of which retain their relevance today.

The Armchair Economist: Economics and Everyday Life is a truly delightful read by Stephen E. Landsburg (Free Press, 2012). It's another great way to see how economics can help understand many of the common aspects of life. Why are seat belts deadly? Do government deficits matter? Why are failed executives paid so much? These are just a few of the chapters in this splendid volume. My favourite quote from the book is: "Economics is about incentives ... all the rest is commentary."

Let me conclude on a flippant (some would say irreverent) note with Angus Black’s A Radical's Guide to Economic Reality (Holt, Reinhart and Winston, 1970). Angus Black is a pseudonym for what was widely believed to be a PhD student in economics at the University of Chicago. So it is pure Chicagoan free market economics: one reviewer described the small volume (87 pages) as a "hip" version of Milton Friedman's Capitalism and Freedom. Chapter titles such as “Big Business or Screw the Customer and Full Speed Ahead” or “Our Tax System — A Field Day for the Rich” will give you a flavour of what to expect.

I particularly liked Angus Black’s chapter on grapes. Readers might recall the Great Grape Boycott campaign led by Cesar Chavez, to boycott Californian grapes in order to lead to better working conditions for Mexican farm workers. Black writes:

"I want to help the grape pickers, so I eat grapes for breakfast, grapes for midmorning snack, grapes for dinner, and grapes for that midnight raid on the ice box. In this way, besides the makers of Kaopectate [a medication for treating diarrhea and upset stomachs], I help grape pickers. How? Simply by raising the value of grapes and therefore increasing the demand for grape pickers."

By Grant Scobie

Sutherland Falls, Fiordland National Park. Sue Rundle