Arnold Kling  

Greg Mankiw's Problem

Some Morning Links... Antitrust Through the Lens of ...

No, it's not that he's going to get fired by Harvard for casually invoking the Great Unmentionable to explain intergenerational income correlations. It's that he is teaching a seminar at Harvard for first-year economics students. What 10 books to assign?

Two of the books on his list are the two that I thought I would like to have my high school students read--Animal Spirits by Akerlof and Shiller and Capitalism and Freedom by Milton Friedman. But this summer I decided that Friedman's book does not hold up well. [UPDATE: What I mean by "does not hold up well" is that I cannot present it to high school students as something they can relate to. Way too much monetary theory. Outdated discussion of Civil Rights. Better to have a book that is self-explanatory, rather than one where you need a lot of historical background to understand the context.] My inclination is to replace it with another book on Mankiw's list, The Price of Everything by Russ Roberts. Incidentally, Mankiw includes another Masonomist work, Bryan's Myth of the Rational Voter.

If I could pick ten, they would be, in addition to Akerlof-Shiller and Roberts (not in order of priority):

3. The Wordly Philosopophers, by Heilbroner. Also on Mankiw's list.
4. The Mind and the Market, by Jerry Muller. Another history of economic thought, more difficult than Heilbroner.
5. A Random Walk Down Wall Street, by Burt Malkiel. Mankiw is also a Malkiel fan, although Malkiel does not make his list.
6. The Power of Productivity, by William Lewis
7. Poverty and Discrimination, by Kevin Lang
8. Manias, Panics, and Crashes, by Charles Kindleberger
9. Fool's Gold, by Gillian Tett
10. Farewell to Alms, by Gregory Clark

Honorable mentions include Myth of the Rational Voter, Edward Leamer's Macroeconomic Patterns and Stories, William Easterly's White Man's Burden, Amar Bhide's Origins and Evolution of New Businesses, Carl Shapiro and Hal Varian's Information Rules, Perry Mehrling's Fischer Black and the Revolutionary Idea of Finance, and my own Crisis of Abundance.

Relative to Mankiw's list, mine is lighter on political economy and microeconomics. It is heavier on charts and data-driven reasoning (Clark, Lewis, Lang) and on finance and financial crises.

Comments and Sharing

COMMENTS (14 to date)
Mike writes:


I hope you are not going to leave us hanging on your off the cuff comment:

Capitalism and Freedom by Milton Friedman ... I decided that Friedman's book does not hold up well.

What do you mean by this? All classics have an element of not holding up well regarding contemporary examples (Wealth of Nations) but that would be expecting too much. While others just flat out don't hold up well but are important none the less (Communist Manifesto or Das Kapital).

How can you be dismissive of the book that introduced us to the all volunteer army, educational vouchers, the flat tax, and the negative income tax to name a few. One of the above would be a lifetime achievement for most of us.

Do you mean your student's interest can not be held by Friedman. Hope you elaborate. You are treading on the saints.

Patrick R. Sullivan writes:

I agree with Mike about Capitalism and Freedom. Maybe Friedman was too successful; we've forgotten what the world of 90% marginal tax rates and conscription was like.

And, his demolition of occupational licensure laws should be center stage in discussions of real reform of medical care.

As for 'Information Rules', it is highly misleading on the QWERTY thing (Varian now knows it too).

I'd replace it with Stan Liebowitz's 'Rethinking the Network Economy' or his and Steve Margolis's 'Winners, Losers, and Microsoft'.

aaron writes:

I also recommend throwing in something on efficiency.

Efficiency in the ergonomic sense, not economic.

The Goal is a great, easy, fun intro.

The importance to the economy has been very much neglected.

david writes:


I'm not Arnold, but I will venture to guess that Friedman's book doesn't hold up well principally because his most promising suggestions have already been adopted (e.g., ending the draft, substantial deregulation), while some parts are historically deeply embarrassing (e.g., opposition to the Civil Rights Act). The remaining interesting issues are mired in fifty years of research that the book (obviously) has no chance to mention or refute.

All in all, what's surprising is that the book was recommended for any of this past decade. For students in economic history, sure, but for anyone else a book with a chapter dedicated to ending Bretton Woods is just going to be really dated.

Even for libertarians, it's easy to forget just how much has changed since 1962; "Capitalism and Freedom" has all sorts of bits about "technical monopolies" and "neighbourhood effects". Political battle-lines have shifted so far in favor that libertarians now argue that no substantive natural monopolies exist, and externalities are all removable via Coase. Ah well.

Adam writes:

I'd substitute Skousen's The Making of Modern Economics for Heilbroner. Skousen is factual and fascinating; Heilbroner is boring and ultimately a dirigiste. Also, you've over-represented concerns with the stock market. How about something from behavioral economics and psychology? Gene Heyman's Addiction as a substitute for Tett, perhaps? Also, there should be something about the ethics of markets--Atlas Shrugged?

Milton Friedman, one of the few great economists of the 20th century? Yes, he needs to be a part of the class. But you could bring via videos. The videos on I, Pencil and Colonialism are the classic Friedman in his public intellectual role. Much better than the economist as technician.

Scot writes:


You need to get an affiliate link for your book recommendations. I bought The Best and the Brightest on your recommendation last week. You should have gotten some commission!

Mike writes:


Thanks for the clarification. I was hoping that was your point of view. When I first read C&F in college (40 years ago) I couldn't relate well to it even then. I re-read it about five years ago and it was like the clouds parting. I guess it is like learning how smart your parents got as you got older.

To today's high school students the volunteer army, educational vouchers, flat tax and negative income tax, if they know anything about them, must seem so establishment and, therefore, boring. I admire your commitment to educating high school kids. I wish I had the opportunity to learn economics in high school.

Rama Gopal writes:

I would add Wealth and Poverty of Nations by David Landes to your list. Adam says Heilbroner "is boring and ultimately a dirigiste". The dirigiste part is right. But Helbroner boring? I recollect an obituary by a libertarian writer who complains that no libertarian has yet authored a book on economic thought as interesting as Heilbroner's. Skousen consciously tries to be as interesting as Heilbroner but I think the market will continue to vote for the dirigiste work for a long time to come.

Bob Murphy writes:

No Hazlitt? Is he too cool for school? I haven't read all the books on the lists, but I fear they are too detailed and some students will get lost in the forest. Imagine if just 50% of all undergrads really "got" the broken window fallacy. I think I would lock that in right now, in exchange for all the rest of undergrad economics education.

Mike writes:

I agree "The Wealth and Poverty of Nations" should be on the list.

I'd pick "Free to Choose" over "Capitalism and Freedom." The writing is more enjoyable. The arguments tighter.

For first year students, even at Harvard, I'd throw in some Bastiat as well as Henry Hazlitt's "Economics in One Lesson."

David writes:

"3. The Wordly Philosopophers, by Heilbroner. Also on Mankiw's list."

Heh. Yep, them Philosopophers shur r wordly. ;)

hacs writes:

"No, it's not that he's going to get fired by Harvard for casually invoking the Great Unmentionable to explain intergenerational income correlations."

It is a question of time to test those plausible conjectures.

Assumption-Free Estimation of Heritability from Genome-Wide Identity-by-Descent Sharing between Full Siblings

Peter M. Visscher*, Sarah E. Medland, Manuel A. R. Ferreira, Katherine I. Morley, Gu Zhu, Belinda K. Cornes, Grant W. Montgomery, Nicholas G. Martin


Quantitative geneticists attempt to understand variation between individuals within a population for traits such as height in humans and the number of bristles in fruit flies. This has been traditionally done by partitioning the variation in underlying sources due to genetic and environmental factors, using the observed amount of variation between and within families. A problem with this approach is that one can never be sure that the estimates are correct, because nature and nurture can be confounded without one knowing it. The authors got around this problem by comparing the similarity between relatives as a function of the exact proportion of genes that they have in common, looking only within families. Using this approach, the authors estimated the amount of total variation for height in humans that is due to genetic factors from 3,375 sibling pairs. For each pair, the authors estimated the proportion of genes that they share from DNA markers. It was found that about 80% of the total variation can be explained by genetic factors, close to results that are obtained from classical studies. This study provides the first validation of an estimate of genetic variation by using a source of information that is free from nature–nurture assumptions.

Drewfuss writes:

Capitalism: The Unknown Ideal (Ayn Rand with co-authors).

If only for the chapter by Alan Greenspan on gold and the Fed.

Mark Bahner writes:
...while some parts are historically deeply embarrassing (e.g., opposition to the Civil Rights Act).

Why is opposition to the Civil Rights Act "historically deeply embarrassing"?

Here is the initial Wikipedia paragraph on the 1964 Civil Rights Act:

The Civil Rights Act of 1964 (Pub.L. 88-352, 78 Stat. 241, July 2, 1964) was a landmark piece of legislation in the United States that outlawed racial segregation in schools, public places, and employment. Conceived to help African Americans, the bill was amended prior to passage to protect women, and explicitly included white people for the first time. It also created the Equal Employment Opportunity Commission.

I'm not embarrassed to say I oppose that in 2009.

The U.S. federal government has no Constitutional authority to "outlaw racial segregation" by any private entity. The Ninth and Tenth Amendments protect the right of employers and property owners to discriminate on whatever basis they choose (race, sex, sexual orientation, creed, national origin, weight, height, age, etc.). I don't see why defending the rights of business and property owners should be "historically deeply embarrassing."

All people who support the Rule of Law should oppose the 1964 Civil Rights Act's provisions that illegally infringe on the rights of business and property owners.

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