Books

Highlights, information and reviews of some of the best books and scholarly research in Economics, Finance, Sound Money, and Freedom.

Niall Ferguson’s “Harvard Theory” of money

The Ascent of Money, by Niall Ferguson (2008 The Penguin Press)

The Ascent of Money by Niall Ferguson carries the slogan “The Financial History of the World”. When reading this book, regard it as exactly this: a history lesson. It may even pass for an introduction to the history of finance. For those familiar with the topics, it may be a bit superficial and platonic, as 340 pages is no place for much detail and depth of analysis to the history of finance.

What you can take from this book are the facts that led to some of the biggest developments in finance and related crises in economic history. But be warned: do not buy into Ferguson’s notion that the government can run the economy, but perhaps more importantly, that the government can manage money supply. Ferguson takes as a given the government’s role in managing currencies, and fails even to discuss the developments of state involvement over the banking system through central banking and fiat money. Not once in a book of 340 pages about the history of finance are the words “fiat” and “money” mentioned in succession. Ferguson also sees fractional reserve banking as merely part of the continuous process of financial evolution, and no attention is paid to how the state now, through the central bank, controls banking.

Ferguson has meticulously researched and footnoted his work for those interested in further reading, but mostly fails to connect the dots between cause and effect of major financial crises, namely government intervention in the economy. For instance, it is frustrating to read him going on about how John Law created the French central bank, and with his new found power managed to take over numerous aspects of managing the government’s fiscus, but not once does Ferguson denounce this type of control over a free market economy. To Ferguson, the economy is something that must be managed, but it must just be done more prudently.

If you’re interested in learning about the broad history and evolution of finance, this is a good read. It is mostly fairly light reading and goes well before bed time or next to the pool. In conclusion, Ferguson has really wasted a good platform from which to explain some very important historical lessons to the layman.

A Classic for any era

Economics in One Lesson, by Henry Hazlitt (1946 Harper & Brothers)
The Ludwig von Mises Institute Edition, 2008
206 Page Hardback; $12.00
-Buy this book-

What an audacious title, and what a great book.

Henry Hazlitt’s 1946 classic, Economics in One Lesson, not only lives up to its title, it far surpasses it.  If this book doesn’t seriously rock your economic paradigm, you’re either think like Henry Hazlitt already, or you have locked yourself up in an ivory tower of permanent intellectual stubbornness.  Seeing that most people do not fit into either of these categories, this book should have a wide appeal.

In this highly enjoyable and quick-to-read classic, Henry Hazlitt systematically, logically, and yet with the utmost charm and dignity, destroys and discredits chapter by chapter the most popular and destructive economic fallacies, and provides beautifully simple and yet deeply profound insights into the workings of the real world.

The Mises Institute has re-published a rare gem of a book in Economics in One Lesson.   Some economists regard the book as the most important economics book ever written because of its potential to reach millions.  Indeed, one of the most important aspects of the book, and its most endearing, is that it is not written to the trained economist but to the layman, the average you and me out there trying to make sense of an unnecessarily complex world.  If you have even a smidgen of common sense, you’ll be able to fully comprehend Hazlitt’s uniquely clear and refreshing approach to economics.

Most importantly, as the Mises Institute points out,

“It’s still the quickest way to learn how to think like an economist”

Hazlitt states “the lesson” upfront: 

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

Economists have made economics a convoluted and unnecessarily difficult intellectual discipline.  Hazlitt shows that economics is in fact profoundly rooted in the most basic common sense, and he does so in a highly readable, logical, and consistent way.  After stating the lesson upfront, Hazlitt then spends the next 200 pages elaborating on his theme and one-by-one refuting the greatest economic fallacies of our age, using real life examples of some of key areas of economics such as prices, profits, labour, unions and wages, inflation and so on. 

As each chapter passes, another fallacy is destroyed, another myth is busted, and Hazlitt increasingly reveals himself as a genuinely brilliant economic thinker and conveyor of ideas.  Some of the more gripping chapters include his debunking of long held popular fallacies such as, The Broken Window, The Curse of Machinery, The Fetish of Full Employment, Do Unions Really Raise Wages?, and The Mirage of Inflation.

This book is truly indispensable to gaining or furthering your knowledge in economics, and more generally in understanding better the world around you.  If you haven’t read this book, you haven’t really engaged in economics.

With Christmas coming up, why not get yourself a copy, and give a copy away as a gift.  Your holiday reading will be most enjoyable.

-Buy this book-