Reading List

Section I: The Economic Way of Thinking

1. Introduction

• *Hayek, F.A. “Introduction to Bastiat’s Selected Essays on Political Economy, Library of Economics and Liberty. Available online. 

• *Bastiat, Frederic. 1845. “Abundance and Scarcity,” Economic Sophisms, Chapter 1. Available online. 

• *Bastiat, Frederic. 1845. “Obstacle and Cause,” Economic Sophisms, Chapter 2. Available online.

• * Read, Leonard E. 1958. “I, Pencil,” The Freeman, December 1958. Available online. 

• *Hazlitt. Chapter One: The Lesson. 

OTHER MEDIA

• *VIDEO Clip: Anarchy is Not Chaos – 20 seconds atop the Arc de Triomphe. Available online.

1. Economic Evolution: Today’s Economy in Historical Perspective – The Record

• * Lucas, Robert. 2003. “The Industrial Revolution: Past and Future,” The Region, Annual Report of the Federal Reserve Bank of Minnesota. Available online.

• *Robert W. Fogel, 2005. "Reconsidering Expectations of Economic Growth After World War II from the Perspective of 2004," IMF Staff Papers, Palgrave Macmillan Journals, vol. 52(si). Available online.  

• * Toynbee, Arnold. 1884. Lectures on the Industrial Revolution in England: Popular Addresses, Notes and other Fragments. London: Rivingtons, pp. 85-93. Available online. Scroll down to Section VIII: The Chief Features of the Industrial Revolution. 

• *George, Rose. 2008. “In the Sewers,” in the Big Necessity, pp. 22-23. Scanned on Blackboard.

1. Economic Evolution: Today’s Economy in Historical Perspective – The Ideas

• * Heilbroner, Robert. 1999. “The Economic Revolution,” The Worldly Philosophers, Chapter II, pp. 18-41. Scanned and on Blackboard.

• * Marx, Karl and Friedrich Engels. 1848. The Manifesto of the Communist Party. Read the Preface, Section I (Bourgeois and Proletarians) and the last 5 paragraphs of the book. Available online.

• * Lerner, Abba. 1963. “Review of Capitalism and Freedom by Milton Friedman.” American Economic Review, Vol. 63, No. 3, pp. 458-60. Available online.

• *McCloskey, Deirdre, 2011. “Saints, Sweet Talk and the Madwoman in the Economics Department: An Interview with Deirdre McCloskey,” Online

OTHER MEDIA

• *Image: The only thing you need if you travel through time. 

• *Why Most Economics Cannot Explain the Modern World. Watch the video summarizing Deirdre McCloskey’s book, Bourgeois Dignity.

• *EconTalk Podcast: Arnold Kling on From Poverty to Prosperity, Library of Economics of Liberty. December 14, 2009. Available online. 

• *Full Length Video: The Industrial Revolution. This is a video in three parts – each part is less than an hour and each can be viewed in streaming format on the course Blackboard site.
• Part One: The Great Discontinuity
• Part Two: Freedom Under the Law
• Part Three: A Magnificent Century

• *Youtube Clip: Everything is Amazing Right Now and Nobody is Happy. Available online.

• *Youtube Clip: Can You Spot the Billionaire? Available online.

• *Youtube Clip: 200 Years That Changed the World (Hans Rosling). Available online. 

Here is a nice transition piece that takes us to the next section, but also could very well fit in the section on the Economics of Government or even a Requiem and retrospective on the entire course. I don’t know where best to put it. For some economists, this is one of the best essays ever written, and it was written over 170 years ago.

• *Macaulay, Thomas Babington. 1830. “Southey’s Colloquies on Society,” Available online.

1. Economics as a Science: Modeling, Theories and Policies

• *Roberts, Russell. 2010. “What is Economics Good For?” Café Hayek, January 2011.

• *Buchanan, James. 1964. “What Should an Economist Do?” Southern Economic Journal 30, January 1964: pp. 213-222. Available online. 

• * Peirce, Charles Sanders. 1931. “Morality and Sham Reasoning,” The Collected Papers Vol. I: Principles of Philosophy. Available online.

• * Manzi, Jim. 2010. “What Social Science Does—and Doesn’t—Know.” City Journal, Vol. 20, No. 3, Summer 2010. Available online.

1. Basic Economic Principles

• *Hazlitt, Chapter 2: The Broken Window. 

• *Hazlitt, Chapter 3: The Blessings of Destruction. 

• * Bastiat, Frederic. 1845. “Effort and Result,” in Economic Sophisms, First Series, Chapter 3. Available online.  

• * Bastiat, Frederic. 1845. “What is Seen and What is Not Seen,” in Selected Essays on Political Economy. Available online.  

• * Buchanan, James. 1969. "Preface," Cost and Choice: An Inquiry in Economic Theory. Available online. 

OTHER MEDIA

• *Munger, Michael. 2006. “Ticket Scalping and Opportunity Cost,” EconTalk podcast. Podcast April 10, 2006. Available online.

• *War, Terror and Disaster is Good for the Economy, Really? Watch a short video here in case you do not wish to read all of Bastiat.

1. Ethical Foundations of Commercial Society

• *Bastiat, Frederic. 1845. “Two Systems of Ethics,” in Economic Sophisms, Second Series, Chapter 2. Available online.  

• *Bastiat, Frederic. 1850. “Conclusion to Part I,” in Economic Sophisms. Available online.

• * Appiah, Kwame Anthony. 2006. “The Case for Contamination,” New York Times Magazine, January 1, 2006. Available online.

• *Sandel, Michael J. 1998. “What Money Can’t Buy: The Moral Limits to Markets,” Tanner Lectures on Human Values. Brasenose College, Oxford May 11 and 12, 1998. Available online.

• *Wight, Jonathan. 2007. “The Treatment of Smith’s Invisible Hand.” Journal of Economic Education. Summer 2007. Vol. 38, Iss. 3; pp. 341-358. Available online.

1. Scarcity, Choice, Specialization and Exchange 

• *Hazlitt, Chapter 7: The Curse of Machinery

• *Hazlitt, Chapter 8: Spread the Work Schemes

• *Hazlitt, Chapter 11: Who’s “Protected” by Tariffs?

• *Krugman, Paul. “Ricardo’s Difficult Idea.” Online.

• *Krugman, Paul. “In Praise of Cheap Labor.” Online. 

• *Krugman, Paul. “A Raspberry for Free Trade.” Online. 

• *Bastiat, READ ALL OF ECONOMIC SOPHISMS … but perhaps these chapters …
• Trade is not war – Domination by Labor
• The Right Hand and the Left.
• The Negative Railroad.
• Something Else. Crusoe v the Nation.
• The Candlemakers’ Petition 

• * Smith, Adam. 1776 (6^th edition: 1791). “Book I, Chapter II: Of the Principle which gives Occasion to the Division of Labour,” in An Enquiry into the Nature and Causes of the Wealth of Nations. London: A Strahan. Available online.

• * Smith, Adam. 1776 (6^th edition: 1791). “Book IV, Chapter II: Of Restraints upon the Importation from Foreign Countries of such Goods as can be Produced at Home,” in An Enquiry into the Nature and Causes of the Wealth of Nations. London: A Strahan. Available online.

• *Bastiat, Frederic. 1845. Economic Sophisms, First Series Chapter 4 through 23, but particularly Chapter 6, 7 (Candlemakers’ Petition) and 17. Series 2, Chapter 16. Available online.

• *Ricardo, David. 1817. "On Foreign Trade," in On the Principles of Political Economy and Taxation, Available online. Ricardo’s famous insights into comparative advantage.

OTHER MEDIA

• *Blog Entry: Rizzo, Michael, “Moving Trucks and Medical Care,” The Unbroken Window, June 16, 2009.

• *Images: The 100 Mile Suit.

• *Interesting Website: The Toaster Project.

• *Rizzo, Michael. 2008. “Should You Buy Local?” American Institute for Economic Research. Free version available online. 
• Blog Entry: Rizzo, Michael, “On My Way Into Work,” The Unbroken Window, August 17, 2009.

• *TedTalk: Alex Tabarrok – How Ideas Trump Crises – and Walls Come Crumbling Down

1. Property Rights, Institutions, and Economic Freedom (We May Skip this Section Formally, But I Will Send Some Summary Notes to the Class if We Do)

• * Friedman, Milton. 2002. “The Relation Between Economic Freedom and Political Freedom,” Capitalism and Freedom, Chapter 1, pp. 7-21. PDF posted to blackboard site.

• * de Soto, Hernando. 2003. The Mystery of Capital:  Why Capitalism Triumphs in the West and Fails Everywhere Else (New York:  Basic Books, 2003), pp. 41-62. PDF posted to blackboard site.

• * Alchian, Armen A. “Property Rights,” The Concise Encyclopedia of Economics. Available online.

• *Hazlitt, Chapter 9: Disbanding Troops and Bureaucrats

• *Bastiat, Frederic. 1848. The Law, Available Online. 

• *Palmer, Tom. 2004. “The Role of Institutions and Law in Economic Development,” conference presentation at A Liberal Agenda for the New Century: A Global Perspective,” cosponsord by the Cato Institute, the Institute of Economic Analysis and the Russian Union of Industrialists and Entrepreneurs, April 8-9, Moscow, Russian Federation.  Available online.

OTHER MEDIA

• *Documentary Video: Commanding Heights, Episode One: The Battle of Ideas

Section II: Analytical Tools of the Economist 

1. Supply and Demand

• *Sowell, Basic Economics, Chapter 2, “The Role of Prices.”

• *Rothbard, Murray. “Determination of Price: Equilibrium Price,” in Man, Economy and State, Volume 1, pp. 91-108. Scanned and uploaded to Blackboard.

• * Radford, R.A. 1945. “The Economic Organization of a P.O.W. Camp.” Economica, XII, No. 48, New Series, pp. 189-201. Available online.

• * Rizzo, Michael. “Riffing on Gas Price Complaints,” The Unbroken Window, August 8, 2005.

• * Bastiat, Frederic. 1845. “High Prices and Low Prices,” in Economic Sophisms, Second Series, Chapter 5. Available online.  

1. Equilibrium and the Price System

• * Hazlitt, Chapter 15: How the Price System Works

• *Hazlitt, Chapter 17: Government Price Fixing

• * Smith, Adam. 1776 (6^th edition: 1791). “Book IV, Chapter II: Of Restraints upon the Importation from foreign Countries of such Goods as can be produced at Home,” in An Enquiry into the Nature and Causes of the Wealth of Nations. London: A Strahan. Available online – particularly paragraphs 8 and 9. (Invisible Hand)

OTHER MEDIA

• *Adler, Max. 2009. “Bethpage Gray,” Golfworld  May 25, 2009. Available online. 

• *Reynolds, Glen. 2010. Progressives Can’t Get Past the Knowledge Problem. Washington Examiner, April 4, 2010. Available online. 

• *The Onion Movie: “Obesity Price Controls.”

1. Supply and Demand Applications

• *Sowell, Basic Economics, Chapter 3, “Price Controls.”

• *Bastiat, Frederic. 1845. “The Tax Collector,” in Economic Sophisms, Second Series, Chapter 10. Available online.  

• *Hazlitt, Chapter 5: Taxes Discourage Production

• *Hazlitt, Chapter 6: Credit Diverts Production

• *Hazlitt, Chapter 18: What Rent Control Does

• *Hazlitt, Chapter 19: Minimum Wage Laws

OTHER MEDIA

• *Video: This is Your War on Drugs. Youtube.

• * Video: The Hidden Compliance Cost of the Internal Revenue Code. Youtube.

• * Schiff, Peter. 2010. “Congress Sacks Samoan Economy,” Advisor Perspectives, January 23, 2010. Available online. 

• * Boston Globe: Jacoby, Jeff. 2009. “A Deadly Organ Donor System.” Boston Globe, July 5, 2009. Available online.

1. Evaluation of Market Mechanism

• *Hazlitt, Chapter 21: Enough to Buy Back the Product

• * Senior, Nassau. 1836. “Value of the Forces of Supply and Demand,” in An Outline of the Science of Political Economy. New York: Augustus N. Kelly, pp. 13-17.  Scroll down here to the section on value. (Perfect Competition).

OTHER MEDIA

• *Documentary Video: Commanding Heights, Episode Two: The Agony of Reform

Section III: Profits, Losses and Entrepreneurialism

1. Simple Theory of the Firm

• *Sowell, Basic Economics, Chapter 5, “The Rise and Fall of Business.”

• *Hazlitt, Chapter 22: The Function of Profits

• * Schumpeter, Joseph. 1942 (3^rd edition: 1950). Capitalism, Socialism, and Democracy. New York: Harper Torchbooks, Harper and Row Publishers, pp. Chapter VII – Creative Destruction. In PDF form on Blackboard Course Reserves. 

• *Graham, Paul. 2004. “How to Make Wealth,” in Hackers and Painters, O'Reilly Media, Inc. Available online.

OTHER MEDIA

• *Friedman, Milton. 1970. “The Social Responsibility of Business is to Increase its Profits,” New York Times Magazine. Online.
  
• *Rethinking the Social Responsibility of Business, Contra Friedman. Reason.
  
• *Taco Bell and the Golden Age of the Drive Thru. A pretty incredible story. Bloomberg, May 5, 2011.
  

1. The Entrepreneur  

• *Sowell, Basic Economics, Chapter 6, “The Role of Profits – And Losses.”

• * Kling, Arnold and Nick Schulz. 2010. “The Heart That Pumps Innovation,” From Poverty to Prosperity, Chapter 5, pp. 181-198. PDF posted to blackboard site. 

• *Hazlitt, Chapter 14: Save the X Industry

• *Bastiat, Frederic. 1845. “The Physiology of Plunder,” in Economic Sophisms, Second Series, Chapter 1. Available online.  

• * Mill, John Stuart. 1849. “Competition and Custom,” in Principles of Political Economy. London: Longmans Green, pp. 242-47. Book II, Chapter IV: Available online. 

OTHER MEDIA

• * Trial, Error and the God Complex. See Tim Harford’s terrific Ted Talk.
  
• * Video: The Amazing Ford Model T. Youtube.

• * Video: What’s at Stake for Entrepreneurs? Look what these two people do just so you can enjoy some good wine and coffee. There goes that evil capitalism thingy again.
  

Section IV: The Economics of Government (We Are Unlikely to Get This Far)

1. Regulation, Freedom of Association

• *Sowell, Chapter 7, “Big Business and Government.”
  
• *Sowell, Chapter 8, “An Overview” (of Industry and Commerce)
  
• * Zupan, Mark. 2011. “The Virtues of Free Markets,” Cato Journal, Vol. 31, No. 2 (Spring/Summer 2011). Draft uploaded to blackboard. (Note, Professor Zupan is the Dean of the Simon School of Business at the University of Rochester).
  

OTHER MEDIA

*Documentary Video: Commanding Heights, Episode Three: The New Rules of the Game.

1. Government Incentives and Private Incentives: A Public Choice Primer

• *Shughart, William. “Public Choice,” Concise Encyclopedia of Economics.

• * Stigler, George. 1984. “A Sketch of the History of Truth in Teaching,” in The Intellectual and the Marketplace, Enlarged edition, Chapter 6. Cambridge, MA, and London, England: Harvard University Press, pp. 43-50. Available online.

• * Munger, Michael. 2006. “Two Steves and One Soichiro: Why Politicians Can’t Judge Innovation,” feature at the Library of Economics and Liberty. Available online. 

1. The Distribution of Income 

• * George, Henry. 1879. “Preface,” Progress and Poverty. New York: Modern Library, pp. xii-xvii. Available online.

• Harriss, C. Lowell. “How to Make Slums and Create Barbarians,” Economic Education Bulletin. May 1981. American Institute for Economic Research: Great Barrington, MA. Available online.

Section V: A Requiem for the Economic Way of Thinking?

• *Hazlitt, Chapter 25: The Lesson Restated

• *Hazlitt, Chapter 26: The Lesson After 30 Years

• *Stigler, George, 1963. “The Intellectual and the Marketplace,” in The Intellectual and the Marketplace, Cambridge, MA: Harvard University Press. Available online.

• *Sowell, Chapter 23, “Myths About Markets”
  
• *Sowell, Chapter 24, “Non-Economic Values”
  
• *Sowell, Chapter 25, “Parting Thoughts”
  
• * McRaney, David. 2011. “The Illusion of Asymmetric insight,” from You Are Not So Smart. Available online.
  

OTHER MEDIA

• * Rizzo, Michael. 2011. “The Problem With Economics,” Speech Delivered to the AHI Annual Carl Menges Colloquium, April 14, 2011. Available online.