The most recommended books on the free market

I love the way he explores the interplay between economic ideas and political institutions that culminated in the triumph of market forces in the aftermath of the Cold War. Yet, Gerstle’s most interesting insights lie at the end of the book as he classifies Trump and Modi as ethnonationalist leaders of the same feather as China’s Xi Jinping and Russia’s Vladimir Putin.

Globalisation, however, has not necessarily reached its end, as it may simply be reframed to fit a world whose shape has yet to be defined.

If we want to reimagine capitalism as a system that does not destroy the planet and destabilize society, this must be enabled by corporations changing the way that they operate. Henderson’s Reimagining Capitalism gives us some principles for thinking about how to do this. A long-time innovation scholar, Henderson draws on her knowledge about how to succeed at organizational change to propose a more purpose-driven model of corporate action. Using numerous case studies of companies that have (partially) succeeded and those that have failed, she animates a number of principles for change. To start, such a model will require new metrics for social and environmental impact. This would involve more collaborative engagement amongst stakeholders to grow the economic pie and amongst companies to self-regulate in a more sustainable manner.

Particularly refreshing, at the end of the book, Henderson connects the macro conversation about economic and corporate change with a discussion… show more.

America is a fantastic country that has offered more opportunities to change one’s economic status than any other country. That being said, few understand why this has even been made possible by the Free Enterprise System and how it is at risk by careless policies, flippant politicians, and complacent citizens within their communities.

I no longer wanted to be a part of that group of people and figured who better to learn about economics than Milton Freidman. While this book is dense with information, the economic principles are articulated in such a straightforward fashion that even a college dropout like me can understand and apply them.

Frank explains why Darwin is a better guide than Adam Smith’s Wealth of Nations to the problems the economy raises for almost everyone. The most important market and the only market where almost everyone is a seller instead of a buyer is the labor market. Yet it is the one that Adam Smith got almost completely wrong and Charles Darwin got almost completely right. Frank shows us how the Darwinian process of the labor market makes employers rich at the expense of workers, and how they stitched their advantage into the “Right to Work” (at lower wages) laws.

Mises' warnings about socialism bringing about the end of civilization have entered popular lore a sort of common sense, so it's worthwhile to read the original.

This book is less a scientific analysis than an ode to market liberalism: to “the desperate struggle of lovers of freedom prosperity and civilization against the rising tide of totalitarian barbarism.” At stake is the very possibility of non-market modernity.

Mises argues that modern society cannot function without a market defined by acquisitive trade: individuals' peaceful cooperation hinges on their ability to make rational choices about their production and consumption of things, and such choices are possible only when a system of competitive market price expresses the true value of every commodity.

“The socialist order of society,” he warns, “is not realizable” and will lead to the collapse of (western) civilization itself: “Nomad tribes from the Eastern steppes would again raid and pillage Europe,… show more.

Mass democracy guided the 20th century. Socialists and liberals disagreed about what exactly a government “of, for, and by the people” would look like, but they agreed that, in principle, it was desirable.

Even the fascists agreed. “Fascism,” wrote Mussolini, “is the purest form of democracy if the nation be considered from the point of view of quality rather than quantity... a people, historically perpetuating itself; a multitude unified by an idea and imbued with the will to live.”

But by the end of the century, democracy gave way to another ideal: special “zones” punched holes in the image of a democratic nation state with micro-nations and gated communities, crypto-currencies and special economic zones, charter schools and AirBnB schemes.

Slobodian's Crack-up Capitalism traces the emergence of this new social ideal. It examines the theory and practice of privately managed spaces erected to protect capitalism from democracy, markets from politics, profit… show more.

Why do governments have to make markets work?

Well for one thing, firms might prefer to collude rather than to compete, if given the choice. So we need antitrust policy to make them compete.

Philippon surveys developments over the past few decades, demonstrating how the United States has weakened antitrust policy and enforcement while Europe has strengthened it.

He also looks at particular sectors, with a particularly compelling chapter on how the U.S. financial sector has grown without delivering more value to consumers and investors.

A key insight of economics is the power of markets to organize human affairs. The Machinery of Freedom takes that insight to the limit. How might society work if even governmental functions were organized using markets? Friedman’s answer will surprise and challenge you. And whether you come away convinced or not, you will come away with a better understanding of markets.

The Wealth of Nations is the foundational text of modern economics, reflecting – contrary to the common notion – the clearly national consciousness of its author and demonstrating that modern economic imagination (and activity) is a product of nationalism.

Its nationalist inspiration is the main reason I recommend reading it, for the commonplace interpretations of this classic miss this most interesting aspect of the work. In addition, it is a delightful text. 

Bastiat was a 19th-century French economist, writer, and politician. Economic Sophisms is a collection of short and enjoyable essays illustrating the case for free trade and attacking some economic misconceptions. Many of the essays’ themes and arguments are relevant today, and Bastiat’s critiques of big government are often witty.

In one essay, Bastiat presents a “candlemakers petition” to the parliament for protection against the unfair competition of sunlight, which was flooding the market with a superior product at virtually zero price. Modern critiques of zero price “monopolists” (e.g., Facebook or Google) should take note!

In What is Seen and Not Seen Bastiat introduces the “parable of the broken window” to show that economic resources are fundamentally scarce: resources expended on one activity are not available for others. Centuries later, many policymakers are yet to grasp this insight.