A Reading List For The Economics Of Ideas

Ramblings

from the a-bibliography dept

While the core of my series of posts on economics of ideas and content may now be done, there are some follow-ups and other discussions I hope to add as we go forward. However, to kick off that next section, I’m going to do an “easy” post and highlight some of what I’ve been reading to help inform these posts. This isn’t a true “bibliography” of the ideas that went into this post — as these are topics I’ve been studying for about a decade. This is really a limited snapshot. To be totally honest, this list effectively makes up the books stacked on my desk — meaning I’ve either been reading them lately or using them for reference. Not all of the books agree with what I’ve been saying and many disagree. However, they all have been useful in understanding and thinking about the nature of economics as it applies to ideas and innovation.

Economic History

• The Worldly Philosophers: The Lives, Times And Ideas Of The Great Economic Thinkers by Robert L. Heilbroner. The first book I recommend to anyone who is interested in economics. Goes through the history of the different major economists while being quite entertaining at the same time. This is where I found that amazing story about 17th century French button-makers that sounded so much like the RIAA of today.
• The Wealth of Nations by Adam Smith. Going right back to the beginning of the study of economics. Not an easy read, but if you’re willing to slog through, quite interesting (and in many ways different than what you might expect).
• On The Wealth of Nations by P.J. O’Rourke. For those of you who don’t want to slog through the real version, read about P.J. O’Rourke trying to slog through it for you. Not a real substitute for the original, but a good look at the way a modern believer in the free market looks at Smith’s work.
• Knowledge and the Wealth Of Nations: A Story of Economic Discovery by David Warsh. An absolutely fantastic read. Well written and engaging. The first half is a perfect complement to Heilbroner’s book above, but with more of a focus on how the famous economists dealt with the issue of the economics of knowledge and growth. The second half gets you caught up on more modern economists and theories, though (I think) gives too much credit to Paul Romer. Romer is a great economist, has done incredibly important work in the field of economics and knowledge, and will likely win the Nobel Prize he deserves, but Warsh seems to put him on too high a pedestal, while brushing off some of the contributions of others in this field.
• The Lever of Riches: Technological Creativity and Economic Progress by Joel Mokyr. A fascinating walk through the history of technological innovation and how it’s tied to economic growth.
• Inside the Black Box: Technology and Economics by Nathan Rosenberg. First read this a dozen years ago, and it was one of the books that started me down this path, as it was one of the first times I saw an economic discussion that didn’t just throw “technology” in as a resource like capital and labor, but recognized that technology had different properties that needed to be explored more fully.
• How We Got Here: A Slightly Irreverent History of Technology and Markets by Andy Kessler. As described by Kessler, this is the book he wished someone had handed him before he went off to college, in order to catch him up on the history of both technology and markets. Not only a great way to learn from history so as to repeat it, but also a great lesson in how innovation (in both technology and markets) really is cumulative, with innovation continually building on innovation.
• Industrialization without national patents: the Netherlands, 1869-1912; Switzerland, 1850-1907 by Eric Schiff. It’s tough to find copies of this one these days, but a very interesting study in how the Netherlands and Switzerland joined the industrial revolution while consciously saying no to a national patent system.
• Zero: The Biography of a Dangerous Idea by Charles Seife and The Nothing that Is: A Natural History of Zero by Robert Kaplan. Not really about economic history, but two separate books about the history of zero. I actually picked up both at a used book sale just for fun, as the idea that there was a “history” to the number zero seemed amusing. I had no idea it would play into these ideas until I was reading the Seife book on the flight to the Cato copyright conference and realized that it was the same confusion over the concept of zero that caused problems for so many years with math and physics that was now contributing to the problems some had understanding why it’s okay if some goods are priced as free.

Looking at Intellectual Property and Economics today:

• Against Intellectual Monopoly by Michele Boldrin and David K. Levine. Absolutely worth reading examination of the economics behind intellectual property, and how it’s consistently put in place to protect powerful interests, allowing them to stifle innovation, rather than encourage it.
• Innovation and Its Discontents: How Our Broken Patent System is Endangering Innovation and Progress, and What to Do About It by Adam B. Jaffe and Josh Lerner. As the subtitle describes. A detailed look at the patent system, focusing on what’s changed (and broken) over the past 25 years, with some policy recommendations on how to fix things. It’s a good read and is especially eye-opening when it comes to the impact of various changes in the patent system. However, its final policy recommendations are a bit weak and seem more of a hedge than something that would actually fix most of the problems.
• Steal This Idea: Intellectual Property Rights and the Corporate Confiscation of Creativity by Michael Perelman. A somewhat depressing look at the high costs of intellectual property laws on society, innovation and creativity. It’s a pretty damning assessment, showing how much damage is done by intellectual property laws. Where the book falls down, a bit, is then claiming that information falls totally outside traditional economics — something that I disagree with. Perelman also punts on policy recommendations, but given the claim that classical economics doesn’t work with information, that may be a good thing.
• Math You Can’t Use: Patents, Copyright, and Software by Ben Klemens. A look at why software patents are bad. Adds some more good arguments focused solely on software patents — though, if you agree that patents in general are problematic, many of these arguments are superfluous.
• Copyrights and Copywrongs: The Rise of Intellectual Property and How It Threatens Creativity by Siva Vaidhyanathan. Another look at problems in intellectual property law with a focus on copyright policy. This one is more focused on the cultural impact of copyright law, rather than the economic impact, but they’re obviously closely connected.
• Rational Exuberance: Silencing the Enemies of Growth and Why the Future Is Better Than You Think by Michael J. Mandel. A defense of the importance of economic growth, and a scathing attack on economists who ignore the role of technology innovation in driving growth.
• The Long Tail: Why the Future of Business Is Selling Less of More by Chris Anderson. You’ve been living in a cave if you haven’t heard about this one. The issues brought up here are important to the economics of ideas and information as well, showing how the removal of scarcity expands markets by opening up new opportunities, often in the aggregation of niche offerings.
• Wikinomics: How Mass Collaboration Changes Everything by Don Tapscott and Anthony D. Williams. To be honest, this one is a little too buzzwordy and a little too light in serious analysis to be all that useful. It makes a few good points, but I think is grasping at the wrong reasons for why certain things are happening, and that makes the book seem fluffier than it need be at some points.
• The Wealth of Networks: How Social Production Transforms Markets and Freedom by Yochai Benkler. Basically a better, deeper, meatier more thorough and useful version of Wikinomics. Not as easy to read, but much more to chew on here.
• Patent System For The 21st Century by the National Research Council. A report for the government on how to reform patent policy — much of which we’re now seeing in the various patent reform lawsuits that are flying around Congress. Like the reform proposals there’s some good in here, but a lot of it is just maddening because it seems likely to make the system worse.

Academic:

• Innovation and Incentives by Suzanne Scotchmer. A really fantastic textbook on the basic economics behind innovation and incentives. For what you might think is a dry subject matter, it’s quite readable. It highlights the economics involved in putting in place incentives for innovation and does so without an agenda, highlighting the various tradeoffs and the equations you’ll need to understand what’s happening.
• The Economic Structure of Intellectual Property Law by William M. Landes and Richard A. Posner. Another good textbook on the subject, focused more on the legal side of things, but explaining the economic impact of the laws. Not quite as easy a read as Scotchmer’s text, but still worth digging into if you’re really interested in the economics behind the policies.
• Collected Papers of Kenneth J. Arrow, Volume 4: The Economics of Information by Kenneth Arrow obviously. Not for the feint of heart, or someone who doesn’t really, really want to dig deep into equations, but Kenneth Arrow is considered (with good reason!) one of the foremost thinkers when it comes to the economics of information, and digging into his papers on the topic is quite useful in getting a really thorough understanding of the economics of information.

And, with that, my desk is clear (and my floor is covered in books…). There are also a ton of academic papers that are as, if not more, important than any of the books listed above, but maybe that’s a list for another time. As I said, this is certainly not an exhaustive list, so if you’ve got other recommendations of books that should be on this list (and should be on my desk), please let me know…