John B. Judis: The best books to help you make sense of Marx, Keynes, the Great Depression, and how we got where we are now
... 1. The current crisis. I was warning my colleagues of an encroaching disaster a year ago, because I was reading the columns and articles of Paul Krugman, Nouriel Roubini, Larry Summers, and Dean Baker. They were on top of this when Hank Paulson and Ben Bernanke were still telling everyone not to worry. Of the current books I've read (and I haven't read many), I'm very high on Financial Times columnist Martin Wolf's Fixing Global Finance, George Cooper's The Origin of Financial Crises, Jamie Galbraith's The Predator State, and Dean Baker's Plunder and Blunder. Wolf is terrific on the international currency mess--and the Financial Times is the paper to read--Cooper is first-rate on the irrationality of money and finance, Galbraith has a good explanation of how we got to where we are, and how to get out of it, and Baker is the expert on the housing bubble. I also liked Krugman's The Return of Depression Economics when it appeared almost ten years ago (Short take: If it could happen to Japan, it could happen to us). There is a new edition that incorporates some material about 2008, but I haven't read it.
2. John Maynard Keynes. Keynes is back in vogue, and rightly so. One economist--I can't remember who it was--recently warned against reading The General Theory of Employment, Interest, and Money because it was written strictly for economists. I don't agree at all. It's a very hard book, especially some of the middle sections, but worth reading and rereading. If you don't have energy for the whole thing, read the first three chapters, some of the middle chapters (7, 10, 16, and 18 are my suggestions) and the last three. I suggest, however, a guide. The best I've found is Dudley Dillard's The Economics of John Maynard Keynes, which, to my amazement, is still in print after sixty years. I also like Hyman Minsky and Paul Davidson's guidebooks to Keynes. But you've got to read Robert Skidelsky's three-volume biography of Keynes, Hopes Betrayed, The Economist as Savior, and Fighting for Freedom (also now available in an abridged one-volume edition). Believe me, this is one of the great biographies. The way he brings together Keynes, the gay aesthete of Bloomsbury, and Keynes, the economist and man of worldly affairs, is something to behold. Skidelsky's second volume is also the best introduction to Keynes's economics, because you learn that exactly those ideas you found mystifying or most difficult in Keynes were hotly debated between him and his colleagues.
3. The Great Depression. There have been a lot of books on this subject, but most of what I read I read decades ago, so I'm sure I'm going to overlook worthy choices. Still, there are two older books that continue to stand up. George Soule was an editor of The New Republic during the 1930s. He was also an economist and in 1947 published a study of the American economy from 1917 to 1929 entitled Prosperity Decade. Soule shows that well before 1929, there were rumblings of trouble in the American economy--not only in the stock market bubble, but in overcapacity in key industries like auto, and in the rise of technological unemployment. You'll see the surprising resemblance to our own decade, including an anticipatory recession in 1926 like the one in 2001. On the international crisis of the 1930s, I like Charles P. Kindleberger's The World in Depression, which I reread two months ago when I was writing about the current international imbroglio. I want also to mention an essay by Sklar in The United States as a Developing Country. In chapter five, "Some Political and Cultural Consequences of the Disaccumulation of Capital," Sklar puts forward the idea that during the 1920s, capitalism shifted from the accumulation to disaccumulation of capital. That's Marxist jargon, but what it means is that goods production began to expand as a function of the reduction rather than increase in labor-time and in the labor force. That created an enormous opportunity, but also a potential crisis. The depression of the 1930s, Sklar argues, was the first "disaccumulationist" depression. One of his former students, historian Jim Livingston from Rutgers, has put forward a similar analysis of the current recession....
Read entire article at New Republic
2. John Maynard Keynes. Keynes is back in vogue, and rightly so. One economist--I can't remember who it was--recently warned against reading The General Theory of Employment, Interest, and Money because it was written strictly for economists. I don't agree at all. It's a very hard book, especially some of the middle sections, but worth reading and rereading. If you don't have energy for the whole thing, read the first three chapters, some of the middle chapters (7, 10, 16, and 18 are my suggestions) and the last three. I suggest, however, a guide. The best I've found is Dudley Dillard's The Economics of John Maynard Keynes, which, to my amazement, is still in print after sixty years. I also like Hyman Minsky and Paul Davidson's guidebooks to Keynes. But you've got to read Robert Skidelsky's three-volume biography of Keynes, Hopes Betrayed, The Economist as Savior, and Fighting for Freedom (also now available in an abridged one-volume edition). Believe me, this is one of the great biographies. The way he brings together Keynes, the gay aesthete of Bloomsbury, and Keynes, the economist and man of worldly affairs, is something to behold. Skidelsky's second volume is also the best introduction to Keynes's economics, because you learn that exactly those ideas you found mystifying or most difficult in Keynes were hotly debated between him and his colleagues.
3. The Great Depression. There have been a lot of books on this subject, but most of what I read I read decades ago, so I'm sure I'm going to overlook worthy choices. Still, there are two older books that continue to stand up. George Soule was an editor of The New Republic during the 1930s. He was also an economist and in 1947 published a study of the American economy from 1917 to 1929 entitled Prosperity Decade. Soule shows that well before 1929, there were rumblings of trouble in the American economy--not only in the stock market bubble, but in overcapacity in key industries like auto, and in the rise of technological unemployment. You'll see the surprising resemblance to our own decade, including an anticipatory recession in 1926 like the one in 2001. On the international crisis of the 1930s, I like Charles P. Kindleberger's The World in Depression, which I reread two months ago when I was writing about the current international imbroglio. I want also to mention an essay by Sklar in The United States as a Developing Country. In chapter five, "Some Political and Cultural Consequences of the Disaccumulation of Capital," Sklar puts forward the idea that during the 1920s, capitalism shifted from the accumulation to disaccumulation of capital. That's Marxist jargon, but what it means is that goods production began to expand as a function of the reduction rather than increase in labor-time and in the labor force. That created an enormous opportunity, but also a potential crisis. The depression of the 1930s, Sklar argues, was the first "disaccumulationist" depression. One of his former students, historian Jim Livingston from Rutgers, has put forward a similar analysis of the current recession....