Techdirt Reading List: Knowledge And The Wealth Of Nations: A Story Of Economic Discovery

from the the-economics-of-information dept

We’re back again with another in our weekly reading list posts of books we think our community will find interesting and thought provoking. Once again, buying the book via the Amazon links in this story also helps support Techdirt.

Okay, this is one of my absolute favorite books for understanding economics — and especially the economics of information. Have you ever read a book where you keep finding yourself excited because you’ve discovered that other people had independently worked out a bunch of the ideas that had been sifting through your brain? That’s what Knowledge and the Wealth of Nations: A Story of Economic Discovery by David Warsh was for me. It almost made me giddy, because I had just been working through my own mental model for the economics of abundance, and then I discovered that some pretty well known economists had been sorting the same things out themselves. It was exciting.

The book is really well written too. Most of the first half is a fun look at historical economists (going beyond just the economics of information and growth, but using that as a sort of central theme). And then the rest focuses on the work of the economist Paul Romer, who basically brought things around in a very useful way when it comes to the economics of information. Actually, one of the things that bothered/stunned me a little was that this work had been done so recently. As I had been sorting through it, I kept thinking back to applying work from much earlier economists, without realizing that it was still considered such a challenging issue. A key point in the book is understanding how information is the key to economic growth, and in particular, the fact that information itself is abundant, rather than scarce. It’s that abundance, and the ability to spread it, that creates new ideas, better efficiency, more growth and a better overall world. Before all that, many economists had actually been confused as to why some economies grew, and others didn’t — and they were equally confused about the role of technology in enabling economic growth. This book lays out a lot of points around this in a really useful manner. I reread it every few years and recommend it highly.

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