MoneyWeek book review: An essential guide to economics

It's the best layman's guide to the history of economics ever written. And if it had only extended its coverage, it could have been the definitive one.

Economics books rarely make for blockbusters. The few big-selling ones, such as the recent Freakonomics, peg themselves on being a form of alterno-economics where the economist comes out of his ivory tower to see how the real world works. So the fact that a book as unashamedly ideas-driven as The Worldly Philosophers has shifted more than two million copies marks it out as something unusual.

Over 50 years on from its first edition, Robert Heilbroner's book remains the best layman's guide to the early history of economics ever written and essential reading for any non-specialist who wants to understand how capitalist society developed. Structuring it as an account of the life and work of seven major thinkers, Heilbroner deftly picks out the common threads that run through their theories, identifying where they disprove, contradict and build on each other's ideas to create a smooth picture of a science in development and the world that developed it.

Running from Adam Smith's then-radical views on how the market would bring greater wealth and meritocracy to Britain, through Thomas Malthus and David Ricardo's gloomy convictions that overpopulation and land shortages would make this a false hope, and onto the theories of Karl Marx, Thorstein Veblen, John Maynard Keynes, Joseph Schumpeter and a host of supporting players, the breadth of ideas and history covered is outstanding. Heilbroner never becomes bogged down in side-issues, his prose is sharp and he has a gift for simplifying complexities. Even the infamously difficult-to-read Ricardo becomes easy to digest.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The only problem is that it simply doesn't go far enough. Recent editions added a brief epilogue criticising modern economics for being too obsessed with scientific method and not paying enough attention to the social factors that also affect economies, but there's still no analysis of Milton Friedman and the other monetarists whose theories largely eased out Keynes's from the late 1960s and early 1970s onwards. Similarly, there is nothing but brief notes on Friedrich Hayek and other influential Austrian School economists (except Schumpeter, generally considered an apostate by Austrian purists). The first Chicago School and the interesting, idiosyncratic Frank Knight are also ignored. Given that Heilbroner, a leftish economist and peer of JK Galbraith, was opposed to most of their ideas, any analysis would probably not have been very balanced. But the omission does leave the reader wanting an equally sharp guide to their work. Unfortunately, none exists.

The Worldly Philosophers by Robert Heilbroner is published by Penguin and costs £10.99

Cris Sholto Heaton

Cris Sholto Heaton is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is especially interested in international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers. He often writes about Asian equities, international income and global asset allocation.

Cris began his career in financial services consultancy at PwC and Lane Clark & Peacock, before an abrupt change of direction into oil, gas and energy at Petroleum Economist and Platts and subsequently into investment research and writing. In addition to his articles for MoneyWeek, he also works with a number of asset managers, consultancies and financial information providers.

He holds the Chartered Financial Analyst designation and the Investment Management Certificate, as well as degrees in finance and mathematics. He has also studied acting, film-making and photography, and strongly suspects that an awareness of what makes a compelling story is just as important for understanding markets as any amount of qualifications.