100 books like Managed by the Markets

This is a classic oral history of jobs in what older people call “the good old days.”  It is told from the perspective of the individuals doing the jobs they were talking about, and it reveals how interesting their day-to-day experience is.

The reminder for today, especially in our remote workplaces, is how important relationships with people at work are to our happiness and well-being. It’s also a reminder of how important it is for people to have some control over what they do and to feel invested in their work.

People want to do things well and take pride in what they do. We forget all this when we think of workers as widgets to be optimized. 

Most of the discussion about whether jobs are good or bad focuses on wages. The sociologists add the concern about uncertainty–will my job last?

What gets far less attention is the fact that the way we manage employees has a direct and profound effect on their mental health and, in turn, on their physical health.

This is a new finding and an important one. We can see a direct effect of bad management practices on employee sickness and death. As documented here, stress kills.

There is an entire industry that talks very positively and upbeat about finding jobs, and we tend to think of job search as a good thing–good for people and good for organizations–that helps us grow and develop.

Ilana Gershon is an ethnographer, and she moved into groups of people trying to find new jobs. These aren’t the hot-shot computer nerds who happen to have the very specific skills in demand right now; they are average people looking for all the other jobs.

She finds the process is full of snake-oil advice (“find your superpower”!) and false optimism from pop-psychologists who suggest you can just will and network your way to a better job. It is a frustrating process made almost completely opaque by employers who reveal little and provide no feedback to job candidates.  

Most experts now see 1981 as the key moment when the economy changed: jobs became much less secure, white-collar jobs no longer felt like insiders to the power structure, benefits and wages fell, and income inequality took off.

This book describes the process of moving toward more open-market arrangements in employment. It is largely an explanation driven by events within the US, ultimately political and “private policy” decisions driven by a different view on business obligations. 

Those who want to understand the origins of business cycles and how to prevent them should read this book.

One of the most pressing, if not the most pressing, problem of our societies today is our monetary and financial system. This book explains why and offers a solution.

I believe that it is the most complete Austrian treatise on money and banking. It is interdisciplinary looking at law and history as well. I have used it as a textbook for years in class and I have translated it into German. Every serious student of money and banking has to have mastered this book.

This book comprises an edited compendium of investment reports from Marathon Investment Management, with three broad themes.

First, stock markets are about capitalism, not macroeconomics.

Second, successful investment requires an understanding of the relative size and composition of supply, demand, production, and consumption. You need to compare heterogeneity, fragmentation, and growth (positive or negative) on both sides of a company’s market.

Third, pay attention to the capital cycle. Seek out sectors from which investors’ capital and attention are being withdrawn, and be wary of sectors which are attracting increasing capital and attention.

This is a serious recommendation if you are to read my volumes. Why? Shapes and illustrations. I read this book as a kid and, as you might imagine, it was my favorite book. There is no better investment into our future than investing into the basic understanding of society and commerce. But, back to shapes. My own series includes a vast array of shapes and imagery to tell the story, from what to how to because to why. 

More so than almost any other economist of his stature, Joseph Schumpeter appreciated the central importance of entrepreneurship to any proper understanding of economics. After all, Schumpeter was the academic who popularized (but did not actually coin) the term “creative destruction,” now synonymous with the disruptive but ultimately beneficial process of innovative entrepreneurship.  

In Business Cycles, among other topics, the Austrian-born economist explains how the entrepreneur, defined as an “individual who carries out innovations,” interacts with the capitalist, defined as “the one who bears the [financial] risk.” Their collaborative work lies at the core of what Schumpeter describes as economic “evolution,” impacting the business cycle and the lives of everyone in a capitalist society. First published in 1939, Schumpeter’s observations still resonate over 80 years later.

Take Hayek’s market economy as a Bohemian accordion orchestra.

As its instruments produce music, each elongates, pulls in air (analogous to money), and compresses, expresses air (money). Air-in (savings) is equal to air-out (investment). Fluctuating elongations and compressions are an essential feature of the orchestra (the economy).

For Hayek, interference with harmonious accordion (economic) activity infusing or restricting air (money) would spoil the music.

Economic fluctuations stem from preferences, spending for present enjoyment, or saving for future gains. Relative demands for end products or capital impact relative prices, costs, and returns, affecting savings/investment. Investment money, as IOUs, flies where returns are highest.

Hayek engages readers to prove that bank interventions’ tinkering with money is as capable of producing compassionate social outcomes as free individuals using their earnings as they wish.

This was an exciting reading for me. I find a great connection with Akerlof and Shiller’s book Animal Spirits.

This book admits, that people might have some cognitive limitations and use simple forecasting rules in order to make decisions with resulting implications at the aggregate level. As a result, there is great potential for the emerging, yet undiscovered discipline of behavioral macroeconomics.

Personally, for me, revolutionary element is the combination of bounded rationality and willingness to learn from past mistakes and consequent switch to better rules. This book introduces special behavioral macroeconomic model based on the dynamics of endogenous animal spirits, in which case waves of optimism and pessimism are responsible for the business cycle itself.

I find especially interesting the part devoted to the discussion of how central banks should approach inflation targeting in behavioral models with animal spirits.