The most recommended books about economic inequality

Reading about income inequality can be fun! 

Branko Milanovic combines critical accounts of the literature on inequality with short illustrative vignettes that cover everything from English literature to Marx´s ideas. 

Over three chapters, he reviews the three key dimensions of inequality: income gaps between people within a single country, income gaps between countries, and (combining both) income gaps between all citizens of the world. 

There are so many interesting examples in this book: you will learn what Pride and Prejudice teach us about wealth concentration, the degree of inequality in the Roman empire, or the links between income distribution and the 2008 financial crisis. 

A must-read if you want to understand economics while learning about interesting facts in an entertaining way.

I lived through some of the events that Lane Windham describes in her super-readable and super-informative account of how new types of workers challenged both their employers and the American labor movement to listen to them and improve their work lives.

Shipyard workers, department store workers, office workers – these groups figured out new ways to raise their voices and “knock on the door” to make themselves heard. The result was big changes in their own lives, in the workplace, and in America’s unions.

Today, we’re seeing a surge of labor organizing just as groundbreaking as the initiatives Lane Windham describes. This made the book especially relevant for me. 

This Nobel Prize-winning economist gets right to the heart of America’s problems: the growing divide between the rich and the rest of society.

We can see the toll declines in the standard of living have taken: malnutrition, drug abuse, shortened life expectancy, lack of access to much-needed health care, desperation and increased economic insecurity among the poor and a shrinking middle class in America.

Stiglitz convincingly shows how Federal Reserve policies, budgetary policies of Congress, and globalization have increased the widening gap, but also offers hope for a more economically just future.

After interviewing me for my new book in May 2021, the editor of a suburban newspaper in Chicago asked me to write an Op Ed piece about the new federal holiday, Juneteenth. It is the day of recognition and celebration of the ending of slavery in the last confederate state of Texas in 1865. My Op Ed piece titled, “My Bittersweet Feelings About Juneteenth,” was written to inform and educate adult readers about June 19, 1865. That was the day Union Troops arrived in Galveston, Texas, and began informing Black enslaved people that they were officially emancipated. 

The Juneteenth Story is a well-researched and beautifully written historical depiction of the same event. But the targeted audience of readers are children. It is the size of a large typical children’s coloring book filled with pretty colors and appealing graphic art. My 40-year-old daughter, Akilah, gave it to me as a Father’s… show more.

I enjoy myth-busting.

A favorite message from the economic profession is that free trade is good for everyone, and that those who do not agree are either misguided or defending vested interests of their own. In this book, Williamson shows that this view is false.

The welfare gap between the West and the rest of the world developed during the 19th and 20th centuries in large part because of trade-induced division of labor that led to de-industrialization, increased inequality, and volatile revenues in the losing countries—factors that all contributed to retarding economic growth and social development in countries that are now poor.

More recently, the free movement of capital has had similarly negative effects on developing and emerging economies, a fact that is now recognized also in organizations such as the IMF.

In contrast to seeing the causes of inequality flowing from the labour market, this book is focused on how the capital income ratio has changed using long time series of data that Piketty and his collaborators have assembled.

Piketty argues that there is a long-run tendency for the growth of capital to outpace income and this leads to increasing income accruing to capital which explains the rising levels of inequality in capitalist economies. His most well-known assertion is that r>g where r is the average annual rate of return on capital and g is the rate of growth of the economy.

In fact, this inequality has been emblazoned on t-shirts of those protesting the rise in income of the 1 percent.

The great fact of economic history is that we all used to be poor, and now most of us are not. 200 years ago, almost 90 percent of the world’s population lived in extreme poverty, today around 9 percent does. This is the story of that remarkable transformation and what made it possible. Of course, there are many good books on this, and I have greatly enjoyed for example Joel Mokyr, Deirdre McCloskey, and David Landes, but this is a powerful, short book by a great historian, that manages to weave together economic, political, technological and intellectual factors into a very compelling narrative of progress and its preconditions over the past one thousand years.

American author Mark Twain had described the last decades of the 19th century as the Gilded Age in the United States, a period when on the surface everything appeared to be glittering like gold concealing the filth and ugliness that lay beneath. British journalist and academic James Crabtree, now based in Singapore, believes that the last few decades in India closely resembles the Gilded Age of the US. His 357-page book is filled with dozens of anecdotes about some of India’s most wealthy individuals such as Mukesh Ambani, Gautam Adani, and Vijay Mallya. His meetings with them and his detailed descriptions of their lifestyles and demeanour make for racy reading. 

A disclaimer: Crabtree has described in flattering terms his meeting with this writer and referred to some of my articles and books.

This book provides a grand sociological theoretical framework to explain how society creates and maintains persistent inequality through grouping.

The author does not anchor his explanation in individual biases and discriminatory acts, which are manifestations of larger fundamental structures and dynamics. The division and organization of the population into categories produce systemic group advantages and enable hierarchical exploitation.

Several organizational mechanisms within and between groups make categorical inequality durable. Race is one of the fundamental ways society is fragmented into enduring and unequal groups.

Ed Kleinbard was a treasured colleague, a brilliant commentator, and a giant in the field of tax policy. In his final year of life, perhaps fittingly, Kleinbard devoted himself to a book on the role of luck in economic outcomes, which opens with a quote from Stendhal. “Waiting for God to reveal himself, I believe that his prime minister, Chance, governs this sad world just as well.” The book argues that luck, and particularly existential luck (to whom and in what circumstances you are born), are paramount in determining economic outcomes. Within that context, Kleinbard makes a strong case for the role of public insurance in areas like health care, education, and childcare; he also emphasizes the importance of a progressive income tax system. 

I am fascinated by how everyday objects are invented, and in this book, readers will discover the real story of how the beloved Monopoly board game was created. The story is often misreported with the credit attributed to Charles Darrow, the man who popularized the game and sold it to the Parker Brothers. In fact, the game was invented by Lizzie Magie, who wanted to draw attention to financial inequality. The author challenges readers to decide – who was the real winner? Because, ironically, Magie sold her patent for only $500, while Darrow stood to make millions and appropriated the credit for the invention. But without the changes and improvements to the game made by the two of them, perhaps nobody would get to play Monopoly as we know it today.  

I am a few years older than the author and grew up in the suburbs of Boston, three towns away from his childhood home. The childhood he describes completely mirrors my own.

Like McKibben, I have witnessed the same disturbing changes happening in our country over the past 50 years. I, too, have shaken my head in disbelief at the transformations and asked, “How can this be happening?”

McKibben’s fierce curiosity and detailed research explain this change by examining how the definition of patriotism has taken on a different meaning, how the role of religion has waned significantly, especially in younger people’s lives, and how our economic class structure has inverted.

All these changes add up to a major transformation in American culture and values. I could relate to every premise he offered, saying, “Wow, this all makes sense!”

The Berber village of Tadrar clings to the steep slopes of the High Atlas. Lives are hard.

Women, men and children labor to bring precious water to homes, fields, and byres, to coax barley from narrow terraces, keep houses warm, feed families, tend the sick, and support the mosque and school. Most younger people go to the city for work, at least for a while, sending money home to help their families. 

So how do families and individuals view their options, their place in the village and in the world?

Vivid interviews and observations stud Crawford’s affectionate and perceptive account of how people in Tadrar decide to become involved in the larger world economy, and their views on what it does for them and to them. 

The approach of Milanovic is very different from that of Hickel in that it is intensive in the use of data which, he would argue, shows a much more nuanced picture of the success of the global economy in reducing poverty than argued by Hickel.

He begins by reproducing the ‘Elephant Chart’ from his earlier work. This is a chart showing the relative gain in real per capita income by global income level. The name ‘Elephant’ comes from the shape of the chart which shows the largest income gains to have occurred for those in the middle of the distribution and the lowest in the range of 70 to 80 in the percentile distribution and the highest for those at the very top. Those in the middle being the hump of the elephant those at the top being its trunk.

Milanovic argues that in many respects the years before the… show more.

This is a good book to understand the pervasive existence of “rents” in the economy. From the literal rents that homeowners in popular areas can charge, to the rents that accrue to copyright or patent holders, to the rents earned by firms using regulation to block competition, the authors document all the places in our economy where this restricts innovation. It is ultimately a book asking “what is fair?”.

Thomas Piketty’s earlier book, Capitalism, was one of those books that many people purchased but only wound up reading the first 20 pages because of its dense argument and writing style. 

A Brief History of Capitalism is much more accessible, and in my opinion, useful. The book takes a long-term perspective for examining inequalities among social classes in human societies. Piketty’s argument is that since the end of the 18th century, there has been a long-term movement toward more social, economic, and political equality.

The book provides an excellent overview of inequality across time.

The world is driven by incentives. Much of economics is not obscure theory but practically understanding how incentives affect decision-making.

Charles Wheelan’s Naked Economics provides a solid foundation for understanding how our lives revolve around economics and why understanding economic principles is critically important for evaluating the social and geopolitical world around us. 

This book was important in our analysis of Jane Austen’s work, as her use of economic principles in romance is what causes her work to be loved for centuries.

Can ideas change the world? How does belief in political equality—the idea that everyone deserves basic unbridgeable liberties—affect innovation and economic development?

Dierdre McCloskey—one of the most creative and interesting economists alive—takes on these topics and much more in her characteristically witty, fast-paced style. She loves describing and refuting bad ideas—or even ideas widely regarded as brilliant—in an effort to go deeper into the forces that lifted humans out of poverty and sustain innovation to this day.

This may seem an unusual choice – and its title is entirely misleading – but what Sanders describes is what the U.S. might look like if it translated Biblical values into policy and law.

Sanders’s real subject is justice – social, economic, racial, and environmental. He describes a compassionate society in which all have access to life, liberty, and the pursuit of happiness, and in which no one is condemned to suffer because of the accidents of birth.

Significantly, Sanders backs up all his suggestions with explanations of how they could be translated into reality. Read this even if you didn’t vote for him!

In Marriage Markets, June Carbone and Naomi Cahn, both law professors like Lynne Marie Kohm, examine how macroeconomic forces are transforming our most intimate and important spheres, and how working-class and lower-income families have paid the highest price.

Their book shows how the best-educated and most prosperous have the most stable families, while working-class families have seen the greatest increase in relationship instability because greater economic inequality has profoundly changed marriage markets.

The failure to see marriage as a market affected by supply and demand has obscured any meaningful analysis of the way that societal changes influence culture. But Jane Austen understood this principle very well.