- A Short History of Financial Euphoria, by John Kenneth Galbraith
- One World, Ready or Not, by William Greider
- Secrets of the Temple, by William Greider
I agree strongly with Douglas Edwards on both the usefulness and inadequacy of Paul Krugman's popular work. Before Krugman, the late John Kenneth Galbraith was the leading mainstream liberal economist; Krugman has been very critical of Galbraith exactly for the reason that Galbraith emphasized the structural and psychological reasons why Krugman's beloved models of the "free market" have only limited relevance to the real world. Galbraith's most important works, "The Affluent Society" and "The New Corporate State" contain many insights, but because they describe the old 1945-1975 version of corporate capitalism (in which the "countervailing power" of labor unions and government regulation tends to offset the power of large bureaucratic corporations), they don't deal with the leaner and meaner unchecked capitalism of today. However, Galbraith's "A Short History of Financial Euphoria," written in 1994 before the dot-com bubble, Enron, and the current mess, says most of what needs to be said about speculative booms and crashes in very few words.
In "The Accidental Theorist," Krugman trashes William Greider's "One World, Ready or Not: The Manic Logic of Global Capitalism" because Greider failed to use Krugman-style economic theorizing to discover that Greider's fact-based view of globalization was too pessimistic. Both books came out in 1997, but it is Greider's that describes today's world: "American politics is steeped in ignorance about the global reality, and any who question the reigning mantra of economic orthodoxy will be harshly disciplined by the press and multinational interests... if I am compelled to guess the future, I would estimate that the global system will, indeed, probably experience a series of terrible events - wrenching calamities that are economic or social or environmental in nature - before common sense can prevail."
Greider has never called himself an economist, as far as I know, but in his 1987 "Secrets of the Temple: How the Federal Reserve Runs the Country" he uses over 700 pages to explain the Fed's place in history and especially its role in the transition from Keynesian-era capitalism to the current system. This may not be a Top Five book, but it's essential background for any non-specialist who wants to think seriously about changing the financial system.