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I wish economics was taught in school. You could incorporate it in to both history and math classes and it would give people a good foundation for being able to analyze trade offs and think through consequences.
Sowell's book in many ways is just common sense, but I think that's partly because thinking about the world in economic terms comes fairly naturally to me/was developed in me early thanks to my dad. I'll never forget when I was only about 7 and had a great solution to all the world's problems and excitedly told him about it. He took the time to explain to me that someone had already thought up my idea and it was called communism and why it doesn't work. I became a libertarian that day and haven't looked back. :)
Of course, just having everyone learn economics doesn't mean we'd all agree or there wouldn't be competing schools of thought within economics. But I do think it would people be able to think through the consequences of a policy or idea past the initial change they are hoping for.
For example, it's easy to say that anyone who needs medical attention should be able to go to the ER and get care. But what about when the ER is backed up with people seeking treatment for nonemergency issues cause someone to die of a heart attack while waiting on a doctor? I know that's a rather simple example and we will never all agree on how to solve it but economics gives us a foundation for evaluating the costs and benefits of actions.
This book provides very clear explanations and examples on a wide range of topics such as profits, productivity and pay, investments, minimum wage, banking system, the role of government, etc. I especially learned from the sections on international trade, transfers of wealth and disparities in wealth.
I highly recommend this and will definitely pick up some of his other books.
Sowell's book in many ways is just common sense, but I think that's partly because thinking about the world in economic terms comes fairly naturally to me/was developed in me early thanks to my dad. I'll never forget when I was only about 7 and had a great solution to all the world's problems and excitedly told him about it. He took the time to explain to me that someone had already thought up my idea and it was called communism and why it doesn't work. I became a libertarian that day and haven't looked back. :)
Of course, just having everyone learn economics doesn't mean we'd all agree or there wouldn't be competing schools of thought within economics. But I do think it would people be able to think through the consequences of a policy or idea past the initial change they are hoping for.
For example, it's easy to say that anyone who needs medical attention should be able to go to the ER and get care. But what about when the ER is backed up with people seeking treatment for nonemergency issues cause someone to die of a heart attack while waiting on a doctor? I know that's a rather simple example and we will never all agree on how to solve it but economics gives us a foundation for evaluating the costs and benefits of actions.
This book provides very clear explanations and examples on a wide range of topics such as profits, productivity and pay, investments, minimum wage, banking system, the role of government, etc. I especially learned from the sections on international trade, transfers of wealth and disparities in wealth.
I highly recommend this and will definitely pick up some of his other books.
In A Nutshell: The road to Hell may be paved with good intentions... But the road to a thriving economy is NOT.
In all honesty, this book was a bit over my head. I have zero economics background--no exposure at all in either high school or college. I did a fair bit of re-reading through this sizable tome (not because it was an overly academic slog, but because my brain struggled to absorb some of the concepts, despite the author's eloquent and careful wording.) I'm so glad I did a lot of highlighting, as it's helped me go back over and solidify my comprehension.
As it turns out, I've gone my whole life without knowing even the basic definition of economics.
I had assumed it just involved something vaguely complicated and/or ominous regarding money and stock markets...
I'd never been told that economics is, as Sowell repeats almost ad nauseam: "The Allocation of Scarce Resources That Have Alternative Uses." (Seriously, they should really consider this as the book's subtitle!)
The broadness of potential applications was a little mind-blowing.
"Economics is a tool of cause and effect analysis--a body of tested knowledge, and principles derived from that knowledge. Money doesn't even have to be involved to make a decision be economic."
Sowell goes on to make an analogy to battlefield triage (which I hugely appreciated from a medical and logistical standpoint)--pointing out that choosing who receives the attention of doctors and nurses when the demand for them outstrips the supply is truly a sort of economic conundrum; though it is one in which no money changes hands. But as he so often repeats: Economics is about the allocation of resources. Strip away any knee-jerk emotional reactivity, and this is the simple truth of what we are left with.
The author also rather passionately points out that, because of the known and foreseeable consequences of certain economic policies, economics really IS a life-or-death matter when it comes to the most vulnerable in our society (and among the more impoverished nations.) While economically illiterate political figures may be well-meaning... results speak for themselves. And well-meaning people can sometimes be the most dangerous. i.e. Causing far more harm than good in the long term.
"Political crusades are based on plausible rationals, but even when those rationals are sincerely believed and honestly applied, their actual consequences may be completely different from their initial goals."
I suspect one of the main issues critics have with Sowell is his prevailing undertone of cynicism toward career politicians. He's clearly of the opinion that most of these figureheads are only concerned with whatever gets them votes in the here and now, and not with the lasting repercussions of their policies and panderings. (I also have no background in politics, so I don't feel qualified to say how justified the author is in his jaded outlook.) Personally, I didn't think his efforts toward holding politicians accountable were at all unfair--or unnecessary.
Intriguing Quotes:
"Once the government has a rationale for exercising a particular power, that power can be extended to other circumstances far removed from that rationale. That has long been the history of occupational licensing."
"In politics, however, the costs of the government's mistakes are often paid by the taxpayers, while the costs of admitting mistakes are paid by elected officials. Given these incentives and constraints, the reluctance of government officials to admit mistakes and reverse course is perfectly rational from those official standpoints."
"Nothing is easier than to have good intentions. But without an understanding of how an economy works, good intentions can lead to counterproductive or even disastrous consequences for a whole nation. Many, if not most economic disasters have been the result of policies intended to be beneficial. And these disasters could have been avoided if those who originated and supported such policies had understood economics."
"The public can express their desires either through choices made in the voting booth, or choices made in the marketplace. However, political choices are offered less often, and are usually binding until the next election."
In all honesty, this book was a bit over my head. I have zero economics background--no exposure at all in either high school or college. I did a fair bit of re-reading through this sizable tome (not because it was an overly academic slog, but because my brain struggled to absorb some of the concepts, despite the author's eloquent and careful wording.) I'm so glad I did a lot of highlighting, as it's helped me go back over and solidify my comprehension.
As it turns out, I've gone my whole life without knowing even the basic definition of economics.
I had assumed it just involved something vaguely complicated and/or ominous regarding money and stock markets...
I'd never been told that economics is, as Sowell repeats almost ad nauseam: "The Allocation of Scarce Resources That Have Alternative Uses." (Seriously, they should really consider this as the book's subtitle!)
The broadness of potential applications was a little mind-blowing.
"Economics is a tool of cause and effect analysis--a body of tested knowledge, and principles derived from that knowledge. Money doesn't even have to be involved to make a decision be economic."
Sowell goes on to make an analogy to battlefield triage (which I hugely appreciated from a medical and logistical standpoint)--pointing out that choosing who receives the attention of doctors and nurses when the demand for them outstrips the supply is truly a sort of economic conundrum; though it is one in which no money changes hands. But as he so often repeats: Economics is about the allocation of resources. Strip away any knee-jerk emotional reactivity, and this is the simple truth of what we are left with.
The author also rather passionately points out that, because of the known and foreseeable consequences of certain economic policies, economics really IS a life-or-death matter when it comes to the most vulnerable in our society (and among the more impoverished nations.) While economically illiterate political figures may be well-meaning... results speak for themselves. And well-meaning people can sometimes be the most dangerous. i.e. Causing far more harm than good in the long term.
"Political crusades are based on plausible rationals, but even when those rationals are sincerely believed and honestly applied, their actual consequences may be completely different from their initial goals."
I suspect one of the main issues critics have with Sowell is his prevailing undertone of cynicism toward career politicians. He's clearly of the opinion that most of these figureheads are only concerned with whatever gets them votes in the here and now, and not with the lasting repercussions of their policies and panderings. (I also have no background in politics, so I don't feel qualified to say how justified the author is in his jaded outlook.) Personally, I didn't think his efforts toward holding politicians accountable were at all unfair--or unnecessary.
Intriguing Quotes:
"Once the government has a rationale for exercising a particular power, that power can be extended to other circumstances far removed from that rationale. That has long been the history of occupational licensing."
"In politics, however, the costs of the government's mistakes are often paid by the taxpayers, while the costs of admitting mistakes are paid by elected officials. Given these incentives and constraints, the reluctance of government officials to admit mistakes and reverse course is perfectly rational from those official standpoints."
"Nothing is easier than to have good intentions. But without an understanding of how an economy works, good intentions can lead to counterproductive or even disastrous consequences for a whole nation. Many, if not most economic disasters have been the result of policies intended to be beneficial. And these disasters could have been avoided if those who originated and supported such policies had understood economics."
"The public can express their desires either through choices made in the voting booth, or choices made in the marketplace. However, political choices are offered less often, and are usually binding until the next election."
Essentially a capitalist manifesto - less an explanation of basic economics than an essay on why free-market capitalism is supposedly the best economic system under any circumstances. Anecdotal in its arguments (also dismissive of “emotional” understandings of economics but then utilises the story of Henry Ford walking into Detroit to find a job and then becoming a millionaire to perpetuate the emotional and false myth of the American dream) and repetitive in places. Focuses almost solely on twentieth-century American contexts. Did help me understand some of the thinking behind advocacy of free-market capitalism but too biased and narrowly-focused to be a truly useful guide to economics.
Dr. Sowell's Libertarian views shine through at times but overall this book explained economic principles I'd always wondered about in plain language.
I wanted to read it, but I just couldn’t.
I’ve trudged through 53/634 pages, and I’m not intrigued. Sowell seems to be more interested in shoving his views down the reader’s throat than he is in fostering an understanding of concepts.
To be clear: I’m not saying that the author is incorrect or that the information presented is unsupported. I’m saying that Sowell seems to be presenting a one-sided approach to a complicated topic, and I will be looking elsewhere to gain a less unilateral view of the topic.
I hope for the sake of those braver than I that the rest of the book evens out a little bit more in later chapters.
I’ve trudged through 53/634 pages, and I’m not intrigued. Sowell seems to be more interested in shoving his views down the reader’s throat than he is in fostering an understanding of concepts.
To be clear: I’m not saying that the author is incorrect or that the information presented is unsupported. I’m saying that Sowell seems to be presenting a one-sided approach to a complicated topic, and I will be looking elsewhere to gain a less unilateral view of the topic.
I hope for the sake of those braver than I that the rest of the book evens out a little bit more in later chapters.
challenging
informative
reflective
medium-paced
My new goal: read one Thomas Sowell book per year. The man is a logical, brilliant thinker.
Basic Economics should be required reading for all high schoolers - in fact, my used copy that had never been checked out is from a high school library. It is thorough and yet understandable... admittedly, there were parts I had to read a few times to let it sink in. He put names to scenarios I have seen played out and connected many dots. I cannot possibly do justice to this book without my review being more extensive then I have time for. I'll let the book speak for itself:
"The Soviet Union did not lack for resources, but was in fact one of the most richly endowed nations on earth. What it lacked was an economic system that made efficient use of scarce resources. Because Soviet enterprises were not under the same financial constraints as capitalist enterprises, they acquired more machines than they needed, "which then gather dust in warehouses or rust out of doors," as the Soviet economists put it."
"Few things are more simple than the fact that people tend to buy more at lower prices and buy less at higher prices. But putting that together with the face that producers tend to supply more at higher prices and less at lower prices, that is enough to predict all sorts of complex reactions to price controls, as for example in the housing market. Moreover, these reactions have been found on all inhabited continents and over thousands of years of recorded history."
"Perhaps the most decisive evidence of the role of profit as an incentive is the record of socialist economies which have eliminated it. The sums of money saved by eliminating profits have failed to lower prices and make the consuming public better off, because the absence of incentives has allowed many inefficiencies to go unchecked and technological and organizational changes to lag."
"Many policies are made as if he citizens subject to them are like pieces on a chessboard, to be moved here and there as the policy-makers wish. For example, when tax rates are raised 10 percent, it may be assumed that tax revenues will also rise by 10 percent. But in fact more people move out of the heavily taxed jurisdiction, or buy less of the heavily taxed commodity, so that the revenues received may be disappointingly far below what was estimated."
"Very often either history or economics could have told us what to expect, but neither was consulted. It does not matter that a law or policy proclaims its goal to be "affordable housing," "fair trade" or a living wage." What matters is what incentives are created by the specifics of these laws and how people react to such incentives. These are dry empirical questions which are seldom as exciting as political crusades or moral pronouncements."
Basic Economics should be required reading for all high schoolers - in fact, my used copy that had never been checked out is from a high school library. It is thorough and yet understandable... admittedly, there were parts I had to read a few times to let it sink in. He put names to scenarios I have seen played out and connected many dots. I cannot possibly do justice to this book without my review being more extensive then I have time for. I'll let the book speak for itself:
"The Soviet Union did not lack for resources, but was in fact one of the most richly endowed nations on earth. What it lacked was an economic system that made efficient use of scarce resources. Because Soviet enterprises were not under the same financial constraints as capitalist enterprises, they acquired more machines than they needed, "which then gather dust in warehouses or rust out of doors," as the Soviet economists put it."
"Few things are more simple than the fact that people tend to buy more at lower prices and buy less at higher prices. But putting that together with the face that producers tend to supply more at higher prices and less at lower prices, that is enough to predict all sorts of complex reactions to price controls, as for example in the housing market. Moreover, these reactions have been found on all inhabited continents and over thousands of years of recorded history."
"Perhaps the most decisive evidence of the role of profit as an incentive is the record of socialist economies which have eliminated it. The sums of money saved by eliminating profits have failed to lower prices and make the consuming public better off, because the absence of incentives has allowed many inefficiencies to go unchecked and technological and organizational changes to lag."
"Many policies are made as if he citizens subject to them are like pieces on a chessboard, to be moved here and there as the policy-makers wish. For example, when tax rates are raised 10 percent, it may be assumed that tax revenues will also rise by 10 percent. But in fact more people move out of the heavily taxed jurisdiction, or buy less of the heavily taxed commodity, so that the revenues received may be disappointingly far below what was estimated."
"Very often either history or economics could have told us what to expect, but neither was consulted. It does not matter that a law or policy proclaims its goal to be "affordable housing," "fair trade" or a living wage." What matters is what incentives are created by the specifics of these laws and how people react to such incentives. These are dry empirical questions which are seldom as exciting as political crusades or moral pronouncements."
I was hoping for an unbiased layman's intro to economics, but it quickly became apparent that this was not that book. Far too much unsupported and oversimplified argument by assertion about the amazing, unbeatable power of markets, liberally dosed with the author's own strong opinions on the correct way to run an economy.
"Dry empirical questions are seldom as exciting as political crusades or ringing moral pronouncements, but empirical questions are questions that must be asked if we are truly interested in the well-being of others rather than in exciting our sense of moral superiority for ourselves. Perhaps the most important distinction is between what sounds good and what works. The former may be sufficient for purposes of politics of moral preening but not for the economic advancement of people in general or the poor in particular."
Thomas Sowell is obviously conservative (in at least many ways that we use that word in the US today) and he obviously believes that economic thinking is incredibly important for those interested in the betterment of humans as individuals and humanity as a whole.
As much as I enjoy Freakonomics-like pop economics books, I think this gave me much more to think about.
If you're not accustomed to delving into economic conservatism, I highly recommend reading this book and I also highly recommend pacing yourself. Sowell doesn't hide his personal feelings and if you disagree with some of his judgements, try to make sure you don't entirely throw out his line of reasoning along with his conclusions.
If you're a US-style conservative, I highly recommend reading this book as well. This book contains arguments for free trade, open immigration, and creating cultural melting pots. It also includes arguments against NIMBYism.
If you have a big interest in doing right by society as a whole (rather than by your family/nation/tribe/etc) but a very limited background in economics, I think you'll find many of the thought experiments in this book eye-opening.
This had been on my to-read list for years and I'm glad I finally read it.
Thomas Sowell is obviously conservative (in at least many ways that we use that word in the US today) and he obviously believes that economic thinking is incredibly important for those interested in the betterment of humans as individuals and humanity as a whole.
As much as I enjoy Freakonomics-like pop economics books, I think this gave me much more to think about.
If you're not accustomed to delving into economic conservatism, I highly recommend reading this book and I also highly recommend pacing yourself. Sowell doesn't hide his personal feelings and if you disagree with some of his judgements, try to make sure you don't entirely throw out his line of reasoning along with his conclusions.
If you're a US-style conservative, I highly recommend reading this book as well. This book contains arguments for free trade, open immigration, and creating cultural melting pots. It also includes arguments against NIMBYism.
If you have a big interest in doing right by society as a whole (rather than by your family/nation/tribe/etc) but a very limited background in economics, I think you'll find many of the thought experiments in this book eye-opening.
This had been on my to-read list for years and I'm glad I finally read it.
informative
reflective
slow-paced
A very interesting read on economics. Highly libertarian and informative. Thomas Sowell distills the dense science of economics down. Very readable and understandable.