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4.11 AVERAGE
4.11 AVERAGE
While this book has a wealth of information about economics and helped me understand some of the reasoning behind various economic activities going on in our world, I have 2 huge problems with this book that prevent me from recommending it to other people:
1. It is very biased and takes on the capitalist agenda completely, never missing a single opportunity to comment on the futility and ineffectiveness of socialist economies and the MAGICAL powers of capitalist economies to regulate itself and be efficient. I did not appreciate this one-minded approach.
2. It is very repetitive. It explains a concept or an idea followed by an example followed by a re-explanation followed by another example then another re-explanation and so on. Every chapter in the book more ore less follows that formula. I know this is used to hammer the point, but this is just a bit too much hammering.
1. It is very biased and takes on the capitalist agenda completely, never missing a single opportunity to comment on the futility and ineffectiveness of socialist economies and the MAGICAL powers of capitalist economies to regulate itself and be efficient. I did not appreciate this one-minded approach.
2. It is very repetitive. It explains a concept or an idea followed by an example followed by a re-explanation followed by another example then another re-explanation and so on. Every chapter in the book more ore less follows that formula. I know this is used to hammer the point, but this is just a bit too much hammering.
I loved how Sowell taught Economics. His examples were easy to understand and he really made me interested in the subject.
informative
medium-paced
challenging
informative
slow-paced
This book is great in showing how economics works by looking at various fields in quite depth. It's less great in some of the final chapters when the discussion turns to what we should value in the economic realm, and if charity is actually a wise economic decision. The book gave me some great insight into how the realm of economics works. But I very much disagreed with the idea that economic prosperity and efficiency is really the greatest value at play here.
Rating: 4-4.5 Stars (Excellent)
Rating: 4-4.5 Stars (Excellent)
informative
slow-paced
I'm going to put three stars on it, basically because many of the things he warns against are things I experienced, so I guess from an intuitive level I have some idea of what he's talking about (such as price control, inefficient ways of combating inflation), etc. And because he actually proves that economics isn't just magical state interventionism to the rescue. However, what kept this book from five stars, in my opinion, are the following:
-his reiterated claim that economics does not concern itself with ethics to then claim that honesty is necessary. See, all those disastrous Soviet plans weren't honest about what they were spending, either. Honesty is an ethical issue. Economics can be improved if the ethical system is taken into account: because you would not demand something that the market can't do (i.e. selling persons, "sex", all too common in the currently reigning cultural libertarianism-liberalism of the U.S. and Europe, which can be refuted in the following way:
[E]conomics are a set of ethics (against the Cartesian mechanistic conception), whose goal is obtaining of material goods useful to man [...] everything that exceeds this, once the needs of one own's state [of life] are satisfied, is superfluous and is not a [material] good if they are kept or used to satisfy the thirst of pleasures [...]
Therefore, economy is a part of prudence, as St. Thomas teaches, (II-II, q.51, a.3) whose goal is the right order of human actions towards one's own maintenance or that of family, or society. [...]
It is necessary that prudence, and with that economy, are subordinated to charity in a perfect way, which is the most excellent of virtues and without there can be no true virtue.
From what has been said follows that "economic laws are not purely physical as those of mechanics or chemistry, but laws of human action that imply moral values [...]
[G]ains as a good in themselves are not only forbidden by individual morality, but they are economically bad things that go against the goal of economy itself, because this goal is a human one" (Maritain, Religion et Culture, p. 46). Fr. Julio Meinvielle, A Catholic Conception of Economics
Precisely the Randian error of productive people only being valuable insofar as they keep the capitalist system going, which Sowell does not explicitly endorse, but doesn't warn against either, is a product of thinking of economics as happening in a vacuum (only with certain government intereference). Economics are for man, and not man for economics.
-his reiterated idea that the market only provides what people "need" and that consumerism is a good barometer (this is a word he redefined to his own liking, "the costumer is always right" is a bad moral guideline in general). We do have free will, we're not the slaves of companies, but we stilll very much might want stupid things.
-the inaccurate use of the word Third World: this word suggests political alignment and not economical status. I know this incorrect use is the norm among colloquial conversations, but this is not right.
-his reiterated idea that against protectionism many "Third World" countries opened the market and it all fixed. Nope, you can do it badly, the argie way. By creating an artificial equivalence among USD and Peso from 1 to 1.
-his complaints against the idea of a minimum wage: okay, sure, there are bad ways of implementing it, but it's a right for a person to afford a livable wage whether they should have two jobs or just one (see Rerum Novarum).
-his reiterated claim that economics does not concern itself with ethics to then claim that honesty is necessary. See, all those disastrous Soviet plans weren't honest about what they were spending, either. Honesty is an ethical issue. Economics can be improved if the ethical system is taken into account: because you would not demand something that the market can't do (i.e. selling persons, "sex", all too common in the currently reigning cultural libertarianism-liberalism of the U.S. and Europe, which can be refuted in the following way:
[E]conomics are a set of ethics (against the Cartesian mechanistic conception), whose goal is obtaining of material goods useful to man [...] everything that exceeds this, once the needs of one own's state [of life] are satisfied, is superfluous and is not a [material] good if they are kept or used to satisfy the thirst of pleasures [...]
Therefore, economy is a part of prudence, as St. Thomas teaches, (II-II, q.51, a.3) whose goal is the right order of human actions towards one's own maintenance or that of family, or society. [...]
It is necessary that prudence, and with that economy, are subordinated to charity in a perfect way, which is the most excellent of virtues and without there can be no true virtue.
From what has been said follows that "economic laws are not purely physical as those of mechanics or chemistry, but laws of human action that imply moral values [...]
[G]ains as a good in themselves are not only forbidden by individual morality, but they are economically bad things that go against the goal of economy itself, because this goal is a human one" (Maritain, Religion et Culture, p. 46). Fr. Julio Meinvielle, A Catholic Conception of Economics
Precisely the Randian error of productive people only being valuable insofar as they keep the capitalist system going, which Sowell does not explicitly endorse, but doesn't warn against either, is a product of thinking of economics as happening in a vacuum (only with certain government intereference). Economics are for man, and not man for economics.
-his reiterated idea that the market only provides what people "need" and that consumerism is a good barometer (this is a word he redefined to his own liking, "the costumer is always right" is a bad moral guideline in general). We do have free will, we're not the slaves of companies, but we stilll very much might want stupid things.
-the inaccurate use of the word Third World: this word suggests political alignment and not economical status. I know this incorrect use is the norm among colloquial conversations, but this is not right.
-his reiterated idea that against protectionism many "Third World" countries opened the market and it all fixed. Nope, you can do it badly, the argie way. By creating an artificial equivalence among USD and Peso from 1 to 1.
-his complaints against the idea of a minimum wage: okay, sure, there are bad ways of implementing it, but it's a right for a person to afford a livable wage whether they should have two jobs or just one (see Rerum Novarum).
*** AUDIO BOOK REVIEW ***
Full disclosure - I've really enjoyed listening to Thomas Sowell's interviews and various talks on YouTube, and this is his first book I've read/heard. I also lean libertarian on most issues.
This book is a fantastic resource for those who want to dive a little deeper into economic theory and practice. Even though its title includes the word "Basic", the content is far from it. Clocking in at around 500 pages, Sowell covers the gamut.
There are tons of little golden nuggets in the book that I probably won't remember before I post this review, but here are a few:
1 - Sowell defines economics as the allocation of scarce resources that have alternative uses. The point is to figure out the most efficient and productive way to do this. Just because a nation or community has significant resources does not mean they're allocated effectively or efficiently. For example, he gives examples of how millions were starving in the Soviet Union when the country was blessed with some of the most fertile farmland in Europe. Another example is the number of homeless people in NYC sleeping on the streets, while there are more than enough boarded up housing units in the city to house them all.
2 - Money isn't wealth. Wealth is the goods and services that the money can purchase. This is why a country can't simply print money and become wealthy.
3 - We are not constrained by budgets. We are constrained by reality. We live in a world of scarce resources, so at no time will everyone be able to have everything they want. It's not reality.
4 - Most political policies (and people in general) only consider the immediate goals of a policy (such as price controls to keep rent prices in check) and completely disregard/ignore the consequences and incentives that the policy creates. People tend to look at the goal of a policy as justification for it, rather than the actual effect it has. We tend to look at what a policy could achieve, rather than what it is likely to achieve. Long-term consequences and ripple effects must be considered, and they almost always are not.
5 - Profits and losses are necessary for the efficient allocation of resources. These are the signals that tell a society that people want what someone is producing and they should provide more of it, or people don't want what someone is producing and they should use those resources elsewhere. Also, without profits, there is no incentive to invest or innovate.
6 - Economics is not a zero sum game. Many people think that in economics, if one person or nation wins, then by default the other person or nation loses. This is completely false. The reason the majority of the great fortunes of American history were created was by offering products at lower prices, rather than higher prices. If someone is able to do that, society benefits by increasing their standard of living (better products at the same price or the same product at a lower price, which frees up resources for other uses), and the person benefits.
There's so much I can't type it all here.
The one thing I do wish the author included more of is the other side of the argument (e.g. socialist, communist, etc.) and his rebuttal to those points. That would have made it a more well rounded and useful resource.
I highly recommend this book to anyone interested in economics and government, or libertarian ideas.
Full disclosure - I've really enjoyed listening to Thomas Sowell's interviews and various talks on YouTube, and this is his first book I've read/heard. I also lean libertarian on most issues.
This book is a fantastic resource for those who want to dive a little deeper into economic theory and practice. Even though its title includes the word "Basic", the content is far from it. Clocking in at around 500 pages, Sowell covers the gamut.
There are tons of little golden nuggets in the book that I probably won't remember before I post this review, but here are a few:
1 - Sowell defines economics as the allocation of scarce resources that have alternative uses. The point is to figure out the most efficient and productive way to do this. Just because a nation or community has significant resources does not mean they're allocated effectively or efficiently. For example, he gives examples of how millions were starving in the Soviet Union when the country was blessed with some of the most fertile farmland in Europe. Another example is the number of homeless people in NYC sleeping on the streets, while there are more than enough boarded up housing units in the city to house them all.
2 - Money isn't wealth. Wealth is the goods and services that the money can purchase. This is why a country can't simply print money and become wealthy.
3 - We are not constrained by budgets. We are constrained by reality. We live in a world of scarce resources, so at no time will everyone be able to have everything they want. It's not reality.
4 - Most political policies (and people in general) only consider the immediate goals of a policy (such as price controls to keep rent prices in check) and completely disregard/ignore the consequences and incentives that the policy creates. People tend to look at the goal of a policy as justification for it, rather than the actual effect it has. We tend to look at what a policy could achieve, rather than what it is likely to achieve. Long-term consequences and ripple effects must be considered, and they almost always are not.
5 - Profits and losses are necessary for the efficient allocation of resources. These are the signals that tell a society that people want what someone is producing and they should provide more of it, or people don't want what someone is producing and they should use those resources elsewhere. Also, without profits, there is no incentive to invest or innovate.
6 - Economics is not a zero sum game. Many people think that in economics, if one person or nation wins, then by default the other person or nation loses. This is completely false. The reason the majority of the great fortunes of American history were created was by offering products at lower prices, rather than higher prices. If someone is able to do that, society benefits by increasing their standard of living (better products at the same price or the same product at a lower price, which frees up resources for other uses), and the person benefits.
There's so much I can't type it all here.
The one thing I do wish the author included more of is the other side of the argument (e.g. socialist, communist, etc.) and his rebuttal to those points. That would have made it a more well rounded and useful resource.
I highly recommend this book to anyone interested in economics and government, or libertarian ideas.
Extensively researched and simply put, Sowell describes economics in a manner that is easy for anyone to understand.
Also lmao @ peak midwittery that believes that the US is anywhere close to a free market with it's central bank, extremely regulated industries, and corporatist govenrment.
Also lmao @ peak midwittery that believes that the US is anywhere close to a free market with it's central bank, extremely regulated industries, and corporatist govenrment.
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."