Basic Economics: A Common Sense Guide to the Economy Hardcover – April 3, 2007

I have always enjoyed reading Thomas Sowell. He has the ability to make the difficult seem easy. Of course, as he points out in Basic Economics, the concepts may seem easy, but they are being misapplied all around us. How hard is it to understand that high prices attract resources? Yet, many states have laws against selling anything at a higher price during an emergency. They don't want people price gouged. But wait a minute, if the prices went up the higher prices would attract resources to the area where such resources were most needed. Instead, few resources are attracted to the emergency because of the pricing laws and the folks needlessly suffer.The more the government tries to rationalize the economy, the worse it makes the economy. What they think ought to happen seldom happens. Thomas Sowell gives the best arguments for a hands off the economy approach to government. I think he is correct. Let the market make the decisions. It has worked since 1776, but somehow that isn't good enough for a lot of people. People always think they are smarter than the market, or the market is somehow evil. But people are not smarter than the market, they do not have more knowledge, and the market is not evil or unfair. Only people and governments can be evil or unfair. A free market is neither.In my book The Super Summary of World History (Revised) I argue that Marxism and socialism think that free market results are evil because some prosper greatly and others suffer. Marx argues from a position of economic determinism that once capitalism is dead a wonderful new world will replace it. Capitalism caused evil because, Marx thought, everything flows from the economic system - literally. If the economic system changed so would the people. Thus, Marxism would change human nature, and with Marx's new economic system man would become a new person that would be free from capitalist's greed and fear. I say human nature does not change its basics and Marx was a dreamer. I believe Sowell would agree.Socialism does not go as far as Marx; however, I think socialism still relies on the death of capitalism to build a new world. Once the evil of capitalism is gone a new world will bloom because people will have more equality. Socialism aims at achieving equality by equalizing results. Not equalizing effort mind you, just results. The theory is that society exists before the person is born and every person is born into society which has schools, roads, businesses, money supplies and whatnot which all contribute to a person's success or failure; thus, ever failure is a failure of the group, and every success is a success of the group. Anyone who fails must be brought up to the group average as his failure is the failure of all and the responsibility of all. Also, one's success is the success of all; thus, the successful person owes society a large amount of his money and property to bring him down to the average of all the rest. I think this is both unfair and unwise. The failure or success of one is not the failure or success of all, and equality does not stem from demanding equal results no matter what the effort or insight.Basic Economics makes hash out of the Marxist and socialist theories. Knowledge is not something given out by society in neat little schoolbook packages. The knowledge is there for all to acquire most times, but key insights are not. Only by giving those with insight great rewards can we advance as a nation and a world. If the rewards are the same for everyone why take any risks? The risk takers often fail, and in fact they fail more often than they succeed. Only great rewards can justify taking great risks. Also, if all are rewarded the same, then how can we tell if one idea is better than another? Only the flow of money tells us what is a really good idea vs a poor one. To change successfully takes risks and insight, and to measure whether the change is good or bad takes an empirical way to measure the value of a product or service. The flow of money is that empirical measurement of value. This all flows easily from T. Sowell's insights.I love the book.AD2

I highly recommend this book to anyone.As much as I want to end the review with that statement let me say that I was a business major in college, have taken several economics courses, and was really doubtful that Mr. Sowell could write a whole book on basic economics without using graphs or mathmatical formulas.I was wrong.This book is about the practical side of economics that truly affect us every day. Even with the little back of background I did have I learned a lot from his real world examples and this book sparked my interest into other economics books that focus on the practical side of this profession.For anyone with an interest in this subject (the practical application of economics without having to know complex math formulas or use graphs) I would highly recommend the podcasts on [...] - The host Russ Roberts (An Economics professor at George Mason University) interviews many famous economists about many practical matters and how economics can be used to find solutions or answers. He is a funny and interesting host and the topics and discussions are always stimulating to listen to.I would also suggest the sequel to this book as well, Applied Economics: Thinking Beyond Stage One.

This is by far the greatest explanation of the free enterprise system I have ever read. And he does it with out any formulas or graphs. Maybe formulas and graphs should be forsaken in basic economics textbooks, based on the greater clarity in discussing economics here than in the average college textbook.The first four sections on microeconomics are the best. I wish everyone in America would read that part of the book as Economics 101. And he only displays a hint of ideology in those sections. He simply explains how businesses in a competitive market produces and allocates products so efficiently that a central organizing force isn't needed. It isn't ideological to show how this works, since most of the American economy actually works this way. Even many who have taken college economic courses don't seem to understand how real private markets work. Sowell explains it all here.The last three sections are a discussion of macroeconomics, and the book becomes more ideological at this point. It is also less convincing. These sections are also well written, but they aren't equal to the brilliant treatise of the microeconomics sections.For those who believe that the free enterprise system is over-rated, this is the one book for you to read to understand your ideological opponents. If you can refute the arguments made in this book, you will have succeeded in making a significant contribution to economic thought. Unlike many books you can find today in the bookstore, this is no straw man of free enterprise proponents.