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Many will find the full title of Thomas Sowell’s book, Basic Economics:
A Citizen’s Guide to the Economy somewhat intimidating. The starkly plain pinkish-red cover and the subject of the
book, ECONOMICS, don’t help. Despite all this, Basic Economics is actually very reader-friendly. It is
a book that is, first of all, intended for general reading, not for use as a textbook (though it certainly can be, as will
be discussed later). One of Thomas Sowell’s stated goals is to minimize the use of jargon. While some "technical" terms
are used, it is only as needed, and Mr. Sowell is careful to help the reader understand what the terms mean. Basic Economics
presents the reader with a very interesting and practical balance of principles and illustrations.
Another of Mr. Sowell’s stated goals is to focus on principles about
which most economists agree, and that are not specific to any one economic philosophy - e.g. capitalism or Marxism. While
I believe this goal has been achieved at the principle level, the applications and examples from history and current affairs
cited clearly demonstrate Mr. Sowell’s inclination toward a marketplace economy, rather than a command or highly regulated
economy. Basic Economics tends to focus on the workings of economic institutions, marketplaces, and functions that
operate most freely in market economies. In the process of doing this, Mr. Sowell responds to many popular liberal and Socialist
ideas and criticisms.
Basic Economics is
divided topically into seven sections, its 24 chapters being evenly distributed among the sections.
The Introduction and Section I, "Prices and Markets", defines
"Economics" and covers the law of supply and demand, and points out how government attempts to control the marketplace by
trying to bypass these laws often become the root of serious systemic problems.
Section II, "Industry and Commerce", discusses the incentives that motivate business, the critical role of the distribution of knowledge in market and
planned economies, the needs for businesses to be efficient and responsive to their customers, and the myths and realities
of "big business" management, monopolies, cartels, and anti-trust regulations.
Section III, "Work and Pay", is about the marketplace for labor, the education and career choices people make, career mobility, the gap between
the intentions of unions, minimum wage laws, and job security laws and their real effects.
Section IV, "Time and Risk", discusses the kinds of investments and looks at how investors undertake and manage risk, and in the process, benefit
producers and consumers. The legal climate needed for investment is discussed, as are financial institutions that help spread
and manage risk.
Section V, "The National Economy", examines how to measure what a nation produces, money and the effects of inflation and deflation, fractional reserve
banking, the actions and functions of government that can encourage or hinder economic progress, and warns of manipulative
politicians and of popular economic fallacies.
Section VI, "The International Economy", discusses international trade (how it is usually mutually beneficial, not a zero-sum game where "winners" balance
"losers"), why countries with high wages can still be competitive in trade, how government regulation of trade (tariffs, quotas,
anti-dumping laws, red tape) often hurt the country imposing the regulations, and myths such as "exploitation" and imperialism.
Section VII, "Special Economics Issues", looks at fallacious myths and emotive
ambiguities that pressure groups and politicians use to ignore and dodge accountability for the harm their economically foolish
regulations and laws cause.
It is difficult to do justice to the breadth of topics Basic Economics
covers, and the brief summary above cannot convey how well Thomas Sowell uses examples from real life to make interesting
what some have called, "The Dismal Science". Making Economics "alive" and interesting to readers is not an easy undertaking,
but in my opinion, Mr. Sowell has succeeded.
I would definitely recommend this book for anyone high school age and above.
Some readers will, undoubtedly, disagree with some (perhaps many) of Mr. Sowell’s ideas and conclusions, but they will
still learn much, including in those very areas of disagreement. While Mr. Sowell wrote Basic Economics primarily for
general reading, as noted above, the book can also be used as a textbook. Its chapter and section divisions make scheduling
reading and discussion assignments fairly easy, and its section questions at the back of the book are suitable for verbal
discussions or as essay-test questions. As far as I know, no "Teacher’s Edition" or answer key is available, so teachers
and homeschooling parents using Basic Economics as a textbook will have to rely on what they already know, or on reading
Basic Economics as their student(s) read it. Think of the latter expedient as a learning opportunity.
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