|
|
|
Professional economists are generally not known for being readable, but a happy exception is Hoover Institution Senior Fellow Thomas Sowell. In his latest book, Basic Economics, Sowell continues his lifelong work of providing clear and concise explanations of how economics applies to the real world, using logic and common sense instead of the graphs and equations that fill so many economics texts. As Sowell reminds us, economics is the study of scarce resources that have alternative uses. Or what about the hated word, "profits"? As Sowell points out, we have a profit and loss system. People tend to forget about the losses, although they are in a sense more important than the profits, because they force the businessman to use his capital wisely to fulfill his customers' expectations or be consigned to the dumpster. It is the reward of profit and the discipline of loss that magically cause resources to flow into production of things people want, and to flow away from producing things they don't want. Again and again, Sowell shows the reader that things are not always as they seem. Unions are a case in point. Do they really raise the wages of their members? Perhaps those lucky enough to keep their jobs do enjoy an increase in pay. But what about those workers who no longer have jobs in a given industry because artificially high-wage costs force businesses to replace many workers with machines? Union leaders may crow about the concessions they win for their workers, but they are quiet about those forced to find work elsewhere. Chapter after chapter, Basic Economics takes us through every facet of the economy, from the role of risk and incentive to the problems created by government intervention with the economy, to the thorny issues involved with taxation and international trade. Sowell challenges us to rethink opinions fostered by politicians and journalists whose skill in manipulating words far exceeds their understanding of what happens behind the scenes in a complex modern economy. In an age of mass communication and prepackaged ideas, when so often image seems to trump substance, Thomas Sowell is keenly aware of the critical importance of improving the layman's understanding of how the economy works. Economic literacy is the best antidote to Big Government fads and fallacies. Read this book and enjoy looking at the world with an invigorating new clarity. (Basic Books, 2000, 346 pps., $30) |
Mulling over that definition for a few pages serves to demolish the silly stories one can read every day in the newspaper about overwrought families forced to live within budget constraints, unable to afford everything they want. This is news? More accurately, it describes the human condition.
