[Updated Fifth Edition]
[Read by Tom Weiner]
An updated edition of the classic introduction to economics from one of America's leading economists.
In this fifth edition of Basic Economics, Thomas Sowell revises and updates his popular book on commonsense economics, bringing the world into clearer focus through a basic understanding of the fundamental economic principles and how they explain our lives. Drawing on lively examples from around the world and from centuries of history, Sowell explains basic economic principles for the general public in plain English.
Basic Economics, which has now been translated into six languages and has additional material online, remains true to its core principle: that the fundamental facts and principles of economics do not require jargon, graphs, or equations and can be learned in a relaxed and even enjoyable way.
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Review
''Clear and concise . . . Among economists of the past thirty years, [Sowell] stands very proud indeed.'' --Wall Street Journal
''At last there is a citizen's guide to the economy, written by an economist who uses plain English . . . A comprehensive survey.'' --Business Wire
About the Author
Thomas Sowell has taught economics at Cornell, UCLA, Amherst, and other academic institutions, and his Basic Economics has been translated into six languages. He is currently a scholar-in-residence at the Hoover Institution, at Stanford University. He has been published in both academic journals and such popular media as the Wall Street Journal, Forbes, and Fortune and writes a syndicated column that appears in newspapers across the country.
Top review from Australia
Damith Abeysekera
5.0 out of 5 stars Life shaping.
Reviewed in Australia on 12 July 2019
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A must have for everyone. What I love is how Sowell teaches you economic concepts through story telling and setting, making the knowledge memorable. And he puts it all into perspective of something that's actually relevant to my life. I feel I now understand how the world works better.
3 people found this helpful
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Top reviews from other countries
mister tom
5.0 out of 5 stars Basic Economics, or: What every person should know about economics!
Reviewed in Germany on 18 September 2018
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(At the time of the review, I read 50% of the book;
negative comes to the end)
The book was written by Thomas Sowell, who studied at Harvard as a black man in the 1960s and strongly condemned the affirmative actions! That alone is reason enough to take the book in your hand.
Sowell explains very precisely (partly too precise) how the economy works, and how various government interventions affect the economy. With an incredible number of examples from different parts of the world and at different times, it shows how the principle of supply and demand works down to the last detail. He
is aware that his theories are not based on ideologies, but on observations of the market. For example, rent price capping. I was deeply astonished, as Sowell explained by examples, that a government-imposed rental price brake entails more negative consequences than leaving the market free hand.
Even more surprised me that everything he predicts about rental price capping in his book 1:1 is observable in Vienna!
When a state covers the rents, several things happen:
1. Builders refrain from building new real estate because the real estate market has one of the slowest turnover rates, so capital gets back in droplets (over several years and through small payments (rents)). If you cover rents, the envelope will take even longer. And developers either farmer in other areas (where they get appropriate rent for their performance), or they build condominiums (where they get the capital back immediately, and are allowed to demand what the apartment is worth).
Medium and low earners can afford condominiums. In addition, hardly any new apartments are being built and the number of existing apartments without a rental price capping is increasing. On the other hand, if you
leave the market free, rents are rising, but as a result the new buildings are rising, because developers see that more profit can be generated from rents in this city than elsewhere. More is being built. The market is slowly saturating and rents are falling again. Until demand rises again. Simple law of supply and demand.
2. Existing apartments are only rented to people who reliably pay their rent. This means that you have to provide proof of income. Also, landlords prefer higher educated and higher earners in principle, because this social class pays the most reliable rent. And those who should actually benefit from the rental price brake (middle- and low-income earners) won't get an apartment.
3. Apartments which become unprofitable due to the price capping because the operating, renovation and maintenance costs exceed the rental income will no longer be rented. The landlords understandably do not want to economise into the minus. As a result, houses and apartments that are affected by rental price brakes expire. The City of Vienna solves this problem, for example, by penalties for vacancy.
So why are rental price cappings demanded by politics at all? Vassilakou demanded a cap price in 2013 and Kern demanded it in 2018. Why? Because with this polemic, you can definitely beat good political change. Nobody likes to pay rent. But one should consider it a service. After all, I don't pay for a train ticket because I don't want to pay a fine if I get caught driving black. I pay for a train ticket because I use a service. For the same reason I also like to pay rent, because I do not want to sleep on the street and want to pay the landlord for his provision of his living space to me a fair price.
And that brings me to the last point:
Sowell can be summarised well in one sentence:
The allocation of scarce resources with alternative uses.
This sentence is read once every few pages. He's becoming a mantra. The first time I emphasized him, but because I read him so many times, he passed into flesh and blood.
In the end, the economy is concerned with the distribution of limited resources, which also have other uses.
Example living space.
Not everyone can live in the capital! Why? Because there's not enough room for everyone. In a market economy system, the (fluctuating) price regulates the distribution. An apartment on the Kärtnerstraße is now more expensive than an apartment in the 10th. Because the neighborhood is different, because the quality of life is different, because the offer is different.
A rental price capping puts all apartments at the same price level in one fell swoop.It is no longer the individual who votes with his money, but the state decides what to cost an apartment. (Here, the socialist tendencies of the deaths of responsibility can be seen well.)
A second (short) example:
I read Marx's capital (in excerpts). It sets the value of 1 skirt and 20 cubits canvas. According to him, you can reverse the equation as often as you like, 1 skirt = 20 cubits canvas; and 20 cubits canvas = 1 skirt. But
that's not true.
Sowell teaches: The newspaper is worth more to the buyer of a newspaper than the one euro he pays. And the seller is worth one euro more than the newspaper.
There is a moment of profit that Marx thought was greedy and unjustified (because why should I pay more for a product than it actually costs?!) , and Sowell declared necessary (Because profit/profit incentives are to trade at all!).
Overall, Basic Economics is one of the three best books I've ever read and that absolutely every person should read once a year!
-Basic Economics; Thomas Sowell
-Explaining Postmodernism; Stephen Hicks
-Gulag Archipelago; Alexander Solschenytzin
Negative:
Two negative comments on Basic Economics:
First, it is extremely long and it we repetitive (but no less exciting), especially because the mechanisms largely the same stay. But you could shorten the book to a third and still cover most of it.
Secondly, capitalism does not have its justification everywhere. I would add to Sowell that privatisation is positive everywhere,
except in quasi-monopolies, such as water supply, electricity supply, universities, schools, hospitals, road construction, etc.
I am very glad that I can go to school and university for free in Austria and not to pay 100,000 euros in debt in order to provide me with tertiary education.
And yet I find the book a MUST for every citizen of the age! Just to be able to understand the mechanisms and consequences of the market.
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119 people found this helpful
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Translated from German by Amazon
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Miss Jk Atwal
5.0 out of 5 stars Five Stars
Reviewed in the United Kingdom on 4 November 2017
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This needs to be given to every 18 year old, the future of our economic prosperity depends on it.
58 people found this helpful
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Lawrence Timme
5.0 out of 5 stars My first economics book.
Reviewed in the United Kingdom on 29 September 2018
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This was my first book on economics and i have to say it does what is says on the cover. It is in plain English with not much technical language so it is easy to understand. it also builds everything up in a sensible order.
37 people found this helpful
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Book Lover
5.0 out of 5 stars The best book on economics for the general reader
Reviewed in the United Kingdom on 12 March 2021
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Thomas Sowell is one of the greatest men you've never heard of - a black guy from Harlem, who joined the US Marines from school in the 1950s, and became a mature student, and finally an economics professor, Sowell is a one-time Marxist who turned to the Chicago school.
Even if you disagree with his conclusions, you will enjoy his clear writing style and the anecdotes and stories he uses to illustrate what can otherwise, and in other hands, be quite dry themes.
I recommend his other books and his many YouTube videos.
12 people found this helpful
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Anon
5.0 out of 5 stars One of the best books I've ever read
Reviewed in the United Kingdom on 5 October 2018
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Thomas Sowell offers a clear and profound understanding of human society and politics through basic economic principles. Everyone who is of voting age should read this.
30 people found this helpful
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