Basic Economics: A Citizen's Guide to the Economy PDF
Preview Basic Economics: A Citizen's Guide to the Economy
BASIC ECONOMICS BY THE SAME AUTHOR Economics: Analysis and Issues Classical Economics Reconsidered Knowledge and Decisions Mmxism: Philosophy and Economics Say's Law BASIC ECONOMICS A Citizen’s Guide to theE conomy THOMAS SOWELL A Member of the PerseusB ooks Group Copyright 0 2000 by Thomas Sowell Published by Basic Books, A Member of the PerseusB ooks Group All rights reserved. Printed in the UniteSdt ates of America. No part of this book may be reproduced in any manner whatsoever without written permissionex cept in the case of brief quotations embodied in critical articles and reviews. For information, address Basic Books, 10 East 53’dS treet, New York, NY 10022-5299. Library of Congress Cataloging-in-Publication Data Sowell, Thomas, 1930- Basic economics : a citizen’s guide to the economyT/ homas Sowell. p. cm. Includes bibliographical references and index. ISBN 0-465-0183 8-X 1. Economics. I. Title. HB171 .S73 2001 33O--dc21 00-044420 FIRST EDITION 010203/10987 A few lines of reasoning can changeth e way we see the world. Steven E. Lansburg This Page Intentionally Left Blank CONTENTS PreJace ix Acknowledgements xi 1 What Is Economics? 1 PART I: PRICES 2 The Role of Prices 7 3 PriceC ontrols 21 4 An Overview 39 PART 11: INDUSTRY AND COMMERCE 5 The Rise and Fall of Businesses 59 6 The Role of Profits-and Losses 73 7 Big Business and Government 89 8 AnO verview 105 PART 111: WORK AND PAY 9 Productivity and Pay 127 10 Controlled Labor Markets 149 11 An Overview 167 ... Contents V211 PART IV: TIME AND RISK 12 Investment and Speculation 175 13 Risks and Insurance 193 14 AnO verview 207 PART V: THE NATIONAL ECONOMY 15 National Output 215 16 Money and the Banking System 223 17 The Role of Government 237 18 An Overview 261 PART VI: THE INTERNATIONAL ECONOMY 19 International Trade 269 20 International Transfers of Wealth 283 21 An Overview 297 PART VII: POPULAR ECONOMICF ALLACIES ~ 22 "Non-Economic" Values 305 23 Prices and Purchasing Power 315 24 Business and Labor 329 25 An Overview 343 Sources 347 Index 359 PREFACE This is an introduction to economics for the general public. The growing sophisticationo f professional economistsh as not been ac- companied by any greater spread of knowledge about basic eco- nomic principles amongth e population at large. There arei,n fact, very few incentives for economists tsop end their time explaining the basics of economics to the public. Indeed, even the economic education of college students is not likely to get much attention from economists,if those students are not majoring in economics. The net result is that complex and high-powered economic analysis within the profession co-existsw ith utter ignorance and gross fallacies dominating the public, the media and various branches of government. Even scholars with Ph.D.s in other fields are often ill-informed or misinformed about economics, though that seldom deters them from having and voicing opin- ions on economic issues. Most of us are necessarily ignorant of many complex fields, from botany to brain surgery. As a result, we simply do not at- tempt to operate in those fields. However, every voter and every politician that they vote for has something to say about econom- ics. In that case, we need to know the basics. Explainingt hese ba- sics ist he purpose of this book. It so happens that the first book of mine that was published, back in 1971, was ani ntroductory economics textbook,f ull of the kinds of graphs and equations that such books are supposed to have. Today, however, Basic Economics does not contain a single graph or equation to express the kinds of ideas that economists deal with. Nor does it contain such common jargon among econ- omists as ”oligopoly,” ”marginal revenue product” or ”Pareto op- timality.” This book aibs out economics, not about the vocabulary or visual aids of economists. Having taught introductory eco- nomics more timesth an I can remember,a t colleges and universi- ties across the country, I know how handy those visual aids can ix
The list of books you might like
