Basic Economics

***Basic Economics*** is a non-fiction book by American economist Thomas Sowell, published by Basic Books in 2000. The first edition was subtitled _A Citizen's Guide to the Economy_, but from the third edition in 2007 onwards it was subtitled _A Common Sense Guide to the Economy_.

The book explains how societies create wealth or poverty for their people depending on how their economies are organized.

## Content

In the introduction to the fifth edition, Sowell says he wrote the book in plain English so anyone can understand economics. The book does not include charts or graphs.

According to reviewer R. Bastiat in 2004, the book begins with a chapter on the basics of economics, focusing on scarcity and trade-offs. It then has six main sections, each made up of short chapters and ending with a summary. The six main sections are Prices and Markets, Industry and Commerce, Work and Pay, Time and Risk, The National Economy, and The International Economy. The revised edition also adds a final section called Special Economic Issues.

The book covers the role of prices, incentives, competition, price controls, opportunity costs, trade-offs, taxes, and subsidies. The section on industry and commerce looks at how markets help organize production and distribution, and it discusses profit and loss, specialization, monopoly, antitrust, economic regulation, and the differences between markets and central planning. Sowell also discusses minimum wages, income distribution, social mobility, and poverty.

In a 2004 review for the _Cato Journal_, R. Bastiat called _Basic Economics_ "an exciting guide to the basics of microeconomics, macroeconomics, financial markets, and international trade," noting that it uses clear examples to explain each point. He especially praised the Time and Risk section for covering topics that are usually overlooked in introductory courses.

## Reception

James Higgins wrote in _Claremont Review of Books_ that the book is a clear and logical introduction to economics for readers without formal training. He noted that Sowell does not take sides on complex economic debates where experts disagree.

Edmund A. Mennis wrote in _Business Economics_ that Sowell gives good examples of how government controls can have negative effects, and how profits and losses in free markets guide resource use. He called the book "an excellent gift for someone who wants to learn about economics without complicated graphs, charts, or equations."

However, the book has also been criticized. Josef Gregory Mahoney, a Marxist scholar and professor at East China Normal University, argued that Sowell's books are "ahistorical" and that readers cannot fully trust them without knowledge of history. A reviewer in _Kirkus Reviews_ suggested that Sowell's views are not completely neutral and that he downplays the effects of institutionalized racism, writing that "Sowell’s economics in a social vacuum is as meaningful as color in the absence of light."

The book has also been reviewed in academic journals such as _The Appraisal Journal_, the _Journal of Economic Behavior & Organization_, and twice in _The Physics Teacher_.

## Related pages

- Government agency
- Laissez-faire
- Rent control
- Supply and demand

## Infobox (book)

- **name**: Basic Economics
- **image**: Basic Economics by Thomas Sowell (Fifth Edition).jpg
- **caption**: Fifth Edition cover of _Basic Economics_
- **author**: Thomas Sowell
- **country**: United States
- **language**: English
- **publisher**: Basic Books
- **pub date**: 2000
- **media type**: Print
- **pages**: 366 (first edition), 704 (fifth edition) (hardcover)
- **isbn**: 978-0465081387
- **preceded by**: Intellectuals and Race
- **followed by**: Wealth, Poverty and Politics