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

 References 

Category:2000 non-fiction books
Category:Basic Books books
Category:Books by Thomas Sowell
Category:Books about capitalism
Category:Books about conservatism