This book is one of the most disingenuous and tendentious books I have read in some time. Coming from the UK I had never heard of Thomas Sowell: having read the book I now see that he is clearly a man with an axe to grind - and boy can he grind. In the crazy world of Thomas Sowell the real world behaves just like the text book world of general equilibrium theory. In this world prices serve only to clear markets (there is no information content); competition is 'perfect', and insofar as monopoly or oligopoly does exist - you guessed it - it's the Government's fault and can best be eliminated by - you guessed it again - the market. In the crazy world of Tommy everyone is rational (we're not - have you heard of behavioural economics Thomas?); everyone has perfect information (we don't, in fact that is the very reason we have brands); and, above all, there are no economic rents - in fact economic rent isn't even mentioned in the index presumably because all rents get competed away in Tommy's perfect market place. Of course, the great thing about economic rent is that it can be appropriated by workers, by Governments - or even by capitalists for that matter - without changing the economic incentives on anyone. Did you get that Tommy? This means that taxation can be re-distributive and that unions can bargain for higher pay, and that capitalists can earn super normal profits without affecting the efficiency of the economy as a whole. So the distribution of income turns out to be a political question as well as an economic question after all. There are many other deliberate distortions in this book too numerous to mention. Don't read it, above all don't buy it - otherwise I fear you will be guilty, like me, of the misallocation of scare resources for which there are alternative uses. Indeed, given that I think the calorific value of this book is higher than the education value, you know what the cast iron laws of economics require me to do with it...

This book is an excellent introduction to basic economic concepts and how they play out in society. Sowell clearly explains how a free market economy should work and what goes wrong when politicians interfere in the name of compassion. Everyone who votes should read this book. Yes, Sowell is a conservative. But why should that matter? This book is about economics and Sowell is an economist. He only touches on politics in regards to political intervention in the free market economy and how its consequences are rarely the same as its intentions. Society as a whole would be so much better off if they understood basic economic prinicples--regardless of politcal affiliation.

One caveat, the original edition was in serious need of a editor. Hopefully this new edition has been proofed.

"Economics is a study of the allocation of scarce resources which have alternative uses." - p.1 (and many others)

"In a sense, it is unfair when some people are unable to earn as much as others with similar skills, diligence, and other virtues. Yet this unfairness to particular individuals is what makes the economy as a whole operate more efficiently for the benefit of vastly larger numbers of others." - p.20

"Incentives matter because most people will do more for their own benefit than for the benefit of others." - p.46

"Individual freedom, competition and prices add up to what is loosely called 'the market'". - p.308

Having taken no formal college courses in economics but wanting to brush up for graduate school (and my own edification) I purchased Thomas Sowell's "Basic Economics" and committed the foremost sin of all bookworms in judging a book by its cover, assuming from its title that it would solve all my needs. Well, it did and didn't. I want more economics! I had started at the very beginning with who else but Adam Smith and his revolutionary "Wealth of Nations". I didn't get too far before I realized that something more up to date and brief would probably be more enticing. Smith is historically vital, but his theories have been greatly improved upon over the past hundred years. For the most part I found Sowell's overview of economics easy to follow. He does an excellent job at breaking down supposedly "complex" economic concepts into the understandable nuts and bolts of a price-coordinated capitalist economy. In doing so he misses few opportunities to explain to us why our system works, and why others (notably the former Soviet Union's) didn't. There are many awkward moments when Sowell appears to be promoting a conservative, or perhaps a libertarian agenda, and this can be difficult for us "unconverted economic neophytes" to swallow, although in retrospect many of his arguments are obviously rooted in his unwavering enthusiasm for what sounds suspiciously like laissez faire economics. I was interested to read his grudging concession of certain specific duties to the government (such as the EPA, and the military for example) which would never form of themselves if left solely to the laws of supply and demand. In his chapter on "External Costs & Benefits" he begins by admitting that, "Economic decisions made through the marketplace are not always better than decisions that governments can make". Bravo!

I learned a lot from this book despite its all too frequent errors of punctuation, and very poor editing by Basic Books & Co. There's an anecdote referring to the Soviet Union on pgs. 43-44 for example, which is repeated verbatim in a footnote on pg. 75, re-used so as to illustrate two different points - efficiency indeed! This from the 2000 first edition (green cover), and so I imagine, and hope that the revised red cover edition corrects these sadly printed errors in punctuation and sentence structure. Also, I learned from this book in spite of Mr. Sowell himself. I think he tends to get in the way of his own arguments a little too often, and his book would have benefited had he made an effort to include more representative arguments on controversial political issues like rent control, unemployment/job creation, protectionism/tariffs, worker exploitation, minimum wage laws, job security, the enivironment, socialism, and so on. The weak representation of most of these important subjects makes it easy for Mr. Sowell to steam-roll with the invincible glory of his "Basic Economics". Most of the time he is convincing, but you'll need an open and diplomatic mindset to enjoy him. Otherwise, you'll definitely find his treatment of many subjects irritatingly simplistic and incomplete. Sowell himself points out in Chapter 22 on "Non-Economic Values" that, "Economics is not a value in and of itself. It is only a way of weighing one value against another" (p.305). Whether or not he adheres to this sentiment throughout his book is debatable.

Nevertheless, "Basic Economics: A Citizens Guide to the Economy" should be more widely read, and ought to be rated here with four or five stars based on its instructive value alone. Regardless of political beliefs, you'll learn about fundamental economic concepts such as costs, prices, surplusses/shortages, supply/demand, inflation/deflation, incremental trade-offs, incentives, and ultimately, you'll come away from "Basic Economics" having learned "...the tools for evaluating policies and proposals in terms of [their] logical implications and empirical evidence."

In addition to this book, I've also purchased Charles Wheelan's, "Naked Economics" which professes to accomplish exactly what Mr. Sowell set out to do (basics with no graphs or charts), but supposedly does so in a more "even-handed manner" according to Amazon reviewers. And for the "other side" there is always Marx's "Communist Manifesto" or "Das Capital", and "Socialist Thought - A Documentary History" edited by Albert Fried & Ronald Sanders.

"Economics is the study of the use of scarce resources which have alternative uses."

From this simple premise, Dr. Thomas Sowell, one of the most analytically brilliant minds of the 20th century, explains a subject that has forever baffled and frustrated many a college student, government official, and your average layperson (present company included). Basic Economics: A Citizen's Guide to the Economy explains economics in a way that I have yet to see done anywhere else: in laymen's terms. No fancy graphs or charts - just an easily readable explanation of basic economic principles that everyone - even our political leaders - can understand.

Dr. Sowell uses historical and present-day examples to explain the basic economic principles of supply and demand, the role of prices, free-market competition, investment and risk, the role of business and government, and international trade. The book clearly explains how and why these principles work when applied properly, and the negative consequences when they are either applied improperly or not at all. Examples include the economies of socialist societies; examining why goods and services are more expensive on average in low-income neighborhoods than in the suburbs; the effects of rent control policies, minimum wage laws and protectionist trade restrictions; and how policies implemented during the Hoover and FDR years only served to unnecessarily worsen (and maybe prolong) the Great Depression.

Dr. Sowell brilliantly uses the former Soviet Union, a region of the world rich in natural resources and, thus, enormous economic potential, as the benchmark for the disastrous long-term economic consequences of policies implemented in a centrally planned (as opposed to a free-market) society. In numerous cases he shows that

"The Soviet Union did not lack for resources, but was in fact one of the most richly endowed nations on earth. What it lacked was an economic system that made efficient use of scarce resources. Because Soviet enterprises were not under the same financial constraints as capitalist enterprises... they were not forced to economize - that is, to treat these resources as both scarce and valuable in alternative uses."

Basic Economics encourages the reader to consider public policy issues in terms of the incentives created and their ensuing consequences, rather than their proclaimed goals. As the author points out, economics is not the study of the validity of such lofty social and moral goals as "affordable housing" or "a living wage." The reader will be in a position to examine the incentives and consequences of the actions taken in the name of these and other goals, as opposed to simply dwelling on how wonderful they would supposedly be if achieved.

Distinguishing between incentives and goals is particularly important when examining the political incentives of government officials. Dr. Sowell shows that most politically motivated laws and policies are not only devoid of even a basic understanding of economics, but can also lead to consequences far worse than either doing something "less popular" or doing nothing at all.

In the section dealing with international trade, Dr. Sowell explains why predictions that "a giant sucking sound" would accompany American jobs moving to Mexico in the wake of the North American Free Trade Agreement of 1993 (NAFTA) never came to past. I am not sure what sound goes with an increase in American jobs, including over 100,000 jobs created in the automobile industry over a six-year period, but that is exactly what happened after NAFTA went into effect. As the author points out, this should not have surprised anyone with a basic understanding of economics. International trade is not a zero-sum game; nations trade with each other because both parties expect to benefit.

The final section of the book examines common economic fallacies which, though they sound good, do not stand up to scrutiny. Examples include defining "non-economic values," the role of prices, and business and labor.

If there was ever a book available for public consumption that enables the average layperson to examine laws, policies and programs more objectively and critically (and less emotionally), thus becoming a more enlightened and better-informed citizen, Basic Economics is just such a book. Dr. Sowell has rendered a tremendous service to his fellow man.

This book is must reading for anyone who wants to understand the facts regarding the allocation of scare resources that have alternative uses. So often the uninformed ask that if "America is the richest country in the world, why are there so many poor people, children without computers, people without adequate health care, individuals with sub-standard housing etc..?" Well, this book clarifies the conumdrum of wealth and scarcity.

College courses generally focus on the "mathematics" of economics without defining the key messages, problems and issues. Dr. Sowell's work provides clarity to a complex subject that few citizens understand. One of the best points made in the book is that differing economic systems (e.g. capitalism vs. communism)tend to deal with the same economic problems. It is only the approach to addressing them that differs. For instance, in a free market system like the US, scarce resources such as waterfront property are allocated through market pricing; in a communist system, like the former Soviet Union, waterfront property is allocated by government decision makers utilizing arbitrary allocation rules. Clearly, Dr. Sowell is a free market economist and doesn't hide it (in this or any of his other writings). Despite his economic/political leanings, he objectively illustrates how scarce resources with alternative uses are allocated in different economies. Liberals will have trouble with this book because the "feel good" approach is supplanted by facts, logic, reasoning and rational analysis.

As noted in some of the other reviews, the editing left a lot to be desired (i.e. why I assigned 4 stars instead of 5). Hopefully, Dr. Sowell and/or his representatives will take better care in his next project. Notwithstanding this shortcoming, the messages come through quite lucidly. This book should be required reading for every high school graduate.