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I heard that Basic Economics by Thomas Sowell is a good book for a layperson to get a feel for how the economy works. I have also heard some criticisms but they seem to be based on Thomas Sowell's political views. I have read 2 academic journal reviews of Basic Economics and they both say it is very good with some minor criticisms.

These are the journal reviews i have read:

  1. https://doi.org/10.1016/j.jebo.2004.09.004
  2. https://doi.org/10.1119/1.2715436

Would you recommend this book?

1muflon1
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ApplePiePoodle
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    Not sure my answer follows the rules so just going to comment. This book was the first economics book I ever read and it really took my understanding from 0 to 1. I was satisfied enough to not have to reach for any other resources and now know how to interpret so many real world situations in terms of economics. One drawback is it's left a big gap in my understanding of how socialist systems like public healthcare ought to work (maybe because Thomas Sowell is politically right leaning). – Alexander Soare Jun 29 '22 at 20:32
  • I think Thomas Sowell's impression of socialist systems like public healthcare is that they only work in the sort run but not in the long run. Eg. unemployment benefits leads to higher unemployment rates or something like that. But i am not an economist(as the post title implies) and i (at the time of writing) haven't read Basic Economics. So i might be wrong here. Thanks for your answer! It is good to know that this book helped you a lot. Makes me excited to read it myself. – ApplePiePoodle Jun 29 '22 at 20:44
  • Why not first read the book? Have you not heard it said that to become an expert in any field - including Economics - one needs little more than to read half a dozen texts?

    Which half-dozen is your choice, and if Basic Economics by Thomas Sowell has been recommended, why not read it?

     – Robbie Goodwin Jun 29 '22 at 21:40
  • https://skeptics.stackexchange.com/questions/53492/do-homeless-people-in-the-usa-refuse-to-work is another question referring to Thomas Sowell. You may interpret it as a character reference. – quarague Jun 30 '22 at 10:53

2 Answers2

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I heard that Basic Economics by Thomas Sowell is a good book for a layperson to get a feel for how the economy works. I have also heard some criticisms but they seem to be based on Thomas Sowell's political views.

I think both of the things you heard about the book are valid. The book is very good at explaining some basic economic concepts such as scarcity and trade-offs, how markets operate and also has a lot of illustrations of very important concept in policy economics of unintended consequences.

On the other hand you can definitely see a libertarian slant in the book. For example, the book presents mainly examples of various government interventions that failed due to unintended consequences, but does not always mention more nuanced policies that were successful. This can give reader misleading impression about role of government in the economy. Also, I do not think his treatment of minimum wages (in the fifth edition) provides fair overview of a literature (although it takes stance that has slighter majority support among economists, this issue is controversial with profession not reaching proper consensus yet see IGM poll).

This being said the book was written in 2000, and while by 2000 standards it would be fair to say its has political slant by 2022 standards when even AP often interjects some political commentary into their reporting its barely noticeable.

Would you recommend this book?

That depends on what your objectives are. The book will definitely explain very well basic concepts in economics and also what economics as a subject is. Then it will also give you a lot of illustrations of how some crude interventions in the economy lead to unintended consequences, which is again something that everyone should probably know.

But at the same time it has libertarian slant in a way that it nudges reader toward the conclusion government policy is ineffective by mainly presenting failures of government policy. This being said, as long as you read the book keeping in mind that there is more to government policy, then still most of the examples Sowell mentions are valid examples of failures that result from policymakers often ignoring basic economic principles.

If you would want some book for a laymen that is more neutral I would recommend:

The Economics Book: Big Ideas Simply Explained - I think this is the most neutral laymen economics book on the market. Its essentially like a high-school textbook but written in fun way that is more accessible.

The book is still well written, although one has to admit that the basics are probably better explained by Sowell.

You can also read both of the books Economics Book is more comprehensive despite basics being less well explained. So despite there being some overlap you would still gain more from reading both.

1muflon1
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  • Thanks for your detailed answer! So just to be clear. Basic Economics by Thomas Sowell is a great book to get a laymans understanding of economics. You just have to keep in mind the libertarian slant in the book. – ApplePiePoodle Jun 29 '22 at 20:46
  • @ApplePiePoodle yep pretty much, also its not that horrible when I was studying policy economics at university my professor who was personally very left leaning (I know that because he was also my thesis advisor) still put it on our reading list. But you definitely should not let yourself to be 'nudged' into conclusion that state has minimal role in economy because public policy can't be done properly based on the overrepresentation of government failures as policy examples in book. As long as you read it keeping in mind those are examples of the unintended consequences principle not general – 1muflon1 Jun 29 '22 at 21:00
  • economic truth that government policy always fails you will be fine. – 1muflon1 Jun 29 '22 at 21:05
  • The book assumes that humans are rational profit maximizers. This is often a good model, especially for economic questions but in some situations it fails completely at predicting how real life human beings behave. This concept gives a good approximation as the when and why the model assumptions do not match real world observations. – quarague Jun 30 '22 at 07:51
  • @quarague 1.it assumes it are rational utility maximizers. 2. That is still the standard assumption of profession and it’s considered part of the basics. 3. As you say it’s still actually fairly good approximation- in economics rational just means consistent - being flat earther or anti-vaxxer can be 100% rational if it’s consistent with the beliefs of agent. Rationality is a special terminology that doesn’t equate to being “smart”. Irrationality in economics means your behavior is somehow inconsistent with your preferences (eg hyperbolic discounting would be an example of rationality failing) – 1muflon1 Jun 30 '22 at 09:36
  • @1muflon1 We agree on 1. and 2. and the most of the time part of 3. Whether in a situation where the model fails to predict real life behavior real humans are rational utility maximers anyway but the utility is way to complicated to accurately model or whether humans are not rational utility maximizers to me is just semantics. Not everything that humans perceive as utility can be measured numerically and pressed into a model. – quarague Jun 30 '22 at 09:59
  • @guarague "Not everything that humans perceive as utility can be measured numerically and pressed into a model. " <- what do you mean by that? That is not true A) just because something cannot be measured doesn't mean it cannot be put into a model. For example you could have utility function of fulfilment $f$ given by $U(f)=\alpha f ^{\beta}$ even if you dont know what number alpha, beta or f you can still derive a lot of useful results without any measurement at all. B) Actually if humans perceive utility of something it can be measured by observing their behavior and or running experiments – 1muflon1 Jun 30 '22 at 10:06
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I like this book. I'm a nonspecialist in this field and I have bad relationships with math but this book is a really nice one. I usually prefer some drama books (the glass menagerie quotes are amazing ones) but I need to develop myself in different ways. So if you have the same goal - read it.

Tom Barry
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