A must read!
Such a shame that due to the useless left-right dichotomy of the modern politics lots of people will dismiss Sowell as an ideological enemy.
Most of the people who could benefit from reading this book will probably never read it.
But for those who are not slaves to the tribal wars of politics: this is a book full of enlightened wisdom and, obviously, common sense, plus lots of relevant information.
I love graphs and formulas but so often we are lost in the scrupulous study of details, never grasping the essentials and understanding the big picture.
That is precisely what this book helps us to avoid.

Great intro to basic economics. Thomas gave tons of examples as he weaved through the big topics in economics. I'm sure there are other more detailed books but this gives you a starting point on how to think.

A great introductory to economics. An eye opening and a life changing book!

Buckle up as Sowell takes you on a roller coaster ride of emotions as you encounter rent control, minimum wage laws, and a plethora of other economic facts, fallacies, and fun. Perfect for that budding economist who loves to read long, school textbook-like books. I feel I've learned a lot and it was interesting to hear from a different perspective. It took a longer than usual time to read, but quality over quantity definitely applies here.

This book is a fantastic summary of almost every major economic question. It’s full of logical arguments, abundant research, and vivid examples to present economic realities as they are. Sowell masterfully tears down myths floating in the public discourse around rent control, “price gouging,” monopolies, labor exploitation, trade, Wall Street, the 1%, and many other hot-button issues. For me, it’s most enduring (and harrowing) idea is: “There are no solutions, only trade offs.” A must-read.

To paraphrase Winston Churchill:

If a man is not a socialist by the time he is 20, he has no heart. If he's still a socialist after reading this book, he has no brain.

Definite must read. Sowell has the ability to take what many would label as complicated and translate it into the jargon of everyday people. This is a tremendous overview of economics and the issues pertaining to it that are relevant in our present political discourse.

Economics is almost its own language, it takes a while to get used to the terms and analysis, but this book does an excellent job of orienting the reader to that world. It's long and in-depth, but I never felt that it was ponderous. The author has a readable, logical style and uses great examples. Some argue that the book is "conservative," but it rather gives facts and principles that need to be accounted for in any political or fiscal ideology. The main idea is to be able to look beyond the initial consequences of an economic policy and to cut through terms and ideas that can be misleading. It effectively trains the brain to think "economically."

If you want an overview of economics without graphs and charts, this is the book for you. Sowell uses historical evidence to prove his points. Here is a quote from the book on why you should read it:

“Perhaps the most important distinction is between what sounds good and what works. The former may be sufficient for purposes of politics and moral preening, but not for the economic advancement of people in general or the poor in particular. For those who are willing to stop and think, basic economics provides some tools for evaluating policies and proposals in terms of their logical implications and empirical consequences.”

Almost everyone has been exposed to discussions regarding economics, but almost nobody truly understands it. Thomas Sowell in Basic Economics shows you why economics is something everyone should understand, and something everyone can.

Basic lays out the concepts and foundations of the discipline and then builds on them to paint a vibrant and coherent picture of the workings of the world, letting you view the functioning of society in a whole new way. Reading the book is like putting on glasses for the first time: you see the world more clearly.

Sowell begins by explaining economics to be a study of making choices, and different economic systems as different ways societies choose to allocate resources. A capitalist society is one where the people choose what should be produced by expressing their preference through choosing what to buy, whereas a communist society is one where a central government dictates what is made by deciding what its citizens should have.

He then proceeds by putting forward economic thinking as the solution to getting to the bottom of many issues in public discourse. Far too many arguments regarding how a society should allocate its resources rely solely on emotions and morality, instead of being buttressed by facts and logic. This can lead to counterproductive and drastic consequences – problems which could be solved if only more people could think critically about society. This sentiment is expressed through many examples, such as the one paraphrased below.

Suppose an area is devastated by a hurricane, and the people in the vicinity need food urgently. Due to increased demand and shortages, prices for food have increased. There are calls for the government to impose a cap on prices such that they do not rise, based on the assumption that rising prices would be unfair to people who need food the most. Should the government heed to those calls? To answer this question, we can look at the logical consequences of the decision of the government.

Let’s say the government implements a price ceiling. We can presume that it is more difficult to deliver to the region due to the danger and obstacles caused by the hurricane, the very same causes of there being a shortage in the first place. These problems can be translated into higher costs of delivering the supplies – for instance, food may need to be airdropped instead of delivered by trucks as roads have been destroyed, and airdropping the same amount of food costs more fuel. Since the price of food remains the same while costs increase, profits for firms will decrease or even become losses, resulting in companies becoming reluctant to deliver the food, meaning less supplies will reach the people in need.

Now say the government allows prices to rise. Firms will see a chance at higher profit, and they will rush to deliver supplies through dangerous routes and other obstacles. As a result, more people will get what they need.

To think economically is the ability to distinguish ideals from incentives. It is ideal for people who need something the most to not have to pay dearly for it, but the incentives caused by the ideals have unintended consequences. Capping prices and then expecting the same amount of food to be delivered is equivalent to trusting hundreds of companies to keep doing something that causes them to lose money.

It would be ideal if businesses weren’t motivated by profit but by kindness, but in practice profit provides a higher incentive for things to get done, as shown through history by the effectiveness of companies compared to humanitarian aid.

Many more topics spanning from the wage gap to the importance of the banking system are touched by Sowell, using engaging examples illustrated through simple language and sound logic, backed by facts. Reading this book gives you the satisfaction of feeling like you have deciphered some secret code, and also a sense of wonder like when Neo took the red pill.

A downside is that though the examples are easy to understand, they present too simple a view, sometimes bordering on bias. The economics Sowell teaches is clearly of the classical variety, as demonstrated by his love of free markets, disdain for government, and curious decision to ignore advances in behavioral economics and their findings on the irrationality of human behavior, amongst other ideas. Another problem is that the book is quite repetitive. The same concepts are used over and over, and the once interesting examples can get boring and predictable as you progress.

But as you come to realise, economics is about tradeoffs: Sowell elected to make things easy to understand over inundating the reader with complicated nuance. The word basic is in the title for a reason.

In conclusion, Basic Economics is an excellent entry point into the field of study that is economics. This book expresses passion for not only the subject itself but also for disseminating it, the two most important things that are so often lacking in textbooks. Even to a person who is majoring in economics, it is a refreshing read. Basic Economics has reignited my love of economics, impacted my thinking in daily life, and helped me make better decisions.

And that is what economics is about: making choices.

First I should clarify that I’m a novice to the field of economics (which is why I read this), and so am not really qualified to give an economist’s view of this book, though I do have my own thoughts on the arguments nevertheless. This review should be read accordingly.

Basic Economics is Thomas Sowell’s effort to present the essential facts and principles of economics in layman’s terms for a general audience, without the use of jargon, graphs, or equations. In this sense the book’s approach to economics is rather ‘orthodox’, given that this was the approach Adam Smith and co. used to discuss economic phenomena that could be easily observed at the time.

However, this book is very politicised — and not always objective! It’s clear that Sowell’s agenda is not purely to educate his reader on the basics of economics, but also to persuade them to his way of thinking, which is arguably rather insidious since it’s marketed as a book for total beginners, i.e. new customers entering the marketplace of ideas. To his credit, he does cover the very most basic economic concepts — scarcity, supply and demand, price allocation, return on investment/sales — in a clear and impartial way, but covers more controversial issues — minimum wage, anti-trust laws, government interventions etc. — from a clearly right-wing position, often accompanied by mischaracterisations of the left. The failures of the Soviet Union cannot discredit every possible use of socialised programmes, especially when successful implementations of such policies in e.g. Scandinavian countries are ignored. Beyond the fact that these misrepresentations mean the book cannot be taken as a sincere attempt to resolve these differences of view, tackling these debates from such a one-sided perspective is (in my view) inappropriate for an introduction to the subject, and is the main fault of this otherwise-useful book. He explains the right-wing position well enough, but without including both sides of the argument fairly it can’t really be considered a freestanding, “everything you need to know about economics” sort of book.

Some parts I have mixed feelings about because of the more controversial points not really being appropriate for a beginner. For instance, I thought the discussion of rent controls were particularly interesting as something that seems like a good idea on the surface but actually causes a lot of problems (this is central to Sowell’s message, which basically amounts to “facts over feelings”). Sowell makes the case that rent controls lead to shortages in housing, and therefore to higher rents elsewhere. Without rent controls, rents still rise when there is a shortage of housing, but this creates an incentive to build more housing, which then reduces the shortage and allows rents to drop again — basic supply and demand. I wonder if it is really this simple? However, I reject his conclusion that a planned economy inevitably fails because those doing the planning can’t possibly anticipate the issues facing every group within the economy: if the principles of economics are as clear-cut as Sowell likes to portray, then the lack of tailoring to individualised experience shouldn’t be such an issue. His argument elsewhere in the book that the Soviet Union failed fundamentally because of the lack of incentive to produce seems a better (and more conventionally cited) explanation.

Another caveat I would include is that my edition was slightly out of date in places (Germany has a minimum wage now, since 2015), but seemed to be updated in others (I was caught off-guard by a reference to the 2008 crash). The defence of globalisation is interesting in this context as well, given that these days this is hardly the consensus on the right, and many otherwise-‘free market’ economists seem to avoid the subject. I think this reinforces my view that the discussions of the basic principles are fine, but that some of the more controversial material should be taken with a pinch of salt.

As I’ve said, I’m no expert, but I remain convinced that the principles of a totally free market without a guiding authority are not enough: I still believe a regulated market, correcting against the sources of market failure, produces better results. Government interventions, such as those seen in the American stimulus bill after the 2008 financial crash, are necessary in such situations. Sowell’s intellectual arguments within the field of economics may be coloured by his own biases and ideological stances more generally, but the cause and effect could also be the reverse (i.e. that his right-wing economic views led him to all-round right-wing politics), so I don’t feel the book can be judged purely on this, nor is it directly relevant to the material. I still think the book is a decent portrayal of a right-wing economic perspective, so I don’t wish to mark it down too harshly on this basis. In the conclusion, Sowell stresses that we should always put the facts of what actually works over what we wish to be the case or what sounds nice from the mouths of politicians — this is clearly his principle message. However, I can’t see a partisan effort such as this as the result of an earnest pursuit of truth.

This is a surprisingly easy book to read and makes certain free market economic principles very clear. Unfortunately, as Sowell writes, although “the fundamental principles of economics are hard to understand, they are easy to forget, especially amid the heady rhetoric of politics and the media.” One idea that the book drills I will not soon forget: we need to judge economic policies not by the goals they proclaim but by the incentives they create.

I’m shelving this for now but, because I am forgetful, will keep it for future reference. Also, it will be required reading for my up and coming high school children.