Thomas Sowell’s Basic Economics – Part 1(Intro)
Economics is the study of the use of scarce resources which have alternative uses….When a politician promises that his policies will increase the supply of some desirable goods or services, the question to be asked is: At the cost of less of what other goods and services? ~Thomas Sowell, Basic Economics
For a long time I viewed economics as an impenetrable subject. (I also thought it was boring, though I don’t know how I could know that AND find it impenetrable.) One can’t get away from the topic of economics, and the fact is no matter what a person’s level of understanding is, they probably have an opinion on it. A strong opinion. We’re fed strong opinions (and promises) from politicians and entertainment and news and just about any other source of media we consume. We’re promised that a vote for X will change Y about our economy. At some point I figured it would be a good idea to get a grasp on the basics of economics.
Enter Thomas Sowell’s aptly titled book, Basic Economics. Though not light reading, it’s very accessible and written for the lay person to understand. It’s also long measuring in at 654 pages, but very organized and thorough beginning with an answer to the most simple question :What is economics?
Although the word “economics” suggests money to some people, for a society as a whole money is just an artificial device to get real things done. Otherwise, the government could make us all rich by simply printing more money. It is not money but the volume of goods and services which determines whether a county is poverty stricken of prosperous.
At a time in our county’s history where the solution to economic problems has been trying to “stimulate” the economy through “quantitative easing”–the latest version of which being simply printing more money– learning, or relearning, the basics isn’t a bad idea. Sowell points out that economics is about the management and allocation of resources from one area to another, not simply about money. In the end a study of economics for the average person should be about helping make better informed decisions when the promises start flying.
I’ll be writing a series in coming months, mostly for my own benefit, as a way to help internalize what I’m working through and maybe help someone else see that the basics aren’t so daunting at all.