Thursday, February 03, 2011

Economics 101

I am attempting to read Thomas Sowell's excellent new updated book Basic Economics 4th Ed: A Common Sense Guide to the Economy. I say attempting because the book is 689 pages long and filled with detailed information including a new chapter on the history of economics. I took economics in college but it's been awhile and Sowell's book really brings the layperson up to date on what economics is and how principals of economics apply around the world.

Sowell uses British economist Lionel Robbins classic definition of economics:
Economics is the study of the use of scarce resources which have alternative uses.

It sounds simple enough but the next 600 or so pages of Sowell's book are required just to understand this simple enough definition. Sowell notes:
...economics studies the consequences of decisions that are made about the use of land, labor, capital and other resources that go into producing the volume of output which determines a country's standard of living. Those decisions and their consequences can be more important than the resources themselves, for there are poor countries with rich natural resources and countries like Japan and Switzerland with relatively few natural resources but high standards of living.

Why is this? How do politics play a part? These are the questions I have and as I travel through the book one page at a time, I am learning the answers. Perhaps you have other economic questions such as the role of prices and why they are important, or you want to know more about the economics of international trade, or you just want to know about the different theories of economic thought in a fun and easy to read format. It's all in this book and more than I care (or you would want to read) to write about in a blog post.

Cross-posted at the PJ Tatler.

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18 Comments:

Blogger TMink said...

Sowell is quite a thinker. He also has some very nice large format photography on his blog. He and Walter E. Williams are both towering intellects. And neither is ever mention during black history month. I guess the left the progressive plantation and made something of themselves, thus putting the lie to the victim chorus.

Trey

9:34 AM, February 03, 2011  
Blogger Helen said...

Trey,

Glenn got a calender some publisher sent him of Sowell's photography. It was very impressive.

10:05 AM, February 03, 2011  
Blogger GawainsGhost said...

I too took an economics course once, and walked out thinking most economists are idiots.

I haven't read Sowell's book, but I have read numerous articles by him. He is a towering intellect, and I respect him.

One book I would recommend is Econned, by Yves Smith. She's the propietor of Naked Capitalism, one of the most influential economic blogs. It's a fascinating read, as she delves into the origins of the current crisis, which centers around the failure of economists to grasp the effect of their flawed theories.

It would be interesting to compare and contrast these two books.

10:22 AM, February 03, 2011  
Blogger TMink said...

Towering intellect is a grand and completely appropriate phrase. I would love to use it regularly, but there are not that many towering intellects around!

Trey

12:59 PM, February 03, 2011  
Blogger Anne B. said...

P.J. O'Rourke covered a good bit of this territory in his book "Eat the Rich." The chapter on Tanzania is called, "How to Make Nothing from Everything," and the one on Hong Kong is "How to Make Everything from Nothing."

The book is from the late Nineties so a lot of the individual examples are probably outdated, but the lessons are not.

2:43 PM, February 03, 2011  
Blogger Major-General said...

Ahh, economics, the first of the praxeological sciences.

5:03 PM, February 03, 2011  
Blogger pst314 said...

Thomas Sowell is one of those "buy everything he writes" scholars.

I read the first edition of Basic Economics, and shake my head at how vastly much better it was than my high school and college texts (and instructors). It's almost as if they wanted it to seem more complex and mysterious than it was.

5:03 PM, February 03, 2011  
Blogger Tether said...

This comment has been removed by the author.

5:49 PM, February 03, 2011  
Blogger Tether said...

This comment has been removed by the author.

5:50 PM, February 03, 2011  
Blogger GawainsGhost said...

If you were married to a woman like Helen, you would fall to your knees and give praise to God every day.

She's been through a lot, pursued a challenging career, maintained a marriage, raised a family, and now she's broadening her horizons.

What else you could expect from a woman these days is beyond my ability to comprehend.

7:43 PM, February 03, 2011  
Blogger pst314 said...

Tether is shocked and worried that Dr. Helen has time to read books? Just like her husband?

Dr. Helen: Am I correct in perceiving that psych bloggers attract a disproportionate number of, well, to use the technical term, assh*les?

10:00 PM, February 03, 2011  
Blogger dr.alistair said...

i think the type of woman tether sees in his mind aren`t housewives but prostitutes.

and, of course, he will say that is a distinction without a difference...but there are those of us who know and love the difference.

9:31 AM, February 04, 2011  
Blogger Helen said...

pst314,

"Dr. Helen: Am I correct in perceiving that psych bloggers attract a disproportionate number of, well, to use the technical term, assh*les?"

I am going to assume our friend Tether above had a post (which he removed before I read it) insulting me. I don't know if psych bloggers get a larger number of these. Maybe so, because unstable people feel they can unleash their anger more readily on us?

GawainsGhost,

Thanks for the kind words.

12:00 PM, February 04, 2011  
Blogger br549 said...

Messrs. Sowell and Williams are both incredibly bright individuals. And yes, they are not playing the game as they are supposed to, and as such, are not ummmmm.....highlited in February.

And I freely and openly admit that I am extremely jealous of Instapundit. May the bird of paradise fly up his nose.

1:04 PM, February 04, 2011  
Blogger pst314 said...

"May the bird of paradise fly up his nose."

Was that an old Johnny Carson joke? You're dating yourself by using it, and I'm dating myself by recognizing it. :-)

8:26 PM, February 04, 2011  
Blogger br549 said...

Sigh..... Yes. But on that note, Carson was the best. I grew up watching him from 6th grade intil he retired. I have experienced more hearty guffaws and outright side splitting laughter watching The Tonight Show with him at the helm than anything else in memory.

8:53 PM, February 04, 2011  
Blogger JG said...

"If you were married to a woman like Helen, you would fall to your knees and give praise to God every day.

[...]

What else you could expect from a woman these days is beyond my ability to comprehend."

-------

Without getting into the main point - or taking a position on Helen - I just wanted to point out that it is quite silly that the answer to a charge that a woman is leeching is basically that she's a lot better than other women so you better be happy.

That's just beyond comprehension to me. But I guess a lot of men think that way, obviously, and that's probably why men as a group are just getting steamrolled by women today. Zero self-respect.

6:24 PM, February 06, 2011  
Blogger fredsbreakfast said...

Hey Dr. Helen, thanks for posting this. How though to get more people interested in economics explained by guys like Sowell and Williams and Friedman???

3:30 AM, February 09, 2011  

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