Sunday, May 8, 2011

Thomas Sowell's "Basic Economics"

Last weekend, I began reading the recently released 4th edition of Thomas Sowell's tome, "Basic Economics.". It has been a number of years since I took economics in college. It turns out that I haven't forgotten any of the basic principles. But that said, the degree to which Sowell's book has enhanced my understanding of those principles surprised me greatly. Indeed, it did so to the point that I am writing this post to recommend his book to everyone who doesn't hold a PhD in economics (or who does hold one and is named Paul Krugman). Giving example after example of the basic principles of free market economics - and market distortions - in practice, Sowell eviscerates essentially every left wing economic meme of the past half century. It is an invaluable resource.

For but one of thousands of examples from "Basic Economics," Sowell addresses, on page 227, income differential between races in the U.S., pointing out that:

While gross statistics show large income differences among American racial and ethnic groups, finer breakdowns usually show much smaller differences. For example, black, white, and Hispanic males of the same age (29) and IQ (100) have all had average annual incomes within a thousand dollars of one another. In New Zealand, while there are substantial income differences between the Maori population and the white population, these differences likewise shrink drastically when comparing Maoris with other New Zealanders of the same age and with the same skills and literacy levels.

One other notable aspect of this book is how Sowell traces the ripples through the economy of market distortions. At any rate, this book should be required reading for every American. I can't recommend it strongly enough.

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