In
light of the coming political debate over the economy, I
recall a discussion I had with a programmer on my staff.
Although a brilliant programmer, he was pretty much economically
illiterate and believed in a ‘static’ view of
the economy - the only way one could get wealthy was if
others became poor. Sadly, this thinking is not countered
in high school or in college, unless you happen to take
an economics class. After a brief discussion, popping a
few of his illusions, Ed understood how things work and
that wealth can be created without impoverishing others.
Most people talk about economics and they can’t even
define what it is. Politicians don’t often discuss
brain surgery since it would be readily apparent they didn’t
know what they were talking about. That doesn’t stop
them from weighing in on economics - and often a bad economic
idea is a great political idea thanks to a population largely
ignorant of the science of economics. Whatever gets the
vote is what some politicians seem most interested in. The
definition of economics is that it is the “study of
the use of scarce resources which have alternative uses.”
Now wasn’t that painless? And you didn’t even
fall asleep.
Allow me to recommend a book on economics that won’t
even cause your eyes to glaze over. We, as a country, should
understand economics in order to understand how the market
economy, in which we live, works. While everyone should
understand personal finance in order to take care of himself,
economics is about the financial health of a whole society.
To that end, we, as voters, should take a little time to
learn about the economy in order to choose properly.
Thomas Sowell’s Basic Economics, A Citizen’s
Guide to the Economy, is an excellent book, which takes
the reader through a lively discussion of the basics. Dr.
Sowell writes for the lay person, and does not use any complicated
jargon, graphs or formulas. This book illustrates exactly
how economics works and affects all of us, plainly. To paraphrase
Dr. Sowell, if you jump out of a window you can protest
the law of gravity all you want, but you are still subject
to it and the end result. It would be best to learn about
it before you leap.
Ever wonder why some countries prosper, even though they
have poor resources, or why others are destitute even though
they are rich in natural resources? Or have you ever considered
that price controls actually cause more harm than good?
Why do some companies succeed and others fail? What determines
what a person is paid for his work? What is the role of
government in managing the economy? How do private property
rights enable an efficient and healthy economy? Dr. Sowell
answers these and many other questions and misconceptions.
Along the way he manages to entertain you with a writing
style that is powerful and straightforward. You can just
hear the political egos popping.
If you would like to be able to understand economics and
be able to judge whether a politician actually knows what
he’s talking about, without going back to school,
then you should pick up this book. Economically speaking,
it would be a good use of your time and money, both of which,
I’m sure, have alternate uses. DBJ
Jamie
Smith
DBJ Contributing Editor
