Basic Economics
"Which is something that modern capitalism is trying to make impossible". Absurd. Modern capitalism? As compared to...classical capitalism, or ancient capitalism? Capitalism doesn't "try" to do anything, capitalism is a system by which goods and services are exchanged at market-determined values. Those values can be/are altered by things like taxes and government subsidies, of course, but saying capitalism "tries" to do [X] is like saying gravity "tries" to make objects fall down. "Basic Economics" and "Economic Facts and Fallacies" by Thomas Sowell are two books that do a pretty good job…
Thomas Sowell - Basic Economics: Chapter 1: What is Economics? “The fundamental principles of economics are not hard to understand, but they are easy to forget, especially amid the heady rhetoric of politics and the media.” In Chapter 1 of Basic Economics, Thomas Sowell introduces the concept of economics, scarcity, and productivity: Economy – a system for the production and distribution of the goods and services we use in everyday life Economics – the study of the use of scarce resources which have alternative uses Scarcity – the wants of everyone add up to more than what exists;…
Thomas Sowell's Basic Economics[1] is a superb book on the subject. It's lengthy but very readable, especially for its real-world examples. Particularly excellent are the explanations for the unintended consequences from price controls. The first edition came out many years ago. Since then, the world has provided a few case studies on the matter. For example we've been been watching the slow-motion train wreck that is Venezuela's economy, as first Chavez and then Maduro gripped prices tighter and tighter. The horrible consequences Sowell describes have shown up inexorably, predictably, just…
> The questions I raised above are the theoretical conditions under which laws of supply and demand operate perfectly. Thomas Sowell is a political economist who explains economics anecdotally and in rather rudimentary fashion. > I am talking about the rigorous microeconomic theory which involves using calculus is required to actually pass an economics course or analyze a commodity market. If you are not familiar with concepts like elasticity, substitution, or the difference between consumer and producer surplus then I suggest you look deeper into microeconomics. The claim that economics…
I'm reading Thomas Sowell's Basic Economics and the idea of inherent value is addressed in the 2nd chapter: “The most fundamental reason why there is no such thing as an objective or “real” value is that there would be no rational basis for economic transactions if there were. When you pay a dollar for a newspaper, obviously the only reason you do so is that the newspaper is more valuable to you than the dollar is. At the same time, the only reason people are willing to sell the newspaper is that a dollar is more valuable to them than the newspaper is. If there were any such thing as a…
I found this analysis wildly off-base. No classical economist would suggest that increasing the money supply raises all prices uniformly, but the author seems to think that by showing that different goods' price changes are not uniform, that some how proves inflation is not a monetary phenomenon. What? From Thomas Sowell's Basic Economics - "Inflation is a _general_ rise in prices. The national price level rises for the same reason that prices of particular goods and services rise - namely, that there is more demanded than supplied at a given price. When people have more money, they tend…
It sounds to me like you're interested in "financial economics" or "money & banking." Having an interest in these topics myself, I find that they are less about macroeconomics as a whole, which, in the mainstream formulation, is about national income accounting, aggregate demand, general equilibrium, production functions, the business cycle, etc., and are more about the microeconomics of particular markets e.g. the market for money, the market for bonds. I'd have a solid grasp of microeconomics, and then learn national income accounting (`C + I + G + X - M = Y` i.e. the sum of consumption,…
> Is rent-control the best way to achieve that goal -- I don't know -- [...] -- I haven't heard anyone propose something better -- just complain about it based on hearsay. What if rent control is actually causing shortages were there's no physical scarcity? We can mostly agree on intent, but sometimes, collectively, we enact plans that cause the opposite of what we want. It happens that I'm just reading Thomas Sowell's Basic Economics. In the chapter on price controls, he argues that rent control (and price controls, in general) cause shortages where there is no scarcity of the…
You yourself just answered why regulation can't ever work correctly: "The real world is simply more complex than that." As a programmer you should know that extremely complex systems like the world can not ever be managed by a small group of super clever beings. This has been the fallacy of each and every of "I'm smart you're not, I'll run things" philosophies originally invented by Plato and perfected by Marx. The world is a complex system managed by 6 billion autonomous beings. Together these 6 billion autonomous beings for an extremely smart mega intelligence. While you, I and our…
I'm going to be a nonconformist myself and oppose the near-univeral approval of Sowell in this discussion. His book Basic Economics was the first book on econ that I read, and I was very impressed by it. It reaffirmed the rather right-wing political views that I'd inherited from my parents. However, after taking a few introductory econ classes at university and doing further reading on my own, Sowell starts to appear very ideologically driven. Sowell is a free-market fundamentalist, in that he opposes most government intervention in markets, and universally trusts laissez-faire capitalism to…