The Immortal Sowell
CIESLA, EILEEN
Eileen Ciesla The Immortal Sowell THOMAS SOWELL'S BASIC ECONOMICS: A CITIZEN'S GUIDE TO THE ECONOMY It is no small feat to write a book on the laws of economics without inflicting a single demand...
...Yet it is the impact of economic policies on "flesh and blood human beings" that motivates his work...
...Well-meaning agricultural subsidies (a price floor) designed to protect farmers created an unsellable surplus...
...Yet Sowell's general stance, that economics has nothing to do with morals and is exclusively concerned with optimally allocating scarce resources, belies what we sense he actually believes: That capitalism is a more moral system because it is predicated on human freedom...
...tion...
...This expression is misleading only if we imagine that the value of the gold is somehow transferred to the paper money, when in fact the gold simply limits the amount of paper money that can be issued...
...Why do neighborhoods with rent control (a price ceiling) rapidly decay into slums...
...Economics is the study of cause and effect relationships...
...Eileen Ciesla The Immortal Sowell THOMAS SOWELL'S BASIC ECONOMICS: A CITIZEN'S GUIDE TO THE ECONOMY It is no small feat to write a book on the laws of economics without inflicting a single demand curve on the innocent reader...
...It has nothing to say about "affordable housing/' "a living wage" or "social justice...
...The law of supply and demand isn't personal...
...it deals with incentives and their consequences...
...The latter portion is a survey of macroeconomics, and here the book may seem slightly disjointed, if only because macro is a hodge podge of distinct subjects: money and banking, measuring national output, international trade, and so on...
...Economics is the study of cause and effect relationships...
...V...
...And begins a discussion of GDP by first warning the reader of the hazards of "the fallacy of composition": the mistaken assumption that what applies to a part applies to the whole...
...But this is a minor detail in a book that is written to give the reader a general grounding in the basics, not a tour of its various schools of thought...
...Though sometimes combative in tone, Basic Economics is not polemic but well-delivered political economy, laying out the laws that all economists agree on, though they may part on the interpretations...
...Basic Economics might do a great service in the hands of the lay voter for whom it is intended...
...Why did farmers pour milk into sewers and drown chickens during the Great Depression...
...But his consistent approach keeps the book flowing...
...Sowell writes as a lead defense attorney for capitalism's logic...
...Sowell points to a flurry of news stories in the 1990s on layoffs at a time when the unemployment rate was at its lowest: "What was true of the various sectors of the economy that made news in the media was not true of the economy as a whole...
...Landlords unable to pay maintenance costs often abandon their buildings, and renters have no need to economize on cheap space, leading to a shortage of housing...
...He teaches comparative advantage by first correcting the New York Times for characterizing NAFTA as a zero-sum game...
...His enemies will be no more inclined than usual to forgive him for deflating their most dearly held myths...
...Indeed, following Adam Smith, Sowell is insistent that the laws of economics have nothing to say about values, though the consequences of capitalism may have multiple benefits to society...
...Lest one impute greed to the landlord or vengeance to the farmer, Sowell is quick to disabuse the reader of "the tendency to personalize causaThe law of supply and demand isn't personal...
...It has nothing to say about "affordable housing," "a living wage," or "social justice...
...Sowell fans will find it a good read and a good resource...
...Thomas Sowell does just that in his engaging primer on the fundamentals of economic thought...
...The bulk of the book is dedicated to microeconomic concepts: the role of prices, wages, and incentives in the marketplace...
...In the chapter on Money and the Banking System, Sowell makes clear his monetarist preferences: Money is said to be "backed up" by gold...
...Sowell clearly cares deeply about freedom...
...A supply-sider would point out that defining the dollar in terms of 92 THE AMERICAN SPECTATOR ¦ April 2001 gold makes its value predictable and ensures its convertibility at a fixed price...
...And he's clearly had all he's going to take of sloppy journalistic pronouncements on "the rich getting richer, but the poor staying the same," apples and oranges comparisons of household and individual income, statistical leaps and lies, and lofty talk of capitalist greed...
...As he writes in his final chapter: Lofty talk about "non-economic values" too often amounts to very selfish attempts to impose one's own values without having to weigh them against other people's values__Greed for power is no less dangerous than greed for money, and has shed far more blood in the process...
...Most passionate when making a strong case over the human cost of failed economic policies in communist Russia, rent-controlled Manhattan, or famine-stricken Africa, he nevertheless stops short of making a moral case for capitalism...
...Political authorities have often had "non-economic values" that were devastating to the general population...
...In other words when prices fall, quantity demanded rises...
...That is, when prices rise, quantity supplied rises...
...Sowell is a terminator of popular fallacies, out to expose the "glittering words and fuzzy phrases that are mass produced by the media, politicians and others...
Vol. 34 • April 2001 • No. 3
