Economic Ignorance Impacts Us All

adam-smith-statue-Edinburgh1024x640_gettyYesterday, I finished one of my many summer reads: Thomas Sowell’s “Basic Economics.” I’ll simply say that this is one of the most important books every non-economist should read.

A few years ago, I began to realize I had very little comprehension of economic principals, and schools of thought.  I’d taken macro economics (without taking micro economics) in college, but none of it really stuck.  I was a sociology major, which does overlap with economics, but most of the focus in college courses was on the theoretical side, and not really critically examining which philosophies actually worked.  And frankly, even on the philosophical side, in hindsight, the sociology department was ill-equipped to handle this complex discipline.  From my one economics class, I understood the idea of supply and demand at a basic level, but I didn’t really understand much beyond that, especially not in any way that would allow me to have a coherent discussion on economics with anyone.  This bothered me, because I like to know truth, and I realized I tended to believe the rhetoric I’d hear in the media or my social circles without any real understanding of why.  I wanted to know what most economists actually believed and why.

And I came to realize that ignorance of economics is one the most prolific and consequential problems for the populace to have in a democracy.  Failure to understand even just basic concepts, and different theories of economics allows us to be manipulated by politicians who will always play to our wants and desires to get re-elected, especially since many of them do not have an understanding of economics either.  Your ignorance, my ignorance, your neighbors’ ignorance harms all of us.  We owe it to ourselves to do better.   The public school system, guided by government requirements and “standards”, has not served us well in this manner.  The more I have read about the history of economics and the various schools of thought and basic concepts, the more sure of that I am of anything.  Our own intuition about economic principals often fails us terribly, and our desires for how we wish the world to be versus how it actually behaves blinds us to their truths.

No, economics is not sexy and to some it sounds boring, but at its core, it is simply the study of how humans behave.  Much like psychology or sociology.  It combines mathematics with the examination of history to explain why things happen.  It is the best academic discipline we currently have to help us understand the best and worst ways for human societies to manage “scarce resources which have alternative uses.”  Without understanding scarcity, we cannot understand the best ways to create societies that thrive and give the broadest opportunities for increased human well-being.

Sowell’s book is long, but he extremely clearly covers a wide swath of complex topics, boiling them down into easy to digest pieces.  You will come away better able to see through tricks by politicians and others who have absorbed the collective, wishful thinking, under-informed ideas of economics in pop-culture.  Sowell’s book isn’t the only book on economics I’ve read over the past four or five years (there have been many actually), but its the clearest and most comprehensive so far.   I’m still on a journey to better comprehension, but I’m far better off for having read Sowell’s (and others’) book.

And if you don’t want to read his excellent book, please, I beg you, please seek the truth about economics and how they impact your life and the lives of all humans.  Be skeptical of popular constructs and dig deeper, keeping your own wishes in check. I strongly believe this pursuit of economic competence is as important to a democratic society as is learning to read, write, and do basic math.


Basic Economics by Thomas Sowell

I also recommend these great, very easy to understand books on economics:





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