I recently started a Master's program in public policy and have become interested in economics. In class, I felt like I was learning the details without understanding the big picture, and I wanted to get more background information about the main schools of economic thought. When I read the reviews for this book, it seemed like conservatives loved it and liberals hated it. I tried finding a book that had more balanced appeal and couldn't find one, so I decided to listen to this one to get a better understanding of the economic orthodoxy and then to listen to Ha-Joon Chang's "23 Things They Don't Tell You About Capitalism" to get the opposing view.
As for this book, first of all, the narrator is insufferable. He comes off as a pompous know-it-all. He never stopped irritating me, and it is a long book. However, what he was narrating was interesting, so I gritted my teeth and kept going.
Thomas Sowell has managed to write a very clear and easy to understand book about economics. He is very convincing on some topics. He thoroughly convinced me, for example, that rent control is a bad idea. Also, I work for a nonprofit, and his analysis of the incentives in the nonprofit sector made me chuckle: they sounded very familiar.
At the same time, his analysis occasionally struck me as oversimplified and biased. The following are a few examples:
* He makes the claim that economists have concluded that FDR's policies needlessly prolonged the Great Depression but then doesn't back it up at all. I was actually quite curious to hear the reasoning behind this conclusion, but it was never given.
* He notes that financial markets raised the price of Brazilian debt after the leftwing Luis Inacio Lula da Silva was elected president, implying that a leftist presidency was bound to be an economic disaster (the book was published in 2004). In fact, Lula presided over huge growth, and Brazil has since become a major player in the world economy.
* He argues that private companies run utilities better than the public sector and gives the example of Argentina as a place where private provision of water was a great success. He does not mention Bolivia, where a private consortium took over water provision, hugely jacked up prices, and caused a widespread public revolt known as "the water war."
* He blames the California electricity crisis on the policies of state government without mentioning Enron's manipulation of the energy market.
* He calls into question whether "dumping" can be proved to exist. He cites some examples where it is hard to prove (if I remember correctly, all were in the context of developing nations dumping products on first world markets), but he does not mention the sale of subsidized American agricultural products in Latin American markets, which is widely viewed as dumping. He rails against agricultural subsidies in other parts of the book, so it seems hard to deny that these products are sold below cost.
Overall, I thought it was a very interesting and well-written book that provides a good primer of mainstream economic thought. It was written before the 2008 crisis, so I'm curious whether any of his thinking has changed since then. At the same time, I'm glad I'm also reading Ha-Joon Chang's book because this one seems oversimplified: examples that don't support his overall thesis are glossed over or ignored.
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