I finally finished Basic Economics by Thomas Sowell.
The first half - relatively simple economic principles - is really good, the second half not so much. As the book delves into more esoteric ideas it starts to ramble, and the editors seem to have taken the day off. There were numerous occasions where a phrase would seem extremely familiar and, sure enough, it was duplicated almost verbatim two paragraphs earlier.
One section stuck out as being poorly argued: Illegal immigration and the mailing home of accumulated wealth, it was stated, is clearly an economic win because people are doing it (there are willing buyers and sellers). But it isn't so obvious to me that this isn't an example of an External Cost, discussed elsewhere in the book. I imagine Sowell is correct, but he's not particularly convincing.
It would have been more effective shorter, but all in all I learned a lot from this book and am hopefully less likely to make stupid mistakes when talking economics.
Monday, December 22, 2008
Book Review: Basic Economics
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2 comments:
"Illegal immigration and the mailing home of accumulated wealth, it was stated, is clearly an economic win because people are doing it (there are willing buyers and sellers)"
I haven't read the book, so which part of mailing home money and willing buyers-sellers is this referring to?
Having illegals undercut the labour market is clearly a win for employers who want to reduce labour costs (at least, it's a win for them in the short term) ... and it's a win for labourers who get more than they otherwise would, and can help their families.
It isn't a win for the people they're displacing (who then have to work in a reduced wage job market or simply go out of work). It also isn't a win for the rest of society if extra jobs aren't created to employ those displaced, or if there are socialized costs incurred that aren't being covered by an increased tax flow (i.e, illegal immigrants often duck taxes, use emergency health care services, public schools, and so on).
Generally, I think that reducing wages is usually a bad thing (for society). You don't want to decrease wages, but rather increase wages while simultaneously increasing productivity.
The big problem with unions is that they are able to get wage increases (and so on) without causing productivity increases. This can cause the collapse of companies.
In a free(r) market, on the other hand, individuals can negotiate higher wages from a willing employer *because* they are more productive.
Well, every economic transaction involves choosing not to make it with another party, so I think it's fair to ignore marginalized groups and individuals when discussing benefits.
However, going back to the book for incriminating quotes regarding illegal immigration, it appears I subconsciously merged two adjacent sections and falsely attributed this position to Sowell.
He does argue that the costs of "remittances" are always made up for by the work performed by immigrants.
However, Sowell hedges his bets on immigration, noting that some immigrant populations are far more successful than others. I interpret that to mean he does believe in having a coherent immigration policy.
Reading comprehension fail.
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