Basic Economics: A Citizen's Guide to the Economy

By Thomas Sowell, 2007. New York, NY: Basic Books, Pp. 460, $39.95, hardcover. (The review of this book is based on the CDs, Blackstone Audiobooks, $29.95, pleasantly and intelligently read by Brian Emerson.)

Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, and the recipient of many awards, including the Bradley Prize in 2003.

After stating that economics is the study of the utilization of scarce resources, Sowell immediately turns to a discussion of how prices in a free market economy provide signals to both suppliers and consumers of scarce goods and services. Throughout the book, Sowell uses examples that are relatively well known to illustrate his points, so that the book is a useful educational tool or a refresher for the practicing economist.

Early in the book, Sowell presents, as one of many examples, how rent controls in a number of countries during the post-World War II period resulted in reducing the supply and investment in new residential construction and in discouraging property owners from...