Common Sense Economics: What Everyone Should Know About Wealth and Prosperity

by James D. Gwartney, Dwight R. Lee, Tawni Hunt Ferrarini

The fully revised and updated fourth edition of the classic Common Sense Economics.As the global economy recovers from the COVID-19 pandemic and debates over the future of work challenge our long-held preconceptions about what careers and the market can be, learning the basics of economics has never been more essential. Principles such as gains from trade, the role of profit and loss, and the secondary effects of government spending, taxes, and borrowing risk continue to be critically important to the way America's economy functions, and critically important to understand for those hoping to further their professional lives - even their personal lives. Common Sense Economics discusses these key points and theories and more, using them to show how any reader can make wiser personal choices and form more informed positions on policy.Now in its fourth edition, this classic from James D. Gwartney, Jane S. Stroup, Dwight R. Lee, and Tawni H. Ferrarini has been fully updated to include commentary on the effects of the pandemic on the global economy and the workplace; it offers insight into political processes and the many ways in which economics informs policy, illuminating our world and what might be done to make it better.

Genres: Economics, Nonfiction, Business, Finance, School, Politics, Education

272 pages, Hardcover

First published February 1, 2005

About the author

James D. Gwartney holds the Gus A. Stavros Eminent Scholar Chair at Florida State University, where he directs the Stavros Center for the Advancement of Free Enterprise and Economic Education. He is the coauthor of Economics: Private and Public Choice, (South-Western Press, 2008), a widely used principles of economics text that is now in its 12th edition. He is also the co-author of Common Sense Economics: What Everyone Should Know About Wealth and Prosperity (St. Martin's Press, 2005), a primer on economics and personal finance designed for the interested lay person. His publications have appeared in both professional journals and popular media such as the Wall Street Journal, and the New York Times. His Ph.D. in economics is from the University of Washington.

His current research focuses on the measurement and determination of factors that influence cross-country differences in income levels and growth rates. In this regard, he is the senior researcher responsible for the preparation of the annual report, Economic Freedom of the World, which provides information on the institutions and policies of 140 countries. This data set, published by a worldwide network of institutes in 70 countries, is widely used by scholars investigating topics ranging from economic growth to peaceful relations among nations. During 1999-2000, he served as Chief Economist of the Joint Economic Committee of the U. S. Congress. He was invited by the incoming Putin Administration in March 2000 to make presentations and have discussions with leading Russian economists concerning the future of the Russian economy. In 2004 he was the recipient of the Adam Smith Award of the Association of Private Enterprise Education for his contribution to the advancement of free market ideals. He is the current President of the Southern Economic Association.

Reviews

[Lydia Wallace · Rating 5 out of 5]

Great value.
⁦It was a great value to us and my son for his class in high school and my daughter that is in college. Would buy again.⁩ Full of helpful and useful information.

[منوچهر محور · Rating 1 out of 5]

برخلاف ادعای مقدمه، این اثری به زبان ساده درباره اقتصاد نیست، بلکه مفاهیم اقتصادی را بسیار سطحی ارائه داده و در واقع ماست‌مالی کرده است. کتاب برای خوانندگان امریکایی نگاشته شده و در واقع طرفدار یکی از احزاب سیاسی امریکاست و در توجیه سیاستهای آن حزب سخن می‌راند. به همین دلیل مثال‌های بی‌ربط به موضوع دارد و باز به همین دلیل تاریخ مصرف آن به زودی به سر خواهد رسید.
ترجمه به طرز حیرت‌آوری از اصل کتاب دور است. گویی مترجمین کتاب را یک دور خواندند، آن را بستند و برداشت خود از مطالب را نوشتند؛ آنجاهایی که نفهمیدند را ترجمه نکردند و چیزهایی که خوششان می‌آمد را اضافه کردند.

[Jes Drew · Rating 5 out of 5]

This is a must-read book for everyone living in a capitalist country. Or real life, period. I think it would also be very nice if politicians read it before running a campaign, and voters read it before choosing said politicians. It's just a refreshing, no-nonsense and practical view of life and money.

See full review on my blog: https://agencyofbooksandspies.blogspo...

[Jeffrey · Rating 4 out of 5]

I've read several books on economics (outside of college Econ. 101 and 102), or, more specifically, the Fed., the current dominant money system, co-ops and alternatives to current money system, and so forth, but this is one everyone should read. Why? Here's the author to let you in on a secret:

"We are a nation of economic illiterates. As a result, we are easily misled by leaders who tell us of their good intentions--their passion to solve our problems. Our democracy puts voters in charge of choosing our policy makers, so the consequences of economic illiteracy can be disastrous."

Oh, yes, boys and girls we are in the midst of a perfect example of that "disastrous" result of economic illiteracy. The author tells us that if we want to avoid disaster and want this country to be economically prosperous, read on. But there's more. There's a micro to the macro. The author also states that by reading we will be able to make better decisions regarding our "consumption, savings, investments, career alternatives, and many other dimensions of personal decision making."

As an aside, this book falls in line perfectly with a pet peeve or mind about education in general. I bring this up because this book is now being read by many in school and college, and they are learning more about economics than from most the 'text books' they are assigned. Why are we teaching science and math (most of high school curriculum) to 100% of the population when only 5% of jobs are in STEM fields (science, technology, engineering, math). The majority of kids can't even master their behavior nor do they have the necessary attitudes to achieve in the work force or the needed success principles amongst other things to not only survive but thrive. So our focus is on material that most don't want or will ever use in their careers? And our 'education' predominantly omits how to build a businesses when this country is founded in entrepreneurship; even its founders were some of the most effect entrepreneurs this country has ever knows (Ben Franklin rich by age 40 via selling his printing franchise to have more time for inventing and statesmanship--fortunately for us). Our kids don't even know how to do research or how to think independently, creatively, intuitively, never mind know the first thing about economics that will help them make informed decisions that will hopefully keep this country out of the crapper. Finally, this book will help them with their individual finances, which is essential when I see the majority of college kids cluelessly racking up debt in loans and credit cards to a future of indentured servitude. Oh, yes, Mr. Gwartney, we certainly do need this book. PeacE!

[Andrew Ringsmuth · Rating 2 out of 5]

The only thing more insufferable than a religious zealot is a religious zealot who thinks he’s a scientist. This book reads like something between a slapdash, nontechnical summary of neoclassical economics and a gushing love letter to laissez faire capitalism. The authors don’t waste much time with nuance, controversy or hesitation; they just tell you how things are. Because they are experts on how the world works, they don’t need to bother providing rigorous empirical evidence to back up their claims, except in a few convenient cases where supporting evidence is available. I suppose they do a decent job of summarising neoliberal ideology but, better than that, they demonstrate the effectiveness with which neoclassical economics warps people’s notions of common sense. The authors are so busy fawning over the magical powers of markets and decrying government that they don’t have time to talk about the gigantic market failures of climate and biodiversity collapse that may well sweep civilisation off the face of the planet if we can’t rally our institutions in time. It is positively harrowing that the priests of this failed religion are allowed to educate students without warning them that the ‘common sense’ they are receiving is, in many way, just made up ideology. I recommend following this book up with Steve Keen’s ‘Debunking economics’, Kate Raworth’s ‘Doughnut economics’ and Herman Daly’s ‘Ecological Economics’, to remind oneself that empirical evidence, and genuinely scientific theories firmly grounded in it, are more effective measures of reality than ‘common sense’.

[Daniel · Rating 1 out of 5]

Had to read this for an economics course, probably the worst book I ever read. It reads more like political talking points filled with meaningless drivel filled with bumper sticker slogans.

[Krishna Kumar · Rating 3 out of 5]

This economics book explains the classic laissez-faire theory. However, it does not do a good job in explaining the deficiencies and problems in this approach.

[Glenn · Rating 4 out of 5]

This is an excellent introduction to basic economic principles. As the authors point out, we live in a nation of economic illiterates, and given the current political and economic environment, clear thinking about economics has never been more important. This book introduces the key ideas and issues and presents a clear explanation of what works and what doesn't in the real world. While not everyone will agree with all the specifics, I know of no book that better introduces the concepts and presents a better, more accessible argument about sound economics.

[Mike Thoennes · Rating 5 out of 5]

This is one of those books that should be on every persons book shelf, dog-eared and underlined. I learned more economic principle in the 160 pages of this book than the 800 pages of a well known author's book that I simply could not finish. I needed straight talk not high theory. This book is practical and effectively covers what you need to know about the core economic principles of free markets; how economic forces function, the economic role of government, and personal principles of prosperity. It still is written by economist's with an intent to inform and educate, but read this and then watch the world stage in a newly informed perspective. In fact, read it twice!

[Cavalier973 · Rating 5 out of 5]

A top-notch primer on economic theory and application. Well-organized and easy to understand, the book covers basic theory, macroeconomic application proposals, and microeconomic (i.e. personal finance) applications.

The only criticism I have is the authors' sanguine view of central banking and the policy of money supply management. This comes from my recently started the study of Austrian Economic Theory.

[Philipp · Rating 2 out of 5]

This book is a great polemic for neoclassical or laissez-faire of economics. However, in their analysis, the authors often leave out shortcomings of their policy suggestions.

I mean, free market, small government, low taxes, all good and fine. But at no point in the book are the limitations of their precious, untouchable free markets even mentioned.

Nevertheless, the book contains some of what is promised, that is, common sense economics. However, it is intervowen into a text containing lots of assumptions and oversimplifications.

In essence, if you decide to read only one book on economics, don't make it this one.

[Colin Bruce Anthes · Rating 1 out of 5]

One star for clarity: clear from their first list of principles they are fanatically right-wing. According to the cover, this frightening piece of fiction is being used to indoctrinate high schoolers. They prop up Sam Walton as a hero, don't mention workers, casually drop in Hayek's (nonexistent) Nobel Prize, and quote Roosevelt from 1932 before he changed his mind, taxed the rich at 93% and did much better. An astonishing work of sophistry top to bottom.

[Reana · Rating 2 out of 5]

tfw you want to read a book explaining some basic economic concepts but instead the book tells you to abolish public schools because markets

some of the arguments are indeed grounded in common sense, and the personal finance section of the book is pretty informative, but the authors make a LOT of assumptions based on a few statistics and fail to engage with the harms of any of the policies they approve of.

[Jeremy Gardiner · Rating 5 out of 5]

Wow, what an incredible book. It's the best I've read on economics to date. The book is broken up into four sections: key elements of economics, sources of economic progress, economics and government, and personal finance. It was hard to find anything I disagreed with. The authors teach a "free-market" economic system. Read it in my Introduction to Economics class at Moody Bible Institute.

[Rosewater Emily · Rating 1 out of 5]

Передо мной оказалась али-ктронная версия, вышедшая в 2020 году, з українським перекладом, и предлагаемая для свободного скачивания: даже если бы у меня сохранилась ссылка, я бы не стала ею делиться, объяснив нежелание выражением одного, возможно, кому-то известного, а кому-то и свойственного лица (https://images.gr-assets.com/authors/...)
По прочтении вспоминаются слова Честертона, риск перевирания цитаты чьей всё ещё невысок: to the new politician his dream is not only a dream, it is reality - (нездоровая) рассудительность позволяет произвести замену наименования одной, обладающей некоторой властью профессии, другой, обладающей властью другого сорта ('politican' to 'economist'). Однако экономистами и политиками дело далеко не ограничивается - есть ещё психологи, социологи, антропологи, физики с астрами и без, научные популяризаторы всех мастей и пород, журналисты, народные артисты, не имеющие понятия о том, к какому народу и когда они были причислены, эрудиты, учёные-теологи, неучёные-теологи, теологи-атеисты, атеисты-попы, терорристы-ретрограды, абстрактные активисты, CEO, блогеры и студенты (список продлевать на своё усмотрение): гуру, не гуру, не суть важно - для 2-месячной дрессировки консультанта мечта становится не только "мечтой", но и реальностью, независимой от мечт и реальностей клиентуры, реальностью, включающей клиентские потуги в область своего влияния, благодаря инвариантности методик ("позитивное мышление", "отказ от токсичности", "эгоистичный ген", art of not giving a fuck, такое прочее). Всеобщее существование в "мечте" как "реальности", конечно, не предполагает реализации первой и повышения качественной ценности второй. Ни того, ни другого никто и никогда не стал бы обещать.
В целом, текст доступен будет и учащемуся среднеобразовательной школы (не успевшей "переквалифицироваться" в гимназию, лицей, колледж), если только у него достало "сумлінності" вивчати Історію України з 5 по 7 клас.
В значительной мере именно на "сумлінну особистість" рассчитано чтение подобной литературы: с одной стороны, это хорошо, так как "комсомольцы" обучатся тому, как можно избегать налогов, тому, как не позволять государству централизоваться (после чего остаётся дождаться благополучного вырождения комсомольцев); с другой - уклонение от налогов будет только способствовать укреплению функционирования персон и структур с представленным выше выражением на морщинистых либо по-президентски отглаженных физиономиях. Экономисты, можно быть уверенным, никогда не научат, как уклоняться от недостатков свободной торговли - потому что у последней, в Картине Мира фон Хайека, нет недостатков. Всё, к чему привязывают словцо "свобода" отчего-то рассматривается, в крайнем случае, как явление, находящееся в шаге от совершенства. Всё, к чему привязывается словцо "торговля" совершенно непредсказуемо оказывается созвучным понятию "свободы".
Дело ли в том, что я никак не задействована в освобождении торговли либо пропаганде неограниченного оборота свобод?
Из возникших примечаний в блокнотике, сваливаемых здесь в одну кучу:
"Чи дійсно банкрутство вивільняє ресурси? Чого усім разом не збанкрутувати тоді?! Я вже! Корреляция между уровнем жизни и сокращением трансакционных трат не слишком отчётлива; что за идиотская привычка приводить примеры из советских учебников? Перед внутренним взором встаёт Саакашвили, обсасывающий мороженое в вафельном рожке. И не спросишь ведь, что за вкус служит причиной такой самозабвенности - телохранители, озлобленные, оставшиеся без мороженого, с пластиковыми стаканчиками, где в восьмой раз перезавариваются пакетики ароматизированной чайной пыли (лимон в одном, малина в другом), доставшиеся в качестве заработной платы от получающего очередное гражданство Михаила. А ведь в это самое время для кого-то, поглощающего остатки позавчерашнего борщизма у запыленного экрана, Михаил является голодающим полит-заключённым! Почему, в конце концов, не галстуки? Почему не голубые крови Люксембурга и памперсы? Почему не ирокезы и "Завтрак туриста"? Ведь так много общего между чувством юмора и экономикой - не огрызок, а огромное аппетитное яблоко Магритта!"
...
М-да, вместо анекдотов, тут посредственные комиксы из брошюр, рекламирующих Сайентологию, Кришну и Сандея Аделаджу с равным успехом.

[Scott Ward · Rating 3 out of 5]

The authors cover a lot of ground in macroeconomics. While they claim this is common sense, there are still a lot of assumptions and conclusions based on a certain worldviews and political biases. For example, they say lower tax rates boost the overall economy. In this example, most argue that high tax rates reduce capital expenditures and expansion in hiring, etc. However, the authors give examples that show businesses make expenditures because high marginal tax rates (such as Britain’s 98 percent in the 1970s) actually boosted expenditures, boosting the economy because the tax savings paid for the expenditures. Likewise, common sense would tell you that a business owner will invest in an opportunity—buy equipment, hire employees—when the opportunity will make money, such as customer demand is increasing. Taxes will take a portion of the profit, but a big chunk will go into the business owner’s pocket or be reinvested for further growth. If a business owner has a money-making opportunity, and says to himself/herself, “Well, I’d do it if Congress would cut taxes” then that business owner is not showing common sense and is claiming to pass on business growth when demand is high.

There are a lot of platitudes in this book and reliance on the free market. They ignored their own discussion of how free markets led businesses to petition governments to restrict trade through licensing, certifications and other barriers for new entrants into the market space. They also ignored history that led to slavery for economic reasons, robber barons in the late 1800s as the Industrial Revolution heated up. Free markets meant low wages, unsafe workplaces, unsafe food, monopolistic pricing, and so on. Adam Smith’s invisible hand of the free market was also fooled by the “growth” of 1930s Germany and fueled Hitler’s militaristic expansion. Depending on abundance of resources, free trade can decimate national economies, or at minimum certain business sectors. We just have to look at how much of our consumer goods in the US are produced in China. Or as one person told me, “It costs me more to raise chickens in Haiti than the cost to import from the other side of the island, from the Dominican Republic.”

Surprisingly, they seem to totally ignore the work of Kahnemann, Tversky and Thaler who pointed out the irrational decision-making processes of consumers, business leaders and economists. Thaler mentions in an interview how even economists won’t drive 10 minutes to save $5 on a $400 item, but will drive that distance to save the same amount on a $20 item. The cost and savings are the same but the decision is different. Why? Anyone who pays attention understands that most of us in the real world don’t see common sense or rationality applied. But neither does this book.

[Carolina Ibanez · Rating 4 out of 5]

Thank you NetGalley for the advanced copy of this book.
This is a good book for students and people who want to know how the world of economics works. It puts terms and theories in down to Earth examples and explains things in a way that is easy to understand and see in real life.
I would say the first part is mostly macroeconomics under the lense of a free market and has a neoliberal point of view.
The last part of the book I feel it has a better use for individuals as it touched the topic of personal finance. For people who are not necessarily in the world of investments it can give some general guidance on how to take care of your money.
I would have liked to see more of the new economic trends like Behavioral Economics or a deeper discussion on Green Economy and sustainable development but overall is a good book to start in the world of economics.

[Luke Nowell · Rating 1 out of 5]

If this is the best we have to offer people about understanding economics, it is no wonder that things go wrong. There are a few good points made in this book, to be fair. But, the real problem is the underlying assumption that people make rational business decisions, and if we could all be like the ideal business man we would have a perfect world. The authors do not believe the government should be involved in anything than defense and the common good, but certainly not doing anything that would prevent business from how they want to operate. People do not make rational decisions in business or other aspects of their lives, and we need economic primers that acknowledge that fact. Do not read or buy. I would give it less than 1 star if I could.

[Colette Campbell · Rating 2 out of 5]

Definitely not a page-turner, but it had some good info on how economics works in different areas, including government involvement (which made me wonder if a lot of our national leaders have ever taken an econ course), and personal finance. It was well organized so I could read just the sections that interested me and skip over the stuff that I found boring or didn't apply to me. Well explained and concise.

[millie___s. · Rating 4 out of 5]

Knjiga je zadovoljila moju znatiželju u smislu čitanja onoga što već znam, upotpunjavanja znanja o ličnim finansijama i generalno želje da se priča i čita o ekonomiji (podupreta simpatisanjem yt kanala The Financial Diet). Iako su ekonomisti ove knjige podržavaoci slobodnog tržišta, moja ocena je slabo promenjena tim ''nepromišljenim stavom''.

[Claire Kantor · Rating 2 out of 5]

Concepts are helpful to know but this feels like it was written by rich people who wholeheartedly believe there’s no such thing as inequity, and if you’re poor you’re just financially stupid and/or not working hard enough. There are better books out there that teach you the same concepts while also recognizing the short falls of capitalism.

[Chris Thompson · Rating 5 out of 5]

This little treasure should be mandatory reading for all Americans who desire a return to prosperity for our great country. If you apply what you'll learn reading this book, you'll make better decisions for the rest of your life.

[Ernesto · Rating 2 out of 5]

I did not like how this book is written or structured. I read it in Italian, so maybe it's the translation. But I think it's due to having multiple authors. I didn't find the content that interesting either.

[Shim · Rating 4 out of 5]

Quick read, great refresher of a wide variety of important concepts in economics. Has a useful section at the end for practical personal finance advice. It's a bit unabashedly gung-ho for capitalism with libertarian streaks, which is all very nice in theory…

[Leilani · Rating 4 out of 5]

Perfect for what I wanted--a basic book about economics and how it applies to me and the world around me. Very easy to read and highly informative.

[Ginger · Rating 5 out of 5]

Good refresher on the basics in this day and age of economics with an agenda.

[AbdulHameed · Rating 5 out of 5]

Everyday economy

This book teaches you about the structure of economy and would a recommendation for anyone. This book also gives you a platform to build yourself on.

[Dwarakanath Reddy · Rating 5 out of 5]

Written in simple language. Book is really nice to understand the functioning of the economy.

[Murray Sondergard · Rating 4 out of 5]

A concise summary of conservative economics.

[Jacquie Mann · Rating 2 out of 5]

This book could be titled "Capitalism according to Wealthy White Men"