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Type of bind: Hardcover
Dewey Decimal Number: 330
EAN num: 9780465081431
ISBN number: 0465081436
Label: Basic Books
Manufacturer: Basic Books
Quantity: 1
Page Count: 256
Printing Date: November 12, 2003
Publishing house: Basic Books
Release Date: November 11, 2003
Sale Popularity Level: 59168
Studio: Basic Books
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Product Description:
The ideal companion volume to the acclaimed Basic Economics--a guide to how our economic decisions turn out in practical terms.
The application of economics to major contemporary real world problems--housing, medical care, discrimination, the economic development of nations--is the theme of this new book that tackles these and other issues head on in plain language, as distinguished from the usual jargon of economists. It examines economic policies not simply in terms of their immediate effects but also in terms of their later repercussions, which are often very different and longer lasting. The interplay of politics with economics is another theme of Applied Economics, whose examples are drawn from experiences around the world, showing how similar incentives and constraints tend to produce similar outcomes among very disparate peoples and cultures.
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Rated by buyers 
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I found very little useful information in this book. The author takes the most basic elements of economics and attempts to apply them to very complex issues. If you have any econ or business knowledge, save your money and look elsewhere.
Rated by buyers 
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Thomas Sowell's central point is that government intervention to correct economic or social problems can lead to unintended subsequent consequences. The book's main weakness is that it only provides examples where implemented governmental policies have caused problems: as if all government interventions are bad. A second weakness is that it provides no guidance in making better policy. There is little to learn from this book.
Rated by buyers 
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Dr. Sowell picks up here where he left off with "Basic Economics." For the average person who would like to learn more about economics on a practical and not just theoretical level, start with "Basic Economics" and then move on to "Applied Economics." The author does a wonderful job in both books of explaining concepts and giving practical examples to illustrate the concepts. There is a good chance you will walk away from this book with a brand new perspective on certain accepted policies and ideas. Dr. Sowell is especially adept at making the point that politicians and much of the public live in the world of short term thinking, while economics forces you to think beyond stage one.
Rated by buyers 
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1. The purpose of economic analysis is not the goals being sought but the incentives and constraints that are created in pursuit of those goals. What we need to know is the characteristics of the processes set in motion and the incentives and constraints inherent in such characteristics rather than judging these processes by their goals. Once we start thinking in terms of the chain of events set in motion by particular policies and follow these events beyond stage one - the world begins to look very different.
2. Political decisions tend to be categorical, while economic decisions tend to be incremental.
3. Government subsidized prices force the tax-payer to pay for things that they have not chosen to pay for as consumers.
4. Most politicians when making economic discusion about policy on a wide range of issues stop at stage one with little thinking about the economic consequences going into decisions at the highest levels.
5. In high tax cities there is likely to be an increase in the rate at which business go out of business. When new arising companies have option of deciding where to locate their factories or offices, cities and states where high tax rates are likely are to be avoided. The high-tax jurisdictions can begin the process of losing business, even in stage one. But the losses may not be on a scale large enough that they are noticeable. Overseas shifting of production migrates towards locations where taxes are not so high. The reductions in local business in turn beings to reduce the locally earned income. Employees transfer to the new location and hiring new people at the remote location. Eventually, enough companies' desert, high tax city or state, for which, total revenue is less at a higher rate than during the time of lower rates. By this time, many of the politicians that set in motion higher-tax rate processes in motion have moved to higher office in state or national government. Remaining politicians in office are likely to be blamed for declining tax revenues.
6. New York city was home to 100 of the fastest growing companies in the country. NYC had the highest tax rates in the country and the most expensive real estate per square foot of business office space. Yet the city was spending twice as much per capita as Los Angeles and three times as much per capita as Chicago on a wide variety of municipal programs. The large, spend-and-tax policies had sucess political outcomes, but negative economic consequences. Killing the golden gooses is a viable political strategy.
7. Most government agencies are monopolies. Monopoly tends toward self-indulgent inefficiency. Monopoly is a norm for government agencies, whereas, few private firms are able to prevent rival firms from arising.
8. When government power is used to control price as a way of reducing the cost of various goods and service they are creating shortages. A classic example of controlling prices without controlling costs was the electricity crisis of Californina, 2001-2002. The cost of generating electricity used by California rose for a number of reasons, one being, a year of reduced rainfall and reduced water flow through hydroelectric dams and less electricity production. The cost of electricity of running the generators did not decrease the cost of generating the electricity increased. Electricity from natural gas was rising, so cost of electricity generation from those means increased. Normally, rising costs means rising price, but California politicians imposed legal limits on how high electricity prices would be permitted to rise. The companies generating the electricity passed on cost to the public utilities that distributed the electricity, to the public. The wholesale price was 15 cents per kilowatt and the retail price was 7 cents per kilowatt. "the wholesale prices signaled that electricity was increasingly scarce, but retail prices told consumers that nothing had changed." Blackouts were the inevitable results. The California public utility company went broke. The public companies lacked money and credit with the wholesalers. The governor used state money to buy electricity. In the end Californians paid more for their electricity: billing problems, higher taxes, and depleted surpluses. The rescue endeavor was a failure.
9. Price controls have been causing shortages in countries around the world, and for literally thousands of years of recorded history. Almost all price controls were popular when they were implemented because most people did not think beyond stage one.
10. When a private or governmental institution that can no longer satisfy its customers are forced out of business. Government agencies, can continue on despite demonstrable failures, and the power of government can prevent rivals from arising.
11. All economic systems must find ways to restrict and deny the use of both resources and finished products through one mechanism ... Read More
Rated by buyers -
This book is absolutely fantastic. Thomas Sowell is truly an intellectual of the highest breed. His explainations on how economic policies, which look good on paper, can have far reaching and counter productive effects is clear and interesting. Somehow all his books apply to more then the sphere of life he intends to educate. This book likewise contains a message - of looking at long term outcomes - which applies to not only economists and policy makers but the average man as well. Economics, which has been called a dismal science, tells us of the necessary trade offs that people and institutions with vested interests will not.
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