December 5, 2011
Common Sense Economics
Common Sense Economics is packed with valuable information, and approaches presenting this information in a way that is less dry than a conventional textbook. Although there is a lot to learn in this book, I feel like I have already been introduced to 90% of the content in class, this book is simply a supplement and review. The book is broken down into 4 sections: Ten key elements of economics, Seven major sources of economic progress, Economic progress and the role of government, and Twelve key elements of practical personal finance. I believe the discussion of personal finance outlined in the fourth section, while important, is outside of the scope of this course and will therefore not be discussed in this paper. This book is very much a textbook, therefore going through the material and listing off what is in the book will not be feasible in such a short paper, I will however cover the information that struck me as the most interesting or important. Almost everything in the first part of the book is common sense, there is nothing free, people respond to incentives, decisions are made in the margin, profit drives business decisions, the invisible hand. The points that I found more interesting were points 7 and 10: People earn income by helping others and too often long-term consequences of an action are ignored. The book states that if you figure out a way to help other people you will be rewarded with a large income. Even people who are damaging themselves believe that they are getting what they want, for instance cigarette smokers, they are ruining their bodies and destroying their lives, but they want the cigarette and by helping them get the cigarette, companies make a very large amount of money. Cigarette smoking can also tie into point 10: Too often long-term consequences, or the secondary effects, of an action are ignored. Many people who smoke will tell you that...