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Common Sense Economics What Everyone Should Know About Wealth and Prosperity

James D. Gwartney, Richard L. Stroup, Dwight R. Lee, and Tawni H. Ferrarini

St. Martin's Press

0312644892

9780312644895

Hardcover

240 Pages

$22.99

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In this book, the authors, all prominent economists, show why economic understanding empowers those who possess it to better take charge of their own lives and responsibilities to society. In clear, powerful language free of jargon or obscurity, they illuminate the basic principles of supply and demand, private ownership, trade, and more. Common Sense Economics is a lucid, simple explanation of how and why our economy and our world work the way they do, and how and why individuals and nations prosper.

While the global economy recovers from a steep recession, those who fail to grasp basic economic principles such as gains from trade, the role of profit and loss, and the secondary effects of government spending, taxes, and borrowing risk falling behind in their professional careers—even their personal lives. Common Sense Economics discusses key principles and uses them to show how to make wise personal and policy choices.

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Praise for Common Sense Economics

"Economic Journalism is often based on slip-shod analysis; scientific treatises are analytically coherent but unintelligible.  This book is an effort to bridge the awesome gap between these levels of discourse.  It is solid economic analysis, simply presented.”—James Buchanan, Nobel Laureate

“If this book had been written a century ago the wasteful experiments with command economies might have been avoided. After my college-age children read this new edition, their understanding of how markets create social cooperation and wealth and how they can personally be guided in their finances sharply advanced.”—Gary M. Walton, Professor of Economics, University of California, Davis and President of the Foundation for Teaching Economics

"I gave a copy of Common Sense Economics to one of my colleagues who teaches accounting here. He read it this weekend and thought it was so good that he is considering paying his students [half the cost of the book] to read it. We both think the lessons are perfect."—Kelly Hunter Markson, Ph.D., Instructor of Economics, Wake Technical Community College

"My high school students really enjoy this book. It is easy for them to understand and it presents important economic concepts in plain language using clear, often clever, examples. They read the whole book, and we discuss it page by page during class discussion. I believe they get more out of it than their regular text."—David Gardner, Principal and Teacher, Frederica Academy, Georgia

Common Sense Economics is about both personal prosperity and the wealth of nations. It explains how and why ordinary people are able to accomplish extraordinary things when they are economically free and when the policies and institutions of their government are supportive of that  freedom.”—Wayne Angell, Member, Board of Governors of the Federal Reserve System (1986–1994)

Common Sense Economics makes economic principles as obvious and simple as they can be. By weaving careful reasoning with memorable examples and clear writing, the authors explain how economies grow (or don’t grow); how prices coordinate economic activity; and how governments promote or deter economic progress. This is an extraordinary contribution to economic education.”—Kenneth G. Elzinga, Robert C. Taylor Professor of Economics, University of Virginia

“Economics is not only fun and exciting, it’s mostly plain common sense. The authors have done a yeoman’s job in proving just that. Common Sense Economics is not only a fun, readable read but can serve as a handy and important reference for students, teachers, businessmen, members of the media, politicians, and trained economists.”—Walter E. Williams, John M. Olin Distinguished Professor of Economics, George Mason University

Common Sense Economics takes the economic way of thinking to the next level. If every high school graduate understood the principles in this book, people would make wiser choices as consumers, producers, and citizens and the United States would be more prosperous.”—John Morton, former Vice President for Program Development, National Council on Economic Education

“In a time when public policy is being influenced primarily by need, greed, and compassion, this text sets out, in laymen’s terms, the most basic understanding of how the economy really works. Common Sense Economics is a must-read for anyone interested in the truth about wealth creation and effective public policy.”—J. R. Clark, Probasco Chair, The University of Tennessee and Executive Director, Association of Private Enterprise Education

"Splendid and informed exposition of the basic principles of economics. The economics is sophisticated, the exposition simple, concise, lucid, and free from jargon."—Milton Friedman, 1976 Nobel Prize winner

"[Common Sense Economics is] a small book, less than 200 pages, that addresses a serious economist dereliction of duty: making our subject understandable to the ordinary person . . . Common Sense . . . contains a wealth of information about the major sources of economic progress, economic progress and the role of government, and important elements of practical personal finance. The latter contains finance principles on how to invest your money, using the principles of compound interest and how to get more out of your money. There's nothing in the book that goes beyond common sense, something rare these days."—Walter Williams, Jewish World Review
 
"This book forms a bridge between common sense and the basic principles of economics. It is a guide to sound economic reasoning for everyone. Its language is relatively simple, clear, and straightforward without being oversimplified and without sacrificing the really important insights and conclusions. It is a book with a strong message—economic progress is the result of competitive markets, of individual initiatives, and of the limited role of government."—Václav Klaus, President of the Czech Republic

"This book provides the ABCs of how the world creates wealth without anyone having to be in charge because of market incentives—people are free to specialize, and by focusing on what they can do best for themselves, do unintended good for the rest of us. There is no other route to human betterment and poverty reduction."—Vernon L. Smith, 2001 Nobel Prize winner

"Economic journalism is often based on slip-shod analysis; scientific treatises are analytically coherent but unintelligible. This book is an effort to bridge the awesome gap between these levels of discourse. Solid economic analysis, simply presented."—James Buchanan, 1986 Nobel Prize winner

"This book is a must-read for anyone who wants to understand how the world really works and why economic freedom is the central ingredient of prosperity. If every citizen would read this book, our politics would be more enlightened and our nation more prosperous."—Senator Connie Mack

"Gwartney, Stroup, and Lee tell us what everyone should know about economics in language we can all understand. It's refreshing, when three of the best in the profession avoid the all-too-common practice of writing in a code that only other economists can comprehend."—Robert McTeer, former president of the Federal Reserve Bank of Dallas and chancellor of Texas A&M University

"I'm a huge fan of Common Sense Economics . . . It is far and away the most concise, accessible and useful book to promote basic economic literacy that I have found."—Clark L. Maxam, Ph.D., El Pomar Professor of Entrepreneurial Finance, College of Business and Administration, University of Colorado-Colorado Springs

"I gave a copy of Common Sense Economics to one of my colleagues who teaches accounting here. He read it this weekend and thought it was so good that he is considering paying his students (half the cost) to read it. We both think the lessons are perfect."—Kelly Hunter Markson, Ph.D., Instructor of Economics, Wake Technical Community College

"My high school students really enjoy this book. It is easy for them to understand and it presents important economic concepts in plain language using clear, often clever, examples. They read the whole book, and we discuss it page by page during class discussion. I believe they get more out of it than their regular text."—David Gardner, Principal and Teacher, Frederica Academy (Georgia)

"Common Sense Economics worked wonderfully for me. The authors did a superb job of organizing the material and  highlighting the key points."—Peter Leeson, West Virginia University

"Common Sense Economics is a wonderful book. The authors cover the foundations of economic activity and the underpinnings of a prosperous society. They also provide practical advice for personal financial planning. They lay the foundations for good citizenship and for sound stewardship. I heartily recommend this gem of a book for teachers and parents interested in instilling knowledge and wisdom in the leaders of the next generation."—Seth Norton, Aldeen Professor of Business, Wheaton College

"With minimum use of jargon, the authors aim to provide concise and organized insight into economics. Targeting both beginners and experienced executives, they teach basic principles and also provide perspective on the influence of political rules and policies on people and nations. Employing the popular convention of 'lists,' the authors offer 'Ten Key Elements of Economic Theory' (including there is no such thing as a free lunch; hence, we must choose among alternatives since productive resources are limited while human desire for goods and services is virtually unlimited); 'Seven Major Sources of Economic Progress' (including the legal system); 'Ten Elements of Clear Thinking about Economic Progress and the Role of Government' (competition, a disciplinary force, is as important in government as it is in markets); and 'Twelve Key Elements of Practical Personal Finance' (including don't finance anything for longer than its useful life, avoid credit-card debt, and purchase used items.) This is an excellent, readable primer in economics."—Booklist

"A useful overview of the conservative perspective on free market capitalism, this book roughly summarizes the equivalent of a college freshman course on micro- and macro-economics. 'In a fraction of the time devoted to Economics 101, you will have picked up most of its important lessons,' the authors declare in the introduction. And these powerful economists—Gwartney served as chief economist for the Joint Economic Committee of Congress and Stroup was once chief economist for the Interior Department—do ably explain such important concepts as why incentives matter, why providing 'free' services 'merely shifts the costs' to other people and why it's a bad idea to treat the unused balance on a credit card ‘like money in a bank.' They divide the book into four short sections—the key elements of economics, the major sources of economic progress, the role of government, the principles of personal finance—and generally keep their language snappy and easy to understand."—Publishers Weekly

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BOOK EXCERPTS

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Introduction
 
Life is about choices, and economics is about how incentives affect those choices and shape our lives. Choices about education, how we spend and invest, what we do in the workplace, and many other personal decisions will influence our well-being and quality of life. Moreover, the choices we make as voters and citizens affect the laws or “rules of the game,” and these rules exert an enormous impact on our freedom and prosperity. To choose intelligently, both for ourselves and for society generally, we must understand some basic principles about how people choose,
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ABOUT THE AUTHOR

  • James D. Gwartney, Richard L. Stroup, Dwight R. Lee, and Tawni H. Ferrarini

  • James Gwartney holds the Gus A. Stavros Eminent Scholar Chair at Florida State University and is the director of the Stavros Center for the Advancement of Free Enterprise and Economic Education. 

    Richard Stroup is the author of Eco-Nomics and an adjunct professor of economics at North Carolina State University. 

    Dwight Lee is coauthor of Getting Rich in America and holds the William J. O’Neil Chair of Global Markets and Freedom at Southern Methodist University.

    Tawni Hunt Ferrarini is the Sam M. Cohodas Professor of Economics and the Director of the Center for Economic Education and Entrepreneurship at Northern Michigan University.

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