Common Sense Economics Book Review (Book Review Sample)

"COMMON SENSE ECONOMICS" BOOK REVIEW
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Summary
"Common Sense Economics" is resourceful source information as it uses a simple approach to explain the perceived complicatedness of economics. Anyone, regardless whether they have an academic background in economics, can understand economics from a broad spectrum of contexts. The book teaches the insights, which matter in the understanding and evaluation of the economy, both from an individual perspective and government perspective. Unlike other books on economics, the book does not have charts, graphs and formulas; hence, it does not focus on special prerequisite from the readers. Like the holy Bible, the book allows readers to understand the information without the need of guidance. In addition, the book has four parts, one on the key elements of economics. The second part outlines and explains the major sources of economic progress. The third part offers information about economic progress and the role of the government.
The fourth and last part explores and examines the key elements of practical personal finance. Through such an approach, the author’s have managed to break down the most important aspects of economics, which people perceive as complex and provided them in a manner that, readers without economic proficiency can understand. A clear theme from the book is that, the author’s are advocating for a free market, where there is little or no government intervention. This particular theme, however, is consistent with other economic books, which focus more on central economic planning. Moreover, there is substantial evidence that, citizens will feel satisfied when served by a government that aims at enforcing property rights, contracts, develops a safe environment free of fraud and violence.[1. Gwartney, James, Stroup L. Richard , Lee R. Dwight & Ferrarini, H. Tawini. Common sense economics. (New York: St. Martin’s Press) 137.] [2. James, Stroup, Lee & Ferrarini, Common sense economics, 99.]
In relation to the same, the book cites the Economic Freedom of the World (EWF), which outlines the mentioned characteristic of a perfect government. The authors note that, countries with EWF keep their taxes low, allow smooth domestic and international trade and rely on markets, rather than government allocations in disbursement of resources. As part of the discussion on government intervention in business, the authors note that, people must recognize the distinction between political democracy and markets. Democratic government levies taxes in coercion. However, coercive power lacks in the private sector. It is so because private companies can charge high prices for their goods and services, but they cannot force consumers to purchase their goods and services.[2. James, Stroup, Lee & Ferrarini, Common sense economics, 71]
The book concludes in a way that leaves readers reflecting on their personal finance. It is a recommendation that, investors should use low-cost stock index funds over the actively managed funds or even the use of individual stocks. Overall, Common Sense Economics is an easy to read book, and consequently contains resourceful information, which, although theoretically has empirical backing; hence, can apply in real life situation. As a personal recommendation, the book can guide people in learning economics. Even for people who have learnt some economics, or those who have not, the book can educate on how the government affects personal finance, wealth, prosperity and freedom. Most importantly, people can gain knowledge on how the economy and the government work.[3 James, Stroup, Lee & Ferrarini, Common sense economics, 80]
Critique
Not everything good lacks a drawback; however, the identification of a drawback will always depend on the understanding, including the level of analysis one has in the issues addressed in a given publication. Certainly, the book has managed to achieve its objective, which is giving people, regardless of their economic proficiency, an insight into simplified concepts of economics. Notably, when decisions are made using the political process, the majority always wins, meaning that the policy becomes law, at the expense of the minority. It is true to some degree, but to a larger degree, the authors are making an assumption.
The political process is clear, and in some cases, the minority might work to destabilize efforts of growth and development or an overall agenda, which is of national importance. Using this approach, then, the majority might have analyzed, evaluated and considered a given approach, which will help in realizing this national agenda. However, due to different ideologies, and possible efforts to halt any developmental projects, the majority come out strongly to oppose the proposed development agenda. In such a context, it becomes clear that, the majority might be aiming to develop a policy of national importance, but the minorities, who may seek to gain public sympathy, strongly oppose the agenda.[4. James, Stroup, Lee & Ferrarini, Common sense economics, 80]
The book has simplified the concepts in Economics, to ensure that, readers do understand the basics of economics. For my part, I feel that the authors have followed a more psychological approach rather than an economic approach. As such, the authors have provided a theoretical approach, which definitely will work, but economics as it is, requires the use of the quantitative approach. Such an approach provides analysis of concepts using numerals, graphs or calculations to align with what economics as it is known. Therefore, even with the current edition of their book, I feel that, theirs is a traditional analysis of economic principles, which apply to the way economics work.
The book, Common Sense Economics, therefore, is a non-technical exposition of economic matters. As stated, the book does not have any line graph, supply-demand curves or the famous indifference curves, which are important features in the explanation of economic concepts. Therefore, the entire writing is lucid, which aims to help the non-specialist; hence, other critics comment that, the information it contains will not add to the specialists. Far from that, from the introduction to economics, specialists will have much to borrow from the book, and in particular, what they might not have understood back in their studies.
On the other hand, the theoretical way of analyzing economics concepts has focused on the behaviorism of people. In that, the authors have failed to adopt a statistical approach in the determination of incentives. Theirs in a way is an approach that, analyzes the behavior of people when it comes to matters of economics. While the behaviorism approach may receive criticism, well, it has achieved the intended influence. Take for example, the concept of long-term and short-term consequence of an action when it comes to decision-making. The authors have made clear that, people often neglect the consideration of these two aspects, mainly when making the political decisions, which will affect a large group of people.[5. James, Stroup, Lee & Ferrarini, Common sense economics, 29]
The behavioral analysis is consistent with other economic books, and it is relevant considering the way we make choices, not always political, but insightful without considering the two important aspects. In many cases, our decisions aim at realizing short-term rewards at the expense of long-term rewards. Therefore, the motivation is guided by short-term rewards ignoring the long-term punishment. Overall, regardless of the a...