Basic Economics Quotes

“Put in different terms, profit is the price paid for efficiency. Clearly, the increase in efficiency must be greater than the profit, or else socialism would in practice have resulted in more affordable prices and greater prosperity, as its theorists hoped, but the latter never materialized in the real world.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“The painful fact that the poor end up paying more than the rich for many goods and services has a very simple and systemic explanation. It generally costs more to provide goods and services in low-income neighborhoods. For example, insurance and security costs are often higher in poor neighborhoods due to high crime and vandalism rates. This is a factor frequently forgotten by those who look to personal intentions for an explanation for this phenomenon. For example, a shopping center within a populous neighborhood of a midtown city spent 15 percent more on security guards and night lighting than a shopping complex within a residential area of ​​the same city. All these costs are passed on to the consumer in the form of higher prices.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“When laws and policies make honesty increasingly costly, then government is, in effect, promoting dishonesty. Such dishonesty can then extend beyond the particular laws and policies in question to a more general habit of disobeying laws, to the detriment of the whole economy and society.”
― Thomas Sowell, Basic Economics: A Common Sense Guide to the Economy

“If there were any such thing as a “real” or objective value of a newspaper—or anything else—neither the buyer nor the seller would benefit from making a transaction at a price equal to that objective value, since what would be acquired would be of no greater value than what was given up.”
― Thomas Sowell, Basic Economics: A Common Sense Guide to the Economy

“Competition in the market is what limits how much anyone can charge and still make sales, so what is at issue is not anyone’s disposition, whether greedy or not, but what the circumstances of the market cause to happen. A seller’s feelings—whether “greedy” or not—tell us nothing about what the buyer will be willing to pay.”
― Thomas Sowell, Basic Economics: A Common Sense Guide to the Economy

“Young couples with a growing family are often willing to bid more for housing, even if that means buying fewer consumer goods and services, in order to have enough money to pay for additional housing space. A couple who begin to have children may cut back on how often they go out to restaurants or to movies, or they may wait longer to buy new clothes or a new car, in order that each child may have his or her own bedroom. But, once the children are grown and gone, such sacrifices may no longer make sense, when additional other amenities can now be enjoyed by reducing the amount of housing space being rented.”
― Thomas Sowell, Basic Economics: A Common Sense Guide to the Economy

“what each individual wills is obstructed by everyone else, and what emerges is something that no one willed.”
― Thomas Sowell, Basic Economics: A Common Sense Guide to the Economy

“The range of human knowledge and expertise is limited for any given person or for any manageably-sized collection of administrators. Only a certain number of links in the great chain of production and distribution can be mastered and operated efficiently by the same set of people. Beyond some point, there are other people with different skills and experience who can perform the next step in the sequence more cheaply or more effectively—”
― Thomas Sowell, Basic Economics: A Common Sense Guide to the Economy

“People who want special taxes or subsidies for particular things seem not to understand that what they are really asking for is for prices to misstate the relative scarcities of things and the relative values that the users of these things put on them. . . Making anything artificially cheap usually means that it will be wasted.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“Given the scarcity of mental resources, an economy in which knowledge and vision have such a decisive advantage in market competition is an economy that has great advantages in creating a high standard of living for the general population. A society in which only members of a hereditary aristocracy, a military junta or a single political party in power can make great decisions is a society that wastes much of the knowledge, vision and talent of the majority of its members. own people.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“To understand most of the discussions about economics that take place in the media and in politics, all you need is to know the most basic economic principles. However, most of the people are unaware of them, including politicians, journalists and many academics from other fields.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“Sugar producers in the European Union are subsidized even more than their peers in the United States, and the price of sugar in these countries is among the highest in the world. In 2009, The New York Times reported that sugar subsidies in the European Union were "so lavish that even Finland, a cold-climate country, began to produce more sugar," despite the fact that sugar extracted from cane grown in the tropics can be produced at a much lower cost than sugar extracted from beets grown in Europe.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“It is unlikely that those who provide housing, food, medicine or a host of other goods and services, can continue to provide us with the same quantity and quality of these when the costs involved in providing that quantity and quality of goods and services cannot be recovered. . This may not be immediately obvious, a reason why price controls are popular, but the consequences are long-lasting and usually get even worse over time. Homes do not disappear immediately when there is rent control, but they deteriorate over time without being replaced by newer and more suitable ones. Currently available medicines do not disappear when price controls are implemented, but new medicines for the treatment of cancer, AIDS, Alzheimer's and others will probably not continue to be developed at the same speed, when the money to pay for their development is no longer there. Present. But everything takes time to be noticed and the memory of most people may be very short-term and they cannot connect the bad consequences they suffer with the popular policies they supported a few years ago.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“Price controls and the direct allocation of resources by political institutions require much more explicit knowledge on the part of a small number of planners than a market economy requires so that it can be coordinated by prices to which millions of dollars respond. people based on first-hand knowledge of their own circumstances and preferences, and the relatively low prices that each individual must handle.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“One of the greatest defects of the economies run by political authorities, whether under medieval mercantilism or modern communism, is that the vision and insight that emerges among the population does not carry enough weight to force the authorities to change the the way they do things.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“One of the main problems of price control is to define the appropriate price of what is being controlled”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“One of the reasons for the political success of price control is that part of its costs are hidden. Even the dire consequences of the shortage are unable to show the whole picture.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“Capital tends to be scarcer and therefore more expensive in poor countries, while labor tends to be more abundant and therefore cheaper. Poor countries tend to save on the most expensive factor, in the same way that rich countries save on a different factor that is more expensive and scarce there, namely labor. In rich countries, it is capital that is more abundant and cheaper, while labor is scarcer and more expensive.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“While everything requires work to be produced, practically nothing can be produced with work alone. Farmers need land; taxi drivers, cars; the artists, something to paint and something to paint with. Even a comedian needs an inventory of jokes, his capital, as well as hydroelectric dams are the capital of the companies that generate electricity. Capital complements workers in the production process, but it also competes with them for jobs. In other words, many goods and services can be produced with either a lot of labor and little capital”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“In general, the market is smarter than the smartest of its individual participants. - Robert L. Bartley”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“Although corporations are usually seen as large, impersonal and inscrutable institutions, in the end they are simply institutions run by human beings different from each other and who have weaknesses and make mistakes, in the same way that any low-level company does. any economic system and in any country in the world. Even companies that are uniquely adapted to a given set of circumstances can end up being relegated when those conditions change suddenly and competitors are able to respond more quickly. Sometimes the changes are technological, as in the information technology industry, and other times they are social or economic.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“The economic complexities involved when regulatory agencies set prices are further complicated by the political complexities. Regulatory agencies are generally created after political activists launch investigations or publicity campaigns that convince authorities that they have to establish a permanent commission to oversee and control a monopoly, or some other group of companies that are too small in size. number as to constitute a threat of collusion and monopolistic behavior. However, when the commission has been created and its powers established, activists and the media tend to lose interest over the years, and to pay attention to other things. Meanwhile, regulated companies continue to show a lot of interest in the commission's activities and form a lobby that puts pressure on the government to issue beneficial regulations and appoint members of these commissions who are in their favor. The result of these asymmetric foreign interests in these agencies is that the commissions that were created to supervise a given company or industry, for the benefit of consumers, generally become agencies that seek to protect regulated companies from threats from of new companies with new technologies and new organizational methods.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“In summary, a policy intended to make housing more affordable for the poor has resulted in resources being redirected to the construction of houses that are only affordable for the rich or wealthy, since generally , luxury homes are not subject to rent control, and neither are office buildings and other commercial properties. This illustrates, among other things, the crucial importance of making a distinction between intentions and consequences”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“Economic policies need to be analyzed according to the incentives they create, and not according to the hopes that inspired them.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“The success of politicians does not depend on their learning their lessons about history or politics, but depends much more on having the ability to act on what is widely believed by the public and the media, which may include theories conspiracies or the belief that the higher prices are due to deception or greed.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“Since democratic elections are always held in the short term, politicians have every incentive to extract as much wealth as possible from the fixed capital under their jurisdiction, whether through taxes, the imposition of charges on property or of the expropriation. Only public awareness of the long-term consequences can limit this form of exploitation.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“Because immobility is the key to exploitation, fixed capital, like labor, can also be exploited in the short term. And, since some capital goods can last longer than the average life span of a worker, once a hydroelectric plant has been built, both local taxes and local unions can absorb much of its profits, to the point of making very difficult that someone is ever willing to build another hydroelectric plant in that jurisdiction.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“The fact that it is not a single individual or group of individuals who control or coordinate the innumerable economic activities in a market economy, does not mean that they occur randomly or in a chaotic way. Each consumer, producer, retailer, rental land owner, or worker conducts individual transactions with other individuals on pre-agreed terms. Prices convey these terms not only to the individuals directly involved in the transaction, but throughout the entire economic system, and indeed throughout the world. When someone somewhere else has a better product or a lower price for the same product or service, this is passed on and influences everyone's decisions, without the need for a public official or planning commission to issue orders to consumers. or producers. In fact, this happens faster than any bureaucrat takes to collect the information necessary to make their decisions.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“The worst examples of quality deterioration have been in countries where there is price control over medical services. At artificially low prices, many people with minor ailments like colds or rashes end up going to a doctor's office. Under normal circumstances, these ailments would be ignored or treated with drugs that do not need a prescription, but only the advice of a pharmacist. But all this changes when price control reduces the cost of office visits, and especially when these visits are paid for by the government and therefore free for the patient.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy

“China's food comes from abroad: from South America, the United States and Australia. This means prosperity for agricultural traders and processors, like Archer Daniels Midland, which is making its way into China in every way imaginable, into a $ 100 billion domestic processed food market that is growing more than 10 percent annually. This translates into a windfall for farmers in the Midwest, who are now enjoying a two-thirds rise in the price of soybeans compared to a year ago. It also means a better diet for the Chinese, who have increased their caloric intake by a third over the past 25 years.”
― Thomas Sowell, Basic Economics: A Citizen's Guide to the Economy