Preface

The authors of this book want you to live a successful and fulfilling life. We also want you, and all people, to live in a world that allows and encourages everyone to reach their maximum potential. We believe that accomplishing these goals requires both leaders and citizens in general to understand the basic principles of economics. Economic decisions and policies affect each of us in almost every aspect of our daily lives, often in ways we do not fully comprehend. We are continually amazed by the degree of economic illiteracy among politicians and voters. Bad economics is dangerous everywhere, but is especially common, and harmful, in developing and post-communist transition economies. The fundamental purpose of the Common Sense Economics project is to make the key understandings of our profession accessible to all.

Because time is valuable, we have crafted this publication in a way that minimizes the requirement to learn new terms, memorize formulas, or master intricate details important only to professional economists. Rather, we focus on the fundamental insights of economics that really matter—those that will help you make better choices, improve your understanding of our increasingly complex world, and live a more satisfying life.

Regardless of your current knowledge of economics, this book will provide you with important insights. We have tried to make it concise, thoughtfully organized, and reader-friendly. As the work’s title suggests, we believe that the basic principles of economics primarily reflect common sense. The work puts these principles to work, demonstrating their power to explain real world events.

While we don’t want to claim too much, even the fact that you are reading this book is the result of economic transactions made thousands of years ago. Many claim that economic needs lead to the invention of writing and all that this ability made possible.

We aim to help you understand why some nations prosper and others do not. The political process is examined and differences between government and market allocation investigated. Even advanced students of economics and business should benefit from our efforts to pull together the “big picture.” You can temporarily set aside the complex formulas, sophisticated models, and technical mathematics of the profession and concentrate on the questions that attracted you to economics in the first place. Why do some nations prosper and other do not? Why do some people retire rich while others end their lives in poverty? Is big business bad or good for a society? Does my government know what it is doing? How do I know what to believe among all the noise in the internet?

In his masterwork Human Action, Ludwig von Mises put our obligation very well, saying:

“Whoever neglects to examine to the best of his abilities all the problems involved voluntarily surrenders his birthright to a self-appointed elite of supermen. In such vital matters blind reliance upon "experts" and uncritical acceptance of popular catchwords and prejudices is tantamount to the abandonment of self-determination and to yielding to other people's domination. As conditions are today, nothing can be more important to every intelligent man than economics. His own fate and that of his progeny is at stake. Very few are capable of contributing any consequential idea to the body of economic thought. But all reasonable men are called upon to familiarize themselves with the teachings of economics. This is, in our age, the primary civic duty. Whether we like it or not, it is a fact that economics cannot remain an esoteric branch of knowledge accessible only to small groups of scholars and specialists. Economics deals with society's fundamental problems; it concerns everyone and belongs to all. It is the main and proper study of every citizen.”

Our materials are designed to make economics accessible to every citizen, providing a strong foundation, especially for students who may not take another economics course as well as for the general public who want an insight into the workings of the world around them. It is written to be appropriate for secondary school students, for university students in fields other than economics (such as law or journalism), and, especially, for all citizens. In addition to the book you are reading now, we are constantly providing new materials and updates on our activities on our website: www.econfun.org. Check them out! Our fellow teachers of economics will also find many suggestions for involving and motivating classroom materials.

The Common Sense Economics team is anxious to share these materials with everyone. Please help us by posting on your social media. As one of our readers in Central Asia said to us: “I’ve shared it with my friends, with my teachers, with my parents, with my grandparents, and with my little sister. Our vision is that ideas encountered in Common Sense Economics will be shared over dinner tables world-wide.

Over thirty years after the fall of the Berlin Wall, many are questioning the pace and direction of the transition. It is especially important that citizens of the region are not sucked in by the false promises of “illiberal democracy” or “state capitalism.” Many individuals have sacrificed their time, their careers, and even their lives to secure the blessings of political and economic freedom to this region. Unfortunately, many still are. We dedicate this book to those heroes of liberty.