Common Sense Economics – Review

A short primer on economics for teenagers who want to learn the ingredients of strong economies. The reader will learn what makes nations prosper. The book will also help your teen learn how to become prosperous. (The economists share principles of personal finance.)

 

The book emphasizes key economic concepts such as “incentives matter,” “trade promotes economic progress,” and “the invisible hand” of market prices directs buyers and sellers toward activities that promote the general welfare.” The explanations are engaging and accessible to young people.

Significantly, the book goes beyond concepts to the architecture of economies: the essential parts that must be strong for economies to grow. Topics include the legal system, markets, and government regulations. One begins to understand why private property, contracts, and just (and limited) governments are so critical to the wealth of nations and people.

Lastly, the book will help your child think more intelligently about economics and identify good versus bad economic policy. It’s also an opportunity for parents to help their children absorb personal wealth-building practices, which are explained at the book’s end.

“Profit is a reward for transforming resources into something of greater value.” (18)

“Trade depends on property rights, and a legal system must protect property rights if an economy is to prosper.” (38)

“Exchange is productive; it helps us get more from the available resources. Regulatory policies that force traders to pass through various political roadblocks are almost always counterproductive. A country cannot realize its full potential unless restrictions that limit trade and increase the cost of doing business are kept to a minimum. The market is the best regulator.” (51)

“The deficits are a natural outgrowth of unrestrained democratic politics. If unconstrained by constitutional rules or strong convictions, politicians will use deficits to partially conceal the cost of their programs from voters.” (93)

“Finding the occupational or business activity in which you have a comparative advantage and specializing in it will help you earn more money than otherwise….” (127)