James d. Gwartney

Suggested Additional Readings
Glossary
About the Authors
Academic Advisory Committee
Subject Matter Experts
Translation Teams

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Preface
The authors of this book want you to live a successful and fulfilling life. We also want you, and
every other individual, to live in an environment 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.
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 will 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
economic principles that attracted you to economics in the first place.
The materials are designed to provide a strong foundation, especially for students who
may not take another economics course as well as for the general public who want an insight

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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.
Because the Common Sense Economics team is anxious to share these materials with
instructors, we can offer workshops designed to enhance the ability of instructors to make the
best possible use of our materials. If you would like more information on these activities,
please consult our website at 
http://www.econfun.org
.
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
sacrificed their time, their careers, and even their lives to secure the blessings of political and
economic freedom to this region. We dedicate this book to those heroes of liberty.

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