This is Not an Article, Rather, it is a Collection of Brilliant Quotations (Often at Great Length) from Thomas Sowell

I will be editing this article to add-on new quotes from Dr. Sowell in the future whenever I decide to re-read one of the 11 of his books I have already read and catch a gem of a quote I never had before, or if/when I read another of his 30+ books at some point down the line.

Brief Background and Motivation for Publishing my Google Doc here

Thomas Sowell in the early 1980s

This blog post will just be me copy+pasteing a very long Google Doc I have been maintaining and adding to over the years. Why do that? Well, I am getting tired of sending friends my email address or specifically granting them permission to my Google Doc if they want to read a particular passage I tell them about. That’s the truth right there.

A brief personal note. Dr. Thomas Sowell is tied with Nassim Taleb as my favorite author, living or dead. I was a very different person before I first read Basic Economics at age 18 or 19. I was much more naive, ignorant, self-assured, and self-righteous. After just a few years of reading his books, I was no longer politically or ideologically partisan.

If you have heard of him, or perhaps, seen a couple of YouTube videos of him and want to read his books or consider reading one of his books, I wrote an article about how you should think about that decision assuming you are already an American or American style conservative or right winger. The link to that article is here. Right after that, I copy+pasta’d my review I had wrote for my favorite book of his, Knowledge and Decisions on Goodreads, then corrected some minor errors, improved the writing style and expanded my original review, that review is here.

And finally, I spent well over a month researching for a very long article which if I have enough time, one day I hope to use as my rough draft for a paper which I can submit to an academic journal which specializes in the History of Economic Thought about Sowell as an economist, that article is here.

These Quotes May Set You Free

Great Insights from Thomas Sowell

From Interviews

Ask people who think that overpopulation is a big problem to name a country that had a higher standard of living when it had half of its current population.

Facts, quotes, & stats from Basic Economics

Chapter 9,

time 27:03, “People do not live on percentage shares (of overall national income), they live on real income. Among those individuals who were in the bottom 20% in 1975, 98% had higher real incomes by 1991 and two-thirds had higher real incomes than the average American had back in 1975.”

Time 43:04, “However, as far back as 1971, American single women who worked continuously from high school through their 30s earned slightly more than single men of the same description. Even though women as a group earned substantially less than men as a group.”

Chapter 10, Min wage stuff

Time 16:14, “A majority of professional economists surveyed in Britain, Germany, Canada, Switzerland and the United States agreed that minimum wage laws increase unemployment among low skilled workers. Economists in France & Austria did not, however, the majority among Canadian economists was 85% and among American economists was 90%. Dozens of studies of the effects of minimum wages in the United States and dozens more studies of the effects of minimum wages in various countries (in Europe, Latin America, the Caribbean, Indonesia, Canada, Australia & New Zealand) were reviewed in 2006 by 2 economists at the National Bureau of Economic Research. They concluded that despite the various approaches & methods used in these studies, this literature as a whole was one largely solidifying the conventional view that minimum wages reduce employment among low skilled workers.”

Time 18:00, “Even though most studies show that unemployment tends to increase as minimum wages are imposed or increased, those few studies that seem to indicate otherwise have been hailed in some quarters as having “refuted this myth.” However, one common problem with research on the employment effects of minimum wage laws is that surveys of employers before and after a minimum wage increase can survey only those particular businesses which survived in both periods. Given the high rates of business failures in many industries, the results for the surviving businesses may be completely different from the results of the industry as a whole.”

Chapter 11, International poverty

Time 5:26, “When the UN announced in 2000 a goal to reduce the number of people living on less than $1 per day by 2015 to one half the level it had been in 1990, it turned out that this goal had already been achieved, apparently unknown to the UN officials. The effectiveness of the market does not depend on officials understanding it, the reduction in world poverty continued into the 21st century. Data from the World Bank showed that the % of the world’s population living in extreme poverty fell from 42% in 1990 to 25% in 2005.”

Time 7:06, “By the American definition of poverty, Italy & the Netherlands have twice as high a rate of poverty as the United States, on the other hand by a relativistic definition of poverty (such as people whose incomes are below 50% of their own countries average, the US has more poverty than other countries even though Americans in poverty have a higher standard of living than people in poverty in those other countries.”

Chapter 12, Loan discrimination

Time 49:31, “People who favor interest rate ceilings are often shocked to discover that some racial or ethnic groups are turned down for mortgage loans more often than others and attribute this to racial discrimination by the lenders. But since most American lenders are apt to be white and they turn down whites at a higher rate than they turn down Asian Americans, racial discrimination seems an unlikely explanation.”

Chapter 17, Government Functions,

Time 29:37, “When wallets with money in them were deliberately left in public places as an experiment, the % of those wallets returned with the money untouched varied greatly from place to place. In Denmark for example, nearly all of these wallets were returned with the money still in them. Among UN representatives who have diplomatic immunity from local laws in New York City, diplomats from various Middle East countries let numerous parking tickets go unpaid, 246 by Kuwaiti diplomats, while not one diplomat from Denmark, Japan or Israel had any unpaid parking tickets.”

Facts, quotes, stats, and factoids from his Magnum Opus, “Knowledge and Decisions”

The fallacies Sowell coined in this book:

• The animistic fallacy — the belief that all phenomena whether natural, economic, sociopolitical, or otherwise must be caused by the explicit carrying out of a deliberate plan by a person, a group of persons (a conspiracy), a deity, a specific human institution, or other intentional agents. Sentence 1 of 3 of Chat GPT 4’s brief explanation of it: This is the belief that systemic outcomes are the result of human intentions.
• The physical fallacy — view that a given physical object is always a given value, i.e., that a given object is always of the same value regardless of its time, location, or even to whom you are asking. Chat GPT 4’s explanation of this one wasn’t even close to accurate.
• The precisional fallacy — (1) the practice of asserting the necessity of a degree of precision exceeding that required for deciding the issue at hand. (2) The confusion of decisiveness with exactness. Ditto for this fallacy with Chat GPT 4.

Preface to the 1996 edition

Quote begins around 16:20 of the Preface to the 1996 edition (but it is called chapter 1 in the audio version on Audible):

“In one sense, it might seem that there has been a growing trend in the United States, and in Western civilization generally, toward greater individual freedom from both government control and social control. Words that could not have been used in public just a generation or so ago are now broadcast through the mass media. Both still and motion pictures that would have been banned then are today not only widely available but are even being shown to children in the public schools.

Flouting convention has become almost a convention itself and, for critics of existing society, indignation has become a way of life. As with so many other seemingly revolutionary developments in history, however, the question must be raised whether there has been a net diminution of taboos or a substitution of new taboos and repressions for old. From the standpoint of a study of the social coordination of knowledge and the role of decision-making processes, further questions must be raised as to whether these new social trends represent better or worse ways of coping with the inherent inadequacies of human knowledge when making decisions.”

My restatement/paraphrasing of what he said: Before one celebrates the erosion of old societal taboos, he or she should ask whether there has been a net reduction in the number of societal taboos overall or instead there has merely been a substitution of new taboos for old.

The amazing passage where Tom deconstructs the deconstructionists and their view that everything is ‘socially constructed’ AND THEREFORE EVERYTHING IS ARBITRARY which starts around 20:00 into “chapter 1” of the Audible version, which is really still in the Preface on page 13:

“Many representatives of the new orthodoxies question the very existence of the knowledge which is crucial to decision making. To them, tested knowledge is nothing more than “socially constructed” beliefs-which can be readily replaced by other beliefs which they will construct. The many social verification processes which weed out failing notions and preserve validated knowledge thus disappear from the discourse, as if by sleight of hand, when ideas and practices are seen as merely “constructed” and thus capable of being “deconstructed,” whether in literature, law, or other fields.

The apparent sophistication of this approach can be scrutinized with a physical example, in order to avoid the distractions of ideological presuppositions. Eyesight is, in some sense “constructed,” because it is not merely a matter of light entering the eye and traveling to the optic nerve. From these light patterns the brain must construct a world and project it outward as something that we see. For example, it is not these light patterns themselves but our presuppositions about perspective which enable us to decide that the chair next to us, which looms much larger in our field of vision than the automobile across the street, is nevertheless not as big as the automobile.

We know that dogs do not see the same world we do because they are color-blind and that other creatures with different kinds of eyes, and creatures with sonarlike perception systems, such as bats, must construct their picture of the world from different raw materials of the senses. But does any of this mean that what we see is merely a set of conventions, no more valid than an abstract painting or a vision to be conjured up by the words of articulate writers or orators, or by psychedelic drugs?

Would anyone walk into a lion’s cage because both the lion and the cage, as we see them, are ultimately things constructed in our brains? More important, why not? Only because the verification processes so deftly made to disappear in theory could become very quickly, very brutally, and very agonizingly apparent. That is also the very reason why dogs do not run into a roaring flame and why bats swerve to avoid colliding with a stone wall. All these differently constructed worlds are subjected to verification processes. All these creatures’ worlds, like our own, are indeed “perceptions” but they are not just perceptions. The position of the observer is indeed an integral part of the data, but it is not the only part of the data.

The whole approach of Knowledge and Decisions is the antithesis of that of deconstructionism, for here the prevailing theme is that there is an independent reality which each individual perceives only imperfectly, but which can be understood more fully with feedback that can validate or invalidate what was initially believed. This is applied not only to physical reality but also to social realities, whose many ramifications may not all be understood by any given individual, but whose feedback nevertheless forces the decision maker to change course in spite of whatever predilections that decision maker may have.

To take a trivial and non-controversial example, the initial decision of the Coca- Cola company to change the flavor of their drink to what they thought the public would prefer was rescinded with embarrassing haste when the market response belied the company’s expectations. Stock markets are likewise an ongoing economic referendum on what goods and services people do and don’t want, often disappointing-and punishing-those who guessed wrong, even with the best professional advice available.”

Important takedown of the inappropriate use of the term “privileged” even back in the mid 90s by intellectuals from page xvii:

“The growing prevalence of words like “perceptions,” “stereotypes,” and “socially constructed” serves ultimately to mute or eradicate the distinction between ideas and realities. Yet it is precisely the role of feedback through decision making processes to sharpen that distinction. The disparagement of facts in history, or of original meanings of words and phrases in the Constitution, is part of the more general tendency to treat reality as plastic and the fashions of the times as equal to, or better than, the evolved understandings produced by experience and validated by the assent of successive generations. When works of literature which have gained the respect of generation after generation of readers are called “privileged” writings, not only is a validation process made to disappear into thin air but the very concept of achievement ex post is equated with privilege ex ante.

Economic achievement, for example, is often seen as mere “privilege” and failure as “disadvantage,” again obliterating the distinction between the ex ante and the ex post, to the detriment of any empirical study of the foundations of achievement and failure, since the very distinction itself vanishes by verbal magic.”

Chapter 1: The Role of Knowledge

Section starting around time 24:26 of chapter 1 and lasting until about 26:16 where Thomas is clearly channeling his colleague Armen Alchian in the UCLA economics department, a towering economist in his own right:

“Much of the literature on racial or sexual prejudices and their discriminatory economic effects for example, proceeds in utter disregard of knowledge validation processes, such as competition in the marketplace.

It has often been asserted that women receive only about two-thirds of what men receive for doing the same work. While this assertion is open to very serious challenges on empirical grounds, the more relevant analytical point here is that it treats employers’ perceptions as if they were independent of the validation processes of economic competition.

For women to be paid only two-thirds of what men are paid for doing the same work with the same productivity would mean that an employer’s total labor costs would be 50% higher than necessary with an all male labor force. If all that was involved was blind prejudice, that might seem to be a viable situation. But, even a cursory consideration of the economic implications of trying to compete and survive in the marketplace with labor costs 50% higher than they need be must at the very least raise serious questions.

Similarly, the owner of a professional basketball team might read Mein Kamf and become a convinced racist, but, if he were then to refuse to hire black basketball players, would there be no economic repercussions? Or, would he be more likely to disappear as a professional basketball club owner via the bankruptcy courts?

Note, that what is involved here is not “enlightened self-interest” on the part of individual economic decision makers, but the systemic effects of competitive processes which winnow out those whose decisions diverge most from reality.”

Brilliant comparison of between what a farmhand knows and what a criminologist knows starting around timestamp 19:09 in the audiobook, or on page 9 of the book:

“To say that a farm boy knows how to milk a cow is to say that we can send him out to the barn with an empty pail and expect him to return with milk. To say that a criminologist understands crime is not to say that we can send him out with a grant or a law and expect him to return with a lower crime rate. He is more likely to return with a report on why he has not succeeded yet, and including the inevitable need for more money, a larger staff, more sweeping powers, etc. In short, the degree of authentication of knowledge may be lower in the “higher” intellectual levels and much higher in those areas which intellectuals choose to regard as “lower.”

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Continued, in the next paragraph, Tom criticizes social scientists for calling themselves that and in so doing, trying to appropriate the more deserved public trust in the physical sciences:

A business which produces a product that the public will not buy in a sufficient quantity, or at a high enough price to cover production costs, will have its ideas validated, or in this case invalidated, in a swift and painful process which must be heeded quickly before bankruptcy sets in. The results cannot be talked away. But in many intellectual areas, notably so-called “social science,” there is neither a swift nor a certain authentication process for ideas, and the only ultimate validation is whether the ideas sound plausible to enough people, or to the right people. The stricter standards and independent, often conclusive, evidence in the physical sciences cannot be generalized to intellectual activity as a whole, even though the aura of scientific processes and results is often appropriated by other intellectuals.”

From page 15, why bureaucrats may not be incompetent after all:

“Much criticism of “incompetent bureaucrats” implicitly assumes that those in the bureaucracy are pursuing the assigned goal but failing to achieve it due to lack of ability. In fact, they may be responding very rationally and ably to the set of incentives facing them. For example, government regulatory agencies are often very ineffective in controlling the industry or sector which they have a legal mandate to regulate.

But it is a common pattern in such agencies for those in decision-making positions to (1) earn far less money than comparable individuals earn in the regulated sector, and (2) after a few years’ experience to move on to jobs in the regulated sector. In short, they are regulating their future employers. Under such a set of incentives, it is hardly surprising that decision makers in regulatory agencies approach those whom they are assigned to regulate with an attitude that is sympathetic, cooperative, and even protective.

The only protection of the public interest built into the incentive structure are the penalties for blatantly illegal conduct, such as taking bribes to make a particular decision for a particular company. But explicit bribes are seldom necessary in order to get the regulatory agency to adopt the general viewpoint of the regulated sector, in which many regulatory officials expect to make a more lasting and more lucrative career than is open to them in government.

Morally, it is possible to deplore individual weakness or selfishness, but rationally there is little reason to expect a different outcome from a normal sample of people facing the same structure of incentives. Reform by “throwing the rascals out” seems less promising than reform by changing the structure of incentives facing whoever occupies decision-making positions.

The diversity of personal tastes ensures that no given institution will become the answer to a human problem in the market. The need for food, housing, or other desiderata can be met in a sweeping range of ways. Some of the methods most preferred by some will be the most abhorred by others. Responsiveness to individual diversity means that market processes necessarily produce “chaotic” results from the point of view of any single given scale of values. No matter which particular way you think people should be housed or fed (or their other needs met) the market will not do it just that way, because the market is not a particular set of institutions.

People who are convinced that their values are best-not only for themselves but for others-must necessarily be offended by many things that happen in a market economy, whether those people’s values are religious, communistic, white supremacist, or racially integrationist. The diversity of tastes satisfied by a market may be its greatest economic achievement, but it is also its greatest political vulnerability.

Decision making through any kind of process involves costs created by the decision-making process itself, quite aside from those costs created by the particular decisions reached. Achieving agreement or resolution of opposing views is never free. Nor should these “transactions costs,” as economists call them, be thought of as minor incidental expenses. The transactions costs of choosing a new emperor of the Roman Empire often included tens of thousands of lives and the destruction of whole cities and surrounding country sides in battles among contenders.

The devotion of many rational and public spirited men of later times to the principle of royal succession, which might seem at first to be only an irrational special privilege, is more easily understood against an historical background of astronomical transactions costs in choosing national leaders. Even one who felt that a given king (or kings in general) had only average intelligence, or even somewhat below average intelligence, might still reasonably choose to bear with royal succession if he felt that the likely differences in leadership were not worth the carnage involved in alternative political processes available at the time.”

From chapter 4, around timestamp 19:30 or also, page 39 of “Knowledge and Decisions,” about how one’s property rights can be seized/reduced in a real economic sense by the rules and regulations of a state without them ever having to do anything visible or physical to it!

“Restrictions on the (legal/permitted) future use(s) of property is a reduction in its present value since one component of its present value is its future salability; in short, a reduction in property rights is a partial confiscation of property; to take 10% of the value of land is economically no different from taking away 10% of the land itself.

Similar reasoning applies to other restrictions on other values not expressed in money terms. Changing expectations of future social relationships of school children bring forth varying reactions of (their) parents. In some cases, these present reactions may be more vehement than after the future event actually arrives (as claimed by supporters of (forced) busing for example), but this merely illustrates the correspondence between economic and noneconomic translation (or inherent equivalence) of future expectations into present costs or benefits.”

Chapter 2: Decision-Making Processes

Counter argument from the end of page 35 where Thomas does some intellectual judo and flips the critique back onto those intellectuals and social theorists themselves:

“Another problem with an economic system is that different people have varying amounts of money with which to convey their consumer preferences to producers. For many social critics, this invalidates any hope of an optimal use of resources via market processes. However, this may be a more formidable problem in theory than in practice. When groups of consumers compete for the same products, each of the competing groups usually includes a wide range of income levels, so that a rich-versus-poor competition need not be involved. Moreover, even where such a competition is involved, lower income consumers often bid goods and resources away from the affluent, through sheer numbers, even if not to the theoretically optimal extent.

Much of the outcry against middlemen (“developers, “ “commercial interests, “ etc. ) who would redirect resources from a “higher” to a “lower” use is implicitly a protest against large numbers of lower-income people whose collective wealth is bidding shoreline, forest, and lakeside property away from a use favored by higher-income people to uses more consonant with the tastes and individual resources of lower-income people: typically higher density use, substituting apartment buildings for individual houses, hotels for rustic cabins, automobile access roads for backpack trails, etc. The middlemen, as such, typically have no bias toward any particular use, but only toward making money, a charge bitterly made by critics, despite the inconsistency of that charge with blaming the middlemen for a particular end result.”

Long passage starting towards the end of page 37 (or around 14:32 of ‘chapter 4’ in the Audible version) comparing the types of knowledge and knowledge feedback inherent in political vs economic systems:

“Another problem inherent in political processes is that the degree of reliability or rigidity desired in a governmental framework, within which individual planning and action can take place, is jeopardized by political incentives to continually adjust this framework for the real or alleged benefit of particular groups of constituents. This is a special case of the concentration of benefits and the diffusion of costs. Everyone with an objective interest in a known and predictable set of laws and policies pays the cost of innovative political activities.

This means virtually everyone in the society, including those who benefit from particular subsets of changes. It is not merely so called “liberals” who innovate; so-called “conservatives” may be equally creative with “tax breaks” or monopolistic concessions for a variety of constituent groups as their political opponents are with expenditure programs and government controls for a variety of their constituents. The point is that political surrogates, for whatever constituent coalition they serve, have an incentive to continually adjust the legal framework-whatever it may be at a given moment and regardless of its merits or demerits-because of specific concentrated benefits and the diffused general costs of reduced predictability.

This is neither a moral comment on individuals nor an exhortation for more citizen knowledge of specific governmental policy. On the contrary, it is an attempt to explain the causes of the phenomena in terms of differentials in the cost of information, differentials in transactions costs, and inherent conflicts of interest built into political decision-making processes. To exhort the individual citizen to make investments in knowledge comparable to those of lobbyists and political crusaders (both of whom have much lower costs per unit of personal benefit) is to urge him to behavior that is irrational, if not physically impossible in a twenty-four hour day. What might be possible, at lower cost, is an awareness of this problem inherent in political decision making, when choosing among modes of decision making.

The competition of political opponents tends to mitigate these problems somewhat, but the terms of this competition are quite different from the terms of economic competition. Political knowledge is conveyed by articulation, and its accurate transmission through political competition depends upon the preexisting stock of knowledge and understanding of the receiving citizen. Economic knowledge need not be articulated to the consumer, but is conveyed-summarized-in the prices and qualities of goods.

The consumer may have no idea at all — or even a wrong idea-as to why one product costs less and serves his purposes better; all he needs is that end-result itself. Someone must of course have the specific knowledge of how to achieve that result. What is crucial to economic competition is that better and more accurate knowledge on the part of the producer is a decisive competitive advantage, regardless of whether the consumer shares any part of that knowledge. In political competition, accurate knowledge has no such decisive competitive advantage, because what is being “sold” is not an end-result but a plausible belief about a complex process.

Because of differences in the cost of judging processes versus the cost of judging end results, it is even more important in political than in economic processes to have feedback from the diffused individuals who receive the consequences to the few who made the decisions that produced the consequences.

Where political decision making is broadly defined to include judicial decision making, feedback from those affected is even less effective. Moreover, the cost of a court’s monitoring the consequences of its own decisions could easily be prohibitive, and especially where the consequences include effects on people not party to the legal action, but whose whole constellation of expectations have been changed.

However difficult it may be to directly know what is going on in someone else’s mind-such as changing expectations-it has concrete consequences which take place long before the future events contemplated. Restrictions on the future use of property is a reduction in its present value, since one component of its present value is its future saleability. In short, a reduction in property rights is a partial confiscation of property; to take away 10 percent of the value of land is economically no different from taking away 10 percent of the land itself.”

Why talking about ‘The market’ can be just as lazy, meaningless, and misleading as talking about ‘society’, quote from page 41:

‘“Society” is not the only figure of speech that confuses the actual decision making units and conceals the determining incentives and constraints. “The market” is another such misleading figure of speech. Both the friends and foes of economic decision-making processes refer to “the market” as if it were an institution parallel with, and alternative to, the government as an institution. The government is indeed an institution, but “the market “ is nothing more than an option for each individual to choose among numerous existing institutions, or to fashion new arrangements suited to his own situation and taste.

The government establishes an army or a post office as the answer to a given problem. “The market “ is simply the freedom to choose among many existing or still-to-be-created possibilities. The need for housing can be met through “the market” in a thousand different ways chosen by each person anything from living in a commune to buying a house, renting rooms, moving in with relatives, living in quarters provided by an employer, etc., etc.

The need for food can be met by buying groceries, eating at a restaurant, growing a garden, or letting someone else provide meals in exchange for work, property, or sex. “ The market” ts no particular set of institutions. Its advantages and disadvantages are due precisely to this fact. Any comparison of market processes and governmental processes for making a particular set of decisions is a comparison between given institutions, prescribed in advance, and an option to select or create institutions ad hoc.

There are of course particular institutions existing in the market as of a given time. But there can be no definitive comparison of market institutions-such as the corporation-and a governmental institution, such as a federal bureaucracy. The corporation may be the predominant institutional way of doing certain things during a particular era, but it will never be the only market mechanism even during that given era, and certainly not for all eras.

Partnerships, cooperatives, episodic individual transactions, and long-run contractual agreements all exist as alternatives. The advantages of market institutions over government institutions are not so much in their particular characteristics as institutions but in the fact that people can usually make a better choice out of numerous options than by following a single prescribed process.’

Chapter 3: Economic Trade-Offs

Brilliant re-framing of a common critique of people who make a lot of money as residual claimants by intellectuals from page 77:

The moral question of how does one “justify” the existing “distribution” also misstates the issue. What is called the existing distribution of income is simply a set of retrospective data at a given point in time. These data are generated by an ongoing process in which buyers choose among alternative products available at varying prices, and the sum total of those prices paid during some time span become various people’s incomes.

The question is not what to decide, as to whether specific retrospective data are justified, but rather who shall decide which prospective transactions are justified on what terms in an on-going process. More to the point, shall observers who experience neither the benefits nor the cost use force (the government) to supersede the judgments of those who do? The issue is not between one particular set of statistical results and another. The issue is between one kind of social process and another, and between one set of decision-makers and another.

When large incomes growing out of residual claims are involved, no one has decided that the total was either justified or unjustified, nor is it clear who would possess the knowledge to do so. What each buyer has decided, however, is whether what he himself received was worth it to him-a subject on which he is much better informed. To call for a justification of the overall totals is to call in fact for a re-justification by nontransacting observers to supersede the individual decisions of the transactors.”

SUMMARY AND IMPLICATIONS

Passage which contains the word ‘misinformation’, but it is used correctly, from page 79:

“Price changes convey the changing relative scarcities of different resources, even to persons with no direct knowledge of any of the resources. The results can and must be compared by people unacquainted with the respective processes that produced these results. Price movements economize on the knowledge needed for given decisions. Where such prices are artificially maintained by force, rather than through voluntary transactions, they convey misinformation as to relative scarcities, and therefore lead the economy away from the optimal use of resources. Accurate prices resulting from voluntary exchange permit the economy to achieve optimal performance in terms of satisfying each individual as much as he can be satisfied, by his own standards, without sacrificing others by their own respective standards.”

For Christ’s sake man, there are no such things as “economic values”!:

“Perhaps the most widespread misunderstanding of economics is that it applies solely to financial transactions. Frequently this leads to statements that “there are noneconomic values” to consider. There are, of course, noneconomic values. Indeed, there are only noneconomic values. Economics is not a value itself but merely a method of trading off one value against another. If statements about “ noneconomic values” (or, more specifically, “social values” or “human values”) are meant to deny the inherent reality of trade-offs or to exempt some particular value from the trade-off process, then such propositions need to be made explicit and confronted. Dedication to high and selfless ideals can be no more effectively demonstrated than by trading off financial gains in the interest of such ideals. This is an economic trade-off.”

Chapter 4: Social Trade-Offs

Sub Section: The Animistic Fallacy (begins on page 97)

‘From the point of view of the social utilization of knowledge, time permits entirely different methods for the production and distribution of knowledge from those usually conceived of, and does not depend upon articulation, rationality, cognition, or any of the other formal processes taught in academic institutions. With unlimited time, either the processes of nature or the competition among men may lead to an intricate pattern of results unplanned by anybody.

The fitness or accuracy of these systemic adaptations may be revealed primarily-or even exclusively-in results rather than in articulated rationality. But because man insists on some articulated explanation after the fact, an explanation which overlooks the crucial role of time may emerge as a wholly different-and wholly fallacious-depiction of what has happened.

Perhaps the simplest and most psychologically satisfying explanation of any observed phenomenon is that it happened that way because someone wanted it to happen that way. This applies not only to social phenomena but to natural phenomena as well. Primitive peoples explained the movement of leaves on a tree by some spirit or go who wanted the leaf to move, had the power to make it move, and so it moved.

The analogy of this to purposeful and deliberate human activity is obvious. It is only at a much more developed state of reasoning that the movement of leaves is explained by wind currents of a non purposeful (but also nonrandom) nature, based on differences in air pressure.

The more primitive kind of explanation remains a more spontaneous or “natural” kind of explanation-one that arises first in a wide variety of areas, and is later abandoned only when forcibly displaced by a demonstrable alternative. Some events are in fact the result of purposeful activity toward the goal achieved, but the general presumption that this must be the case can be classified as “the animistic fallacy.”’

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“Darwin was a landmark, not only in the history of biology, but in the history of intellectual development in general. He showed how-with sufficient time-nonpurposeful activity could lead to nonrandom results: he divorced order from “design. “ Yet the animistic fallacy would say that the absence of “planning” must lead to chaos-and the economic and political consequences of that belief are still powerful today.”

Sub Section: Systemic Analysis

3rd evolutionary, Alchian inspired quote in Knowledge and Decisions, from page 100:

“Many of the attitudes, beliefs, and emphases of agrarian peoples are quite reasonable as adaptations to an agrarian environment, however counterproductive these approaches may turn out to be in an urban commercial setting. A fatalistic view of the future, for example, is fully understandable in a culture where people’s whole lives hinge on the random variability of the weather. It is a challenge to try to find any group which emerged from centuries of agrarian life and became a success in an urban environment in one or two generations.

Conversely, the long-urbanized Jews, who became the most successful of all American ethnic groups in the cities in which they concentrated, had an almost unbroken record of failure in agrarian undertakings in various parts of the United States. Generalized “ability” or “discrimination” seem to offer little explanation of such social phenomena, as compared to the explanation of evolutionary adaptation. For other social phenomena, the results may be different.

The point here is not to deny any effect of intentional actions, or even to claim that these are necessarily less than the effects of evolutionary social processes. The point is to challenge the presumptive priority of timeless, intentional explanations-i.e., the animistic fallacy. It is plausible but false to say that “decisions made at random, or without any relation to each other do not fall into any pattern.” Darwin demonstrated that falsity in biology, and such disparate thinkers as Adam Smith and Karl Marx have rejected the same fallacy in analyzing social processes.”

Sub Section: Culture and Individualism

Quote from page 100 is the first fucking time I have ever seen anyone besides me make the proper counter argument to glib arguments one often hears with the rational choice axioms which are supposedly implicit in the neoclassical economics paradigm dominant since Marshall:

“Highly rational intellectual “models” of human behavior suffer from an air of unreality whenever these hypothetical, computer-like incremental adjustments by coolly calculating decision makers are compared to the flesh-and-blood reality of decision by inertia, whim, panic, or rule of thumb. In reality, rational principles themselves suggest a limit to how much rational calculation to engage in. Deliberate decision making is not a free good; that is why there are thermostats and payroll deductions. Decision making has costs, including time, stress, fatigue, insomnia, and heart attacks. Clearly, it is something that must be economized.”

A long passage from page starting on page 102 with the 4th Alchian like quote from Knowledge and Decisions, and for bonus points, in the first paragraph of it, Sowell is sounding A LOT like Nassim Taleb in a great takedown of naive and insular Rationalism:

“Sometimes the choice between cultural and individual decision making isa choice between “ feelings” and articulated rationality. Given the imperfections of language and the limitations of specific evidence, it is by no means a foregone conclusion that the mere formally logical articulation is in fact more rational, much less empirically correct. When the choice between the two processes is not within one individual but between one individual and another (or between one group and another), it is even less likely that the more articulate position is the more valid position. This is not an argument for mysticism rather than logic.

It is simply a recognition that the weight of generalized but unrecorded experience-of the individual or of the culture-may be greater than the weight of other experience which happens to have been written down and spelled out. While specificity and articulation are important, they are not categorically preemptive: every small-sample study cannot overturn the common sense of mankind or the experience of the ages.

Obvious as this may seem, it contradicts the philosophy of rationalism, which accepts only what can “justify” itself to “reason”-with reason being narrowly conceived to mean articulated specifics. If rationalism had remained within the bounds of philosophy, where it originated, it might be merely an intellectual curiosity. It is, however, a powerful component in contemporary attitudes, and affects-or even determines-much political and social policy. At its most extreme, it exalts the most trivial or tendentious “study” by “experts” into policy, forcibly overriding the preferences and convictions of millions of people. While rationalism at the individual level is a plea for more personal autonomy from cultural norms, at the social level it is often a claim-or arrogation-of power to stifle the autonomy of others, on the basis of superior virtuosity with words.

Rationalism is at one end of a spectrum with evolutionism at the other. The evolutionary process sees the determining rationality in a process-unarticulated in whole (animals) or in part (humans)-not in the individuals involved in the process. From this viewpoint, the evolutionary process is no less powerful in its effects for being undiscovered or unplanned. This applies not only to biological evolution but to social processes as well. People have articulated intentions, but history is not a record of those intentions being realized so much as it is a record of entirely different things happening as a net result of innumerable strivings toward mutually incompatible goals.

Hegel and Marx called this “the irony of history” and Adam Smith called it” an invisible hand” determining the social result of an individual’s action-”a result which was no part of his intention.” Darwin’s biological generalization of the same principle made the point even more vivid, since his evolutionary theory applied to animals whose intentions (or “instincts”) hardly included the evolution of their species, and even to inanimate life such as trees and grasses with no apparent intentions at all, but which develop elaborate ecological patterns nevertheless. In short, intentions must, at the very least, compete with powerful non intentional forces.

When culture is conceived of as an evolutionary product-an ecology of human relations-it is by no means clear that any and all well-articulated reasons for changing particular parts of this social ecology must be valid. Even if plausible in the specific case, a policy’s unintended consequences throughout a complex system is a weighty consideration. Articulated rationality can seldom predict very far or very specifically, and much depends on the speed and accuracy of social feedback mechanisms-and on whether the feedback includes incentives to adjust or abandon counterproductive policies.

Given the virtually limitless complexity of evolutionary or ecological processes-whether social or biological-and the limited scope of even the most rational and well-informed mind, it is by no means inevitable that the wisest, hardest working, or otherwise “best “ individuals will be the most rewarded at any given point in time. Evolutionary processes may select the best results without selecting the most meritorious individuals. Even in nature, the “best” fish (by whatever standard) will die in a lake that dries up in a drought, while weaker, less intelligent, poorer swimming fish will thrive in a body of water with abundant nutrients and few dangers.

In a price coordinated economy, those individuals who happen to be holding resources which suddenly acquire great value to others (oil lands when uses were discovered for petroleum) grow rich in spite of themselves. The relevant question is not whether the “best” individuals are selected in this kind of process, but whether the best social result is obtained by such processes for moving resources, or whether alternative schemes would get what is wanted where it is wanted faster or better in some other sense.

The shortages, waiting lines, and production bottlenecks which accompany more apparently “rational” methods of allocating resources suggest that knowledge costs are a handicap that is more readily overcome when each holder of a valuable resource has an incentive to spread knowledge of its availability as quickly and widely as possible in order to get the maximum rewards, however individually undeserved. A similar principle is involved when an informer receives a reward for revealing the location of a wanted criminal.

The question is not so much whether the person deserves the reward as whether it is worth it to the rest of the people to have the criminal out of circulation. In short, the Darwinian “natural selection” principle may mean a natural selection of the “fittest” situation or process, not necessarily individuals. The degree of rationality in the process is by no means limited to the degree of rationality of the individuals, as is often erroneously claimed. Rather, “mankind has achieved things which have not been designed or understood by any individual,” though their value has been retrospectively authenticated by millions who could judge the results without being able to judge-much less design-the process.”

Quote from page 105 I need to put down because I want to disagree with it at a gut level:

“Given that some social processes must convey inherent constraints, the choice is among various mixtures of persuasion, force, and cultural inducements. The less of one, the more of the others. The degree of freedom that is possible is therefore tied to the extent to which people respond to persuasion or inducement. The “conformity” so lamented among Britons and Americans may be related to the freedom which has survived for centuries in both

societies, while much of the world has gone from one form of despotism to another. In any event, the harder it is to persuade or induce, the more it is necessary to force, given that people must mutually accommodate in some way if life is to go on in an interdependent society. The celebration of unbounded individualism means, beyond some point, the acceptance of force either private (crime, riot, vigilanteism) or public (authoritarianism). Terrorists or rioters who say that they want to force a democratic government to “reveal” its “true” authoritarian or “fascist “ nature are in fact simply revealing one of the fundamental trade-offs in all forms of society, however democratic or humane.

It may even have been a toleration or a romanticizing of runaway individualism that created the terrorist mentality and environment in which it could flourish-up to some inherent limit of toleration. Fascism, in fact, began in Italy in response to unchecked public disorders.”

Quote starting on page 107 showing an interesting agreement between Karl Marx and Adam Smith:

“Morality as an input into the social process is subject to diminishing returns, and ultimately to negative returns. With no morality at all, force would be more prevalent-a loss both to those subject to it and to the efficiency of the social processes. A modicum of honesty and decency greatly reduces the incessant and desperate efforts otherwise necessary to protect life and belongings from every other human being. Beyond some point, social morality becomes irksome to individual autonomy. Finally, if each individual were to become absolutely committed to moral behavior as he saw it, no society would be possible among diverse individuals or groups.

Both Karl Marx and Adam Smith recognized that there were levels of morality whose incompatibilities would destroy a society. Marx in fact looked for these incompatibilities of morality-ideologies-to destroy capitalism. For Marx, those ideologies were ultimately based on class self-interest, but direct self-interest could be compromised and accommodated to avoid mutual destruction, while ideologically reified self-interests become moral imperatives which both sides follow to a fatal showdown. This showdown is, of course, what Marx wanted for capitalism, assuming that it would lead to a socialist victory and the end of the conditions which gave rise to class-based rival ideologies.

Obviously, if he had thought that similar ideological confrontations would survive under socialism, leading to the same self-destruction of that and subsequent-systems, then life would become one interminable turmoil, and the relative merits of any given system would mean little. For Marx, destructive morality was justified only by the prospect of a rational and enduring order at the end of it all. He was merciless in his criticism of those who simply pushed moral principles, without regard to their destructive social costs.

Smith recognized the same principle of destructive levels of morality, but opposed those who “insist upon establishing, and upon establishing all at once, and in spite of all opposition” whatever their moral position requires. He contrasted moral or ideological principles in the abstract-what he called “a certain spirit of system”-with “the love of humanity” and “real fellow feeling,” which should moderate “fanaticism” in which people become “dupes of their own sophistry.” In contrast to “the man of system, “the man of “public spirit” will “accommodate” others’ aversions and even prejudices:

When he cannot establish the right, he will not disdain to ameliorate the wrong; but, like Solon, when he cannot establish the best system of laws, he will endeavor to establish the best that the people can bear.

In very different ways, Smith and Marx both recognized that morality, like other inputs into the social process, follows the law of diminishing returns-meaning, ultimately, negative returns. People can be too moral.

Morality can be incrementally counterproductive even where it has not yet reached levels that are categorically destructive of the whole society. Policies for “social justice” are often retrospective, while their effects create current and prospective costs. Beyond some point, those costs can exceed the costs of the initial inequity being corrected. If some group suffers a given loss of X-whether measured in financial or other terms-as a result of social events beyond their control or foresight, they might be regarded as victims of a social injustice, which should be corrected.

But if the cost of correcting it (again, in either financial or other terms) is some procedure costing 2X to the taxpayers or to other third parties, then those who would have to bear these costs are likewise victims of events beyond their control or foresight-and to a greater extent. The injustice has merely been relocated in space or time and increased. For example, in order to prevent retrospective injustice to people in the horse and buggy industry ( who entered a centuries-old occupation in good faith and with no way of knowing that a Henry Ford was coming along), the government could have somehow inhibited the introduction

of the automobile, but millions of other people living in isolated locations would have lost an opportunity to expand their horizons in many ways-and that could amount to a larger loss than the cost of changing occupations from the horse-and-buggy industry to some other part of the economy.”

Fascinating paragraph which includes BOTH a takedown of the lazy way the concept of privilege is used all too often, and the concept of the self-made man:

“In addition to the situation in which morality becomes counterproductive with respect to its own set of values, it may also become counterproductive by its effects on other values. For example, preoccupation with the morality of individual privilege may lead to ignoring important social considerations that are also involved. The question may be asked, what has a particular individual ever done to deserve the wealth, privilege, and power of being king-the answer usually being “nothing”-when the more weighty social question may be the costs and benefits of monarchy as compared to whatever realistic political alternatives exist at a given time and place.

In less extreme cases, where the individual has made some contribution to his own good fortune, the question may still be asked whether it was enough to justify his advantages, when again the larger question may be whether there are institutional alternatives which would produce as good social results for others. The fortunate individual himself may tend to answer within the same moral framework as the critic, and depict himself as deserving-perhaps even regarding himself as a “self-made man,” to use an incredibly naive and arrogant expression. But the social issue may be systemic rather than individual, and preoccupation with morality can be a distraction from considering that larger issue.”

Chapter 5: Political Trade-Offs

The perfect annihilation of the conflation between the freedom to and the freedom from, i.e. positive vs negative rights (page 117):

“When freedom is conceived of as a relationship among people, trade-offs of freedom for material goods, scientific progress or military power, for example, become quite explicit, instead of being subsumed under a general expansion of “freedom” as sweepingly redefined. The growth of the decision making powers of government may facilitate various specific forms of material progress-even if at the expense of material progress in general-while reducing freedom. That trade-off needs to be made explicit. It is instead muddied over by those who define freedom as options (freedom to) and who have many options to promise in exchange for our freedom.

The options approach asks, “What freedom does a starving man have?” The answer is that starvation is a tragic human condition-perhaps more tragic than loss of freedom. That does not prevent these from being two different things. No matter what ranking may be given to such disagreeable things as indebtedness and constipation, a laxative will not get you out of debt and a pay raise will not insure “regularity.” Conversely, on a list of desirable things, gold may rank much higher than peanut butter, but you cannot spread gold on a sandwich and eat it for nourishment. The false issue of ranking things cannot be allowed to confuse questions of distinguishing things.

The mere fact that something may outrank freedom does not make that something become freedom. Moreover, in social trade-offs as in economic trade-offs, all rankings or preferences are incremental at a given point and changeable at other points. Nothing desirable at all is categorically less desirable than something else. Food may be incrementally preferable to any amount of freedom to a starving man, but that does not mean that dessert after a banquet is incrementally preferable to the freedom to go home at the end of the evening.

The great social desiderata are so frequently discussed in categorical language that it is easy to forget their incremental nature-and to talk nonsense with seeming profundity as a result. Both Adam Smith and John Rawls made justice the primary virtue of a society, but their meanings were not only different but nearly opposite, because one was speaking incrementally and the other was speaking categorically.

To Smith some amount of justice was a prerequisite for any of the other features of society to exist, but he was far from believing that all increments of justice invariably outranked increments of other things, and in fact he regarded such a belief as counterproductive and doctrinaire. To Rawls, justice is categorically paramount in the sense of not being incrementally inferior to any other consideration, so that one consideration of justice may be sacrificed only to another consideration of justice, but not to any other desired goal.

According to Rawls, a policy that benefitted all of the human race except one person should not be adopted, no matter how much they were benefitted, nor even if the one person were completely unharmed, because that would be an “unjust” distribution of the benefits of the policy. Perhaps not many people are likely to agree with Rawls’ conclusion, but many use the same arbitrarily categorical approach to social analysis which led logically to such conclusions.”

Paragraph on page 125 which includes a quote from Soviet Premier Brezhnev acknowledging the utter lack of technological investments in the Soviet Union with short-run costs and long-term benefits:

“By creating monitors with a vested interest in the maximization of a given set of values, property rights reduce the social cost of monitoring efficiency. In systems of nontransferable property, the monitor’s incentives are to maximize those values realizable during his own tenure, whether as inheritor of an entailed estate or as a member of a modern planning commission with a fixed term. Where the property is transferable at will, the present value of a property at any given time includes future values realizable long after the time horizon (or even lifetime) of the existing property holder, who therefore has no incentive to restrict his maximization to the short run.

In socialist systems, property transfers take place through political decisions to replace members of the planning bodies or to reorganize the planning structure itself. The property itself never belongs to those individuals, but they benefit both financially and psychically from managing it, and visibly successful management may create a capital gain in the form of increased likelihood of promotion to higher levels of pay or power.

All of this provides short-run incentives for short-run maximization of politically visible values. Morality, ideology, or a sense of history must then be relied upon as incentives for longer-run maximization policies. That such incentives apply to only a limited number of individuals, or to individuals in only a limited number of positions of historic visibility, may be indicated by the fact that long-run investments in the Soviet economy are directed by only a few people at a time. Under short-run incentive structures, individual decision-making units tend to avoid technological innovations with short-run costs and long-run benefits “as the devil shies away from incense,” to quote Soviet Premier Brezhnev in a complaint about Soviet managers.”

EQUAL RIGHTS VERSUS SPECIAL RIGHTS

From page 127:

“Where a particular segment of the population has different rights from the general population at large-either explicitly or in practice-the costs of transacting with that segment will tend also to be different. Anyone with a choice of transacting with illegal aliens, ordinary citizens, or persons with diplomatic immunity, would face different risks (costs) of legal liability against himself and different prospects of seeking legal redress for any damages he might suffer from individuals from each of these respective groups.

If the individuals in these three categories were otherwise identical, any prospective transactor-whether as a prospective landlord, employer, or spouse-would face the least risk of legal trouble from an illegal alien and the most from someone with diplomatic immunity. The abuses suffered by the former and inflicted on others by the latter are both notorious. What is important here is not this retrospective experience of these two special groups, but what that implies more broadly for prospective behavior in society at large.

The more special rights are created for any particular groups, the higher the transactions costs of dealing with that group and the fewer transactions that group will be able to consummate. Special health and safety legislation for youths or women make youths or women less desirable employees than others and thereby reduces their employability. This is not a phenomenon of private capitalist employers only. Soviet managers have avoided hiring younger workers whenever possible for the same reason.

As rights of legal redress for fired workers have grown, so have hiring requirements, to eliminate many who would otherwise be employable if the employer did not need a higher level of assurance before assuming the increased risks of legal liability for firing. Relatives often have special rights on a job, without any explicit agreement to that effect; anti nepotism rules make them less employable to avoid these costs.”

One negative trade-off which comes from creating special new rights, from page 128:

“Perhaps the crucial problem involved in creating special “rights” is that they typically involve reducing the set of options available to the transactors, without any offsetting increase in other options. There is no reason to believe that people will generally make a better set of choices out of a smaller set of options, where the larger set includes all the options in the smaller set. If the purpose is in fact to deny the ostensible beneficiaries their choice and substitute someone else’s choice, that is another matter.”

CATEGORICAL VERSUS INCREMENTAL DECISIONS

From page 137 where Sowell explains the reason for ‘red tape’:

‘Political, and especially legal, decision making tends toward categorical rather than incremental decisions. Partly this is due to the fears engendered by the overwhelming power of government, which is allowed to function only under numerous safeguards-which is to say, numerous limitations on the discretion of individual decision makers.

These fears come not only from the public subject to governmental power in a democratic system, but also from leaders-democratic or nondemocratic-who fear political repercussions from decisions made by anonymous lower level officials too numerous to monitor, as to their exercise of discretion. Numerous and relatively inflexible rules reduce the cost of monitoring, by reducing the basic question to whether or not established procedures were followed.

Individual discretion may not be wholly banished as a consideration, but “a government of laws and not of men’’ is in part a cost saving device. Looked at another way, in a world of zero cost knowledge (omniscience), there would be no need for any rules to guide either the initial decision maker or any higher officials who might subsequently review his decision.

Both the initial decision and any subsequent review of it could be in general terms of how intelligently some issue could be resolved. But initial and reviewing officials and the general public all accept some trade-off of discretionary flexibility for institutional dependability and insurance against discriminatory use of the vast powers of government. “Red tape” is an implicit premium paid for this “insurance.”’

Sub Section: Bureaucracies

SUPER IMPORTANT Quote from page 141 explaining how the fact that government bureaucracies face categorical mandates as opposed to incremental (marginal) trade offs can cause them to blow passed the point of diminishing marginal returns of acting towards some end well into the domain of negative returns:

“Given categorical mandates and the law of diminishing returns, it is virtually inevitable that governmental agencies would eventually end up doing things which seem irrational as isolated decisions. The aggrandizement familiar in all kinds of human activities-from the dressing of babies to the spread of multinational corporations-applies as well to governmental agencies. But where other expansions are constrained not only by budget limits but also by incremental returns from other lines of activity, governmental agencies with mandated activities have every incentive to push those particular activities as far as politically possible-even into regions of negative returns to society.

This is especially apparent in preventive activities, designed to contain various evils. As those evils are successively reduced, either by the agency’s own activity or by other technological or social developments, the agency must then apply more activity per residual unit of evil, just in order to maintain its current employment and appropriations level. If the agency is supposed to fight discrimination against minorities, it must successively expand its concept of what constitutes “discrimination” and what constitutes a “minority.” Urgent tasks such as securing basic civil rights for blacks ultimately give way to activities designed to get equal numbers of cheerleaders for girls’ high school athletic teams.

A nongovernmental organization, such as the March of Dimes, could-as it did, after conquering polio-turn its attention to other serious diseases, but if it had a government mandate strictly limited to polio, it would have little choice but to continue into such activities as writing the history of polio, collecting old polio posters, etc., while children were still dying from birth defects or other maladies. The point here is not that the leaders of the March of Dimes were either more intelligent or morally superior to the leaders of government agencies. The point is that a non-governmental organization subject to feedback from donors or customers has incentives and constraints that lead to institutional decisions more attuned to rational social trade-offs.”

Glorious quote from page 142 where Sowell claims that the NAACP legal defense fund is mostly supported by affluent white liberals:

“More diversified government agencies-such as the Department of Health, Education, and Welfare-have opportunities to change the internal mixture of its activities in response to changing social priorities, but only to the extent that the HEW leadership is in a position to impose agency-wide considerations on the “ warring principalities” under its nominal control.

By the same token, private organizations supported by a narrow constituency such as the NAACP Legal Defense Fund supported by affluent white liberals, may pursue certain activities well into the region of diminishing returns from the viewpoint of its ostensible beneficiaries (blacks) or the society at large, however important its historic mission may have been in the past.”

THE PROBLEM with bureaucracies explained BRILLIANTLY, also on page 142:

“Bureaucracies, by definition, are controlled by administrative or political decisions, not by incentives and constraints communicated through market price fluctuations. While an ordinary business enterprise is constrained to keep its costs of production below the value of the output to the consumer and has incentives to keep it as far below as possible-such incentives and constraints are not merely absent in a bureaucracy but are replaced by other incentives and constraints tending in the opposite direction.

The rank and pay of a bureaucrat is determined by his degree of “responsibility”-in categories documentable to third parties judging a process rather than a result. He is paid by how many people he manages and how much money he administers. Overstaffing, “needless” paperwork, and “unnecessary” delays may be such only relative to social purposes-not relative to the incentives established. Every “needless” employee is a reason for his superior to get a higher salary; so is every “ wasted” expenditure, and every “unnecessary” delay preserves someone’s job.

The more “channels” the citizen has to go through, the more work is generated for the organization. For a bureaucrat assigned a given task (result), the incentive is to require as many people and as much money as possible to achieve that result. What is politically possible depends upon how much his costs are, not their magnitude in relation to the value of the result. Moreover, the bureaucracy can expand the demand for its services by simply pricing them below cost. There is no such thing as an objective quantifiable “need” for anything.

When the price is lower, a larger quantity is demanded. Profit-and-loss constraints mean that a private business can expand its sales this way only as long as its price covers its costs of production. A government bureaucracy, which can dispense its goods or services below cost-including at zero price, in some cases-can always demonstrate a large “need” for its output, and therefore a “justification” for a large staff and budget.”

Quote from page 143 which contains the phrase “there is no such thing as an objective, quantifiable ‘need’”:

“There is no such thing as an objective quantifiable “need” for anything. When the price is lower, a larger quantity is demanded. Profit-and-loss constraints mean that a private business can expand its sales this way only as long as its price covers its costs of production. A government bureaucracy, which can dispense its goods or services below cost-including at zero price, in some cases-can always demonstrate a large “need” for its output, and therefore a “justification” for a large staff and budget.”

The costs of duplication vs consolidation of government services, from page 144:

“A more ratio­nalistic plan of gathering all like activities into an agency devoted solely to that activity means in fact creating incentives to keep that activity alive as long as possible and to pursue it as far as possible, with little or no regard for social costs and benefits. The costs of duplication at a given time must be weighed against these longer run costs of consolidation.”

Quote about how the categorical nature of government decisions creates an incentive for expensive, “internecine” struggles between political tribes from page 145:

“The government tends to categorical decision making not only because of the incentives it faces but also because of the incentives it creates for those outside government. By conferring a valuable right on some group at the expense of some other group(s), the government provides an incentive for expensive, internecine struggles to be the group that receives rather than gives. Naked group struggles, openly recognized as such, would provide the basis for incremental adjustments of competing claims.

But in order to get more public toleration for private interest, the dispute is verbally or ideologically transformed into a clash of principles-which must then be resolved categorically. All-or-nothing decisions raise the stakes, and the resources devoted to being the winner, and lower the probability of a socially optimal result from this socially disruptive process.”

Chapter 6: An Overview

Sowell’s definition of socialism from the beginning of Chapter 6, on page 152:

Socialism is a political and economic system which operates in strict accordance with the following rule:

“Once the legal authorities have defined, combined, and assigned property rights, the subsequent recombination or interchange of those rights (or that property) at the discretion of individuals shall be illegal.”

Quote from page 154 where Sowell criticizes the animistic fallacy on both the political left and right:

“The divergence between individual intention and systemic result affects both causal and moral arguments. The political right and left share a moral version of the animistic fallacy which attributes such systemic results as statistical “income distribution” to personal morality-wealth implying merit (the right) or guilt (the left). Morality is intentional and therefore individual, while purely systemic results are neither just nor unjust, though some results may be preferred to others. War, slavery, or genocide can be morally condemned as deliberately chosen policies, but the repeated ravages of bubonic plague were simply tragic consequences of sociobiological systems in a given state of knowledge.

Systemic results can be improved, as by the expansion of technological boundaries, but such social improvement is morally neutral. The desire to judge systemic results morally can be seen in the medieval practice of attributing plagues to sins which had aroused the anger of God, or the modern practice of attributing unhappy systemic results in general to the moral failings of a personified “society.”

Chapter 8: Trends in Economics

Very long quote, starting on page 184, in which Sowell talks about the history of transportation in the United States, and explicitly cites a UCLA School Economist, namely George W. Hilton:

‘The history of American transportation, from municipal bus and streetcar lines to railroads and airlines, is a history of government-imposed cross-subsidies. Initially, municipal transit was privately owned by a number of firms operating streetcars along various routes. The creation of city-wide franchises-monopolies-was usually accompanied by fixed fares, regardless of distance traveled or transfers required. Short-distance passengers subsidized long-distance passengers. The effects were not only distributional but allocational.

More resources were devoted to carrying people long distances than would have been if the true costs had been conveyed to those using the service. Therefore, the creation of suburbs and central business districts was subsidized, at the expense of people living in the city and of neighborhood enterprises. The question is not which of these residential or business arrangements is “better” in some categorical sense. The point is simply that cross-subsidy conveyed false economic information to those making decisions as to where to live or shop, and the fact that the subsidy never appeared in a government budget conveyed no information at all to the electorate.

Like most price discriminators, municipal transit was vulnerable to competitors who chose to serve the overcharged segment of their customers. Around 1914–1915, the mass production of the automobile led to the rise of owner-operated bus or taxi services costing five cents and therefore called “jitneys, “ the current slang for nickels:

The jitneys were owner-operated vehicles which essentially provided a competitive market in urban transportation with the usual characteristics of rapid entry and exit, quick adaptation to changes in demand, and, in particular, excellent adaptation to peak load demands. Some 60 percent of the jitneymen were part-time operators, many of whom simply carried passengers for a nickel on trips between home and work. Consequently, cities were crisscrossed with an infinity of home-to-work routes every rush hour.

The jitneys were put down in every American city to protect the street railways and, in particular, to perpetuate the cross-subsidization of the street railways’ citywide fare structures. As a result, the public moved to automobiles as private rather than common carriers . . .

In short, the cross-subsidy scheme not only distorted the location of homes and businesses; it artificially increased the “need” for private automobiles by forcibly preventing or restricting the sharing of cars through the market.

Ironically, years later, some municipalities have tried to encourage carpools to reduce traffic congestion, but car-pooling through nonmarket mechanisms requires far more knowledge than through the market for jitneys, and conveys far less incentive for dependability and cooperation. Because car pools are advance agreements among particular small subsets of persons, rather than a systemic arrangement for all the cars and passengers in the whole set of travelers, enormous sorting and labeling costs are involved in car-pooling-determining specifically who is going where and discovering how dependable and punctual each other person in the subset happens to be.

By contrast, the jitney owner made profits by picking up people (usually on his own way to work) and had every incentive to pick them up on time every day, or some other jitney owner would pick them up before he got there. But with nonmarket car pools, a particular set of riders is waiting for a particular car-and it remains illegal for other cars to sell their services to them without a city franchise as taxis.

Under these constraints, car pools have done little to relieve traffic congestion, despite much exhortation The rush-hour traffic congestion caused by thousands of people going to work separately in individual automobiles has been denounced by social critics as “irrational” and explained by some mysterious psychological attraction of Americans to automobiles. It is, however, a perfectly rational response to the incentives and constraints conveyed.

The actual costs and benefits of automobile-sharing are forcibly prevented from being conveyed by prices. As in other areas, claims of public irrationality are a prelude to arguments for a government-imposed rational “solution” to the “problem.” Also as in other areas, it is precisely the government’s use of force to prevent the accurate transmission of knowledge through prices that leads to the suboptimal systemic results which are articulated as irrational intentional results of a personified “society.”’

Ingenious counter argument to a standard argument made (even by economists) as to how a monopoly can happen in a private industry from page 211:

“One of the theories used to justify the Robinson-Patman Act is that big producers would otherwise temporarily cut prices, driving out small competitors, and later raise prices to monopolistic levels. Concrete examples have been notable by their scarcity (or nonexistence), even though the country existed for 160 years before the Robinson-Patman Act was passed.

Even as economic theory, the argument has serious problems, because the only certainty would be the short-run losses sustained to drive out smaller competitors, while the longer-run profits needed to recoup these losses are highly problematical, because of innumerable ways that new competition can arise-including buying up the assets of the bankrupted firms at bargain prices and then profitably underselling the would-be monopolists.

Actually, neither the empirical nor the theoretical case is made in specific antitrust prosecutions under the Robinson-Patman Act. It is the defendant who must rebut the prima facie case, and the sinister theories merely hover in the background as unarticulated presumptions.”

Fascism and socialism defined by the locus of ownership and control of economic resources within a country, from page 214:

“We have already examined particular examples of the government’s superseding of other people’s plans, as in various forms of price control, control of particular markets, or direct or indirect transfers of resources. What remains to be examined is comprehensive economic “planning”-the subordination of nongovernmental economic decisions in general to a design imposed on the whole economy. This can take place while retaining private ownership of physical or financial assets (capitalism), as happened under fascist regimes, or government ownership of the means of production (socialism) may accompany comprehensive “planning,” or such government ownership may coexist with market pricing mechanisms instead of “planning,” as in so-called “market socialism” (Yugoslavia being an example).

There are also welfare states (such as in Sweden) which may call themselves “socialist” but which operate largely through tax transfers of income earned in a private economy, rather than through comprehensive government control of production decisions. The focus of the analysis here will be comprehensive economic “planning” in general, rather than its particular political or ideological accompaniments. That is, the analysis will be in terms of institutional characteristics rather than hoped-for results.”

Oh interesting, not only is he distinguishing the difference between fascism and socialism along the dimension of ownership of the means of production and distribution, (nominally) private ownership under fascism vs government ownership under socialism, but also along the dimension of the degree of central planning, and in so doing opens to door to sort of like, a different kind of mixed economy. We think of our economy as a mixed economy, but mainly market based, this would be just the reverse.

Chapter 9: Trends in Law

Chilling and eye opening quote from page 250 about how The Civil Rights Act of 1964 explicitly said it did not mean equal outcomes:

“Both the presidential orders and the congressional legislation required various administrative agencies-existing and newly created-to carry out and formulate more specific policy on a day-to-day basis. It was here that “affirmative action” was transformed from a doctrine of prospective equal opportunity to a doctrine of retrospective statistical “representation” or quotas. This transformation was all the more remarkable in the light of the explicit language and legislative history of the Civil Rights Act of 1964, which expressly repudiated the statistical representation approach.

While steering this legislation through the Senate, Senator Hubert Humphrey pointed out that it “does not require an employer to achieve any kind of racial balance in his work force by giving any kind of preferential treatment to any individual or group.” There was an “express requirement of intent” before an employer could be found to be guilty of discrimination. Ability tests would continue to be legal, even if different proportions of different groups passed them.

Another supporter, Senator Joseph Clark, pointed out that the burden of proof would be on the government to show discrimination under the Civil Rights Act. Still another supporter, Senator Williams of Delaware, declared that an employer with an all-white work force could continue to hire “only the best qualified persons even if they were all white. “All these assurances are consistent with the language of the Civil Rights Act (see below) but not with the actual policies subsequently followed by administrative agencies.”

Quote from the ’64 Civil Rights Act:

“Nothing contained in this title shall be interpreted to require any employer, employment agency, labor organization, or joint labor-management committee subject to this title to grant preferential treatment to any individual or any group because of the race, color, religion, sex, or national origin of such individual or group on account of an imbalance which may exist with respect to the total number or percentage of persons of any race, color, religion, sex, or national origin employed…” Section 703(j), Civil Rights Act of 1964.

Paragraph from page 253 which includes ‘Blacks have rejected preferential treatment 64 percent to 27 percent.’:

“The flouting of congressional intent brought attempts to return to the initial meaning of “affirmative action” as an attempt to “expand the pool of applicants.” This attempt to amend the law failed, and its failure illustrates temporal bias as it affects special interest groups. Laws do not simply respond to pre-existing special interests. Laws also create special interests which then affect what is subsequently politically possible. As noted before, special interests are essentially people who have lower costs of knowledge of their own stake in government policy, and in this sense special interests include governmental personnel whose jobs and powers were created by given legislation.

The “affirmative action” policy followed had enormous impact on the agencies administering such policies. For example, within a period of three years the EEOC’s staff of lawyers increased tenfold. The impact on minority employment has been found to be relatively minor. Blacks have rejected preferential treatment 64 percent to 27 percent. Four-fifths of women also reject it. Indeed, no racial, regional, sex, income or educational group studied by the Gallup Poll favors preferential treatment. Yet the drive of the administering agencies and the general acquiescence of the courts has been enough to continue policies never authorized by Congress and contrary to its plainly expressed legislative intent.”

Quote from page 258 showing that activists got all butthurt whenever good news of progress was published even all the way back in 1971!:

“Each ethnic group has its own geographic distribution pattern, reflecting a variety of historical and cultural influences, and having little to do with the intentions of “society.” Some indication of the combined influence of age and location is that young black working couples living outside the South had by 1971 achieved the same income as their white counterparts in the same region. The disbelief and even denunciation which greeted publication of this fact indicates something of the vested interests that have built up in a different vision of the social process-and in programs built on that vision. Subsequent studies have reinforced the finding of income parity among these black and white younger age-cohorts with similar cultural characteristics.

The point here is not that all is well. Far from it. The point is that both causal determination and policy prescription require coherent analysis, rather than gut feelings garnished with numbers. Many of the hypotheses behind “affirmative action” are not unreasonable as hypotheses. What is unreasonable is turning hypotheses into axioms. The preference for intentional variables (“discrimination”) has virtually excluded systemic variables (age, location, culture) from even being considered. The practical consequences of this arbitrary theoretical exclusion extend far beyond the middlemen-employers-to much larger and more vulnerable groups, notably ethnic minorities themselves.

Every false diagnosis of a condition is an obstacle to improvement. When recent studies show the still substantial black-white income differences to reflect conditions that existed before the younger age-cohorts ever reached the employer-reading (or nonreading) habits in the home, education, etc. this has implications for the effectiveness of programs which (1) postulate that discrepancies discovered at the workplace are due to decisions made at the workplace, and (2) establish legal processes centering on the workplace.”

Greatest argument in favor of equal opportunity laws compared to affirmative action laws I have ever seen by a country mile, from pages 259–260:

“The ineffective record of “affirmative action” policies is in sharp contrast with the record of “equal opportunity” laws in the years immediately preceding. After passage of the Civil Rights Act of 1964-and before quotas in 1971-black income as a percentage of white income rose sharply, with blacks in white collar occupations also rising, along with rising proportions of blacks in skilled and professional jobs. One reason for the difference was the different set of incentives presented by the two policies. “Equal opportunity” laws provided penalties for specifically proven discrimination. “Affirmative action” laws penalized numbers that disappointed administrative agencies, and made defenses against “rebuttable presumptions” costly and uncertain.

It might appear at first that “affirmative action” penalties-costs-were “stronger” (higher), but not when costs are recognized as opportunity costs, the difference between following one course of action rather than another. The general unattainability of many quotas means that penalties fall equally on discriminatory employers and nondiscriminatory employers. A discriminatory employer therefore has little to gain by becoming a nondiscriminatory employer, when the characteristics of the target population (age, education, etc.) insure that he will be unable to fill quotas anyway.

Moreover, the ease with which a discrimination case can be made makes minorities and women more dangerous employees to have, in terms of future prospects of lawsuits if their subsequent pay, promotions, or other benefits do not match those of other employees or the expectations of administrative agencies. As in the case of other groups with special rights, as noted in Chapter 5, these rights have costs to the recipients themselves. In short, “affirmative action” provides opposing incentives to hire and not hire minorities and women. It is not surprising that it has been less effective than “equal opportunity” laws which provide incentives in only one direction.”

The Green decision in 1968 was total bullshit and the polar opposite from the Brown decision in 1954! Page 262–263:

“In the 1968 case of Green v. County School Board, the Supreme Court declared unconstitutional a “free choice” enrollment plan because there was now an “affirmative duty” to eliminate dual school systems “root and branch.” As in other areas, prospective equality of opportunity was tested by retrospective results. Because only about 15 percent of the black children had chosen to transfer to the formerly all-white school and no white children had chosen to transfer to the all-black school, there was not a desegregated or “unitary” school system, according to the Supreme Court. The Green decision was as different from the Brown decision as the two colors in their titles.

Brown required pupil assignment without regard to race and Green required pupil assignment specifically with regard to race, so as to eliminate statistical imbalances in the results. Yet the Supreme Court treated the 1968 decision as logically derived from the 1954 decision, though no such derivation was explained-the 1954 decision being only mentioned but not quoted.

The Green decision has been aptly characterized as “a masterwork of indirection” and” a rarely equaled feat of sophistry.” The court simply pushed on from one victory to a further objective, in the manner of other unconstrained institutions continuing in a given direction, in disregard of diminishing or negative returns.”

Quote from the beginning of chapter 18 of Sowell’s masterpiece Knowledge and Decisions:

“Even within the area of race, it is by no means clear that all historic grievances have a remedy or who specifically should pay the costs of such remedies as might be attempted. If the purpose is to compensate (black Americans) for the pain and suffering of (American) slavery, those most deserving of such compensation are long dead.

If the purpose is to restore their descendants to the position the ladder would now occupy but for the enslavement of their ancestors, is that position the average income, status, and general well-being of other Americans? Or (is it) the average income, status, and general well-being in their (ancestor’s) countries of origin?

The former implicitly assumes what is highly unlikely, a voluntary immigration comparable to the forced shipment of blacks from Africa; and the ladder raises the grotesque prospect of expecting blacks to compensate whites for the difference between American and African standards of living!

If what is to be compensated is the unpaid economic contribution of slave ancestors to American development, this is an area in which controversies have raged over centuries over the effects of slavery on the American economy. Not merely over its magnitude, but even over whether slavery’s contribution was positive or negative!

If what is to be compensated is the unpaid economic contribution of slave ancestors to American development, this is an area in which controversies have raged for centuries over the effects of slavery on the American economy-not merely over its magnitude, but over whether slavery’s contribution was positive or negative. Without even attempting to resolve this continuing dispute among specialists, it can be pointed out that the case for a negative effect can hardly be dismissed a priori.

The South was poorer than the North even before the Civil War, and those parts of the South in which slaves were most heavily concentrated have long been the poorest parts of the South, for whites as well as blacks. Compensation based on the economic contribution of slavery could turn out to be negative. Would anyone be sufficiently devoted to that principle to ask blacks to compensate whites? Or is this simply another “results-oriented” principle, taken seriously only when forwarding some other purpose?

If the basis for special or compensatory treatment of blacks is simply a desire of some segment of contemporary white society to rid itself of guilt for historic wrongs, the question arises as to why this must be done through institutions which extend the cost to other-perhaps much larger-segments of the society whose ancestors were not even in the United States when most of this happened; or were in no position to do anything about it.

Even the argument that they or their ancestors were passive beneficiaries of racial oppression loses much of its force when it is unclear that there were any net social benefits beyond the immediate profits of a tiny group of slave owners. If there were ever any net social benefits, it is questionable whether they survived the Civil War, whose costs seemed to confirm Lincoln ‘s fear that God’s justice might require that the wealth from “unrequited toil shall be sunk” and “every drop of blood drawn with the lash shall be repaid by another drawn with the sword.”

Individual compassion or a sense of social responsibility for less fortunate fellow men does not depend upon theories of guilt or unjustified benefits, but without such theories it is harder to justify compulsory exactions upon others. Nor do the others accept such exactions without resentment: some “find it just a bit ironic when they demand that we feel guilty for what their ancestors did to the blacks….” Moreover, specific compensatory activities may be opposed by the intended beneficiaries themselves-as in public opinion polls which have repeatedly shown a majority of blacks opposed to quotas.

So it is not clear that guilt-reduction activity is a net social gain. The reduction of guilt, or the expression of social and humanitarian concern, can take place through any number of voluntary organizations, which have in fact made historic contributions to the advancement of black Americans.”

Page 278 quote which includes the term equity:

“In recent years criminal law procedures have often been viewed, not as social institutions for transmitting knowledge about guilt or innocence, but as arenas for contests between combatants (prosecution and defendants) whose prospects must be to some degree equalized. In particular, the power of the state is depicted as so disproportionate to that of the defendant that some kind of equalization is in order.

There is even great concern for intra criminal equity-equalizing the prospects of criminals with varying sophistication to escape prosecution or conviction. If experienced criminals, gang members, and Mafiosi know how to “stonewall” police questions, then “elemental fairness” requires that similar sophistication be supplied by the government to less sophisticated criminals as a precondition for a guilty verdict to stand up in the appellate courts.”

Passage starting on page 281 where Sowell is being an absolute savage, and I love it:

“The moral questionability of punishment derives from the premise that “vengeance” is a “brutalizing throwback to the full horror of man’s inhumanity in an earlier time…” This argument from location in time is buttressed by claims that a personified “society” itself causes crime. According to this theory, “healthy, rational people will not injure others,” so that crime is the result of a social failure to create such people or to rehabilitate the criminal into becoming someone who “will not have the capacity-cannot bring himself-to injure another to take or destroy property.” Neither blueprints nor examples are provided. Moreover, these quotations are not from a sophomore term paper, but from a book widely hailed by legal scholars, practicing lawyers, and leading newspapers and magazines.

In a similar vein, Chief Justice Earl Warren found crime “in our disturbed society” to be due to “root causes’’ such as “slum life in the ghettos, ignorance, poverty” and even-tautologically-the illegal drug traffic and organized crime. “Root causes” are prominently featured in this literature, and confidently spoken of as if they were well-documented facts, rather than arbitrary assertions at variance with the empirical relationship between the rising crime rates and reduced poverty and discrimination.

The idea that people are forced to commit crimes by bad conditions of one sort or another also ignores thousands of years of history during which kings and emperors, raised in the midst of luxury, committed the most brutal atrocities against their subjects.

The argument that punishment does not deter takes many forms. At the most primitive level, failure of punishment to deter is claimed on the ground that various crimes-or crimes in general-have not been categorically eliminated. From this standpoint, the very existence of crime is proof of the futility of deterrence, for “criminals are still with us.”

By parallel reasoning, we could demonstrate the futility of food as a cure for hunger, since people get hungry again and again despite having eaten. An old joke has a small child decrying baths as futile because “you only get dirty again.” Similar reasoning by a grown man who was also the top law enforcement officer in the country seems somewhat less humorous, though no less ridiculous.”

The precisional fallacy with respect to arguments made by advocates of judicial activism in the 20th century against originalists, from pages 292–295:

“The precisional fallacy-the confusion of decisiveness with exactness runs through the literature advocating judicial activism: the Constitution lacks “precision” or is not “exact,” and is “muddy” or “clothed in mystery.” The self-serving nature of “convenient vagueness” was exposed by Felix Frankfurter long before he became a Supreme Court Justice. The question he asked was — ‘Convenient’ for whom and to what end?”

While genuine agnosticism might be associated with caution, tolerance, or indecisiveness in the area of uncertainty, judicial avowals of agnosticism are frequently preludes to revolutionary changes in the interpretation of the Constitution. Even some supporters of judicial activism recognize the judicial tendency “to resort to bad legislative history” as an excuse to reinterpret the law. A fictitious legislative history may even be fabricated out of whole cloth, as when the Supreme Court majority in Bakke claimed that Congress had not considered “reverse discrimination” when writing the Civil Rights Act of 1964, even though it is a matter of record that reverse discrimination issues came up again and again during the debates.

Much of what has been done under the claim of vagueness has been directly counter to intentions that were quite clear as regards those particular interpretations, regardless of how unclear it might have been on other things. It is the kind of judicial approach that has been called “statesmanlike deviousness” and “dissimulation” that is “unavoidable” by a partisan of judicial activism and “merely window dressing” by a critic who considers it “a Marxist-type perversion of the relation between truth and utility.”

More fundamental than the question as to whether original constitutional meanings and intentions can be discerned is the question whether those meanings and intentions should be sought and followed as rules for present day judicial decisions. Admirers of judicial activism emphasize the need for “the evolution of principles in novel circumstances,” in that the Constitution is “a complex charter of government, looking to unforeseeable future exigencies” and virtually “an invitation to contemporary judgment.”

The framers of the Constitution “did not believe in a static world” or in a constitution “forever and specifically binding,” and we must use “our own reasoned and revocable will not some idealized ancestral compulsion.” Therefore we must “update the Constitution’’ to “keep the Constitution adjusted to the advancing needs of time.” In this context, the·original interpretations of the framers of the Constitution are merely “artifacts of verbal archeology” and to take them seriously is a “filiopietistic notion” which would allow the founders of the republic “to rule us from their graves.”

As in the case of precision, so in the case of change, a great amount of effort (and airs of “realism”) go as into arguing something that is both obvious and irrelevant to the conclusion actually reached, in the situations in which it is applied. To argue about “change” in generalized terms is to argue with oneself, for no sane person denies change since the writing of the Constitution. The question is-what kind of change: technological, verbal, philosophic, geographical, demographic, etc. , and in what specific way does the change affect a particular constitutional provision or its application? This the activists shy away from.

Clearly there are technological changes, such as electronic listening devices, which raise questions about the constitutional right to privacy in a context unforeseen by the writers of the Constitution. But the great controversies raging around the Warren Court’s judicial activism have involved things that have existed for hundreds or thousands of years-the death penalty, the segregation of racial groups (the very word “ghetto” derives from the Jewish experience in centuries past), the arrest of criminals, the power of bureaucracy (both the Roman Empire and ancient China developed stifling bureaucracy), the gerrymandering of political districts, and the different weighting of votes.

In this particular context, the constant reiteration of the word “change” is little more than a magic incantation. It is hard to imagine why the writers of the Constitution would have set up a congress or a president as decorative institutions if they thought there would be nothing for them to do in meeting the evolving needs of the nation. Incantations about “change” cannot drown out the central question in any social process-not what is to be done, but who is to decide what is to be done, and under what incentives and constraints? This question is at the heart of constitutional government, and no amount of insistence that someth-ng be done-or that something new be done-can be allowed to obscure it.

Words and “original intentions” become important as constraints-not as historical or archaeological artifacts, nor as pious ways of showing reverence for the Founding Fathers. Knowledge costs are crucial in conveying “the law of the land” across a vast and diverse nation, and through time across the centuries. What is crucially different about the original meaning of a given permutation of words in the Constitution (compared to alternative meanings that might accord just as well with a dictionary or a grammar book) is that that particular meaning has been documented, reiterated, analyzed and diffused throughout a vast decision-making network, and major public and private commitments made within the framework of that meaning.

Frameworks sometimes have to be changed despite enormous losses, but the issue is who is to decide when and how. Shall it be elected officials subject to feedback from those who actually pay the many costs of changes in the social framework, or shall it be an appointed judiciary influenced only by those particular viewpoints to which it is arbitrarily responsive (known as “moral conscience”) and arbitrarily oblivious to other views (known as “public clamor”)? Shall the change be made openly, weighing the costs and benefits in the light of all the knowledge and experience diffused among all the people, or shall it be accomplished by verbal sleight-of-hand in the Supreme Court chambers and in the light of the constricted experience of nine individuals?

Important as these issues are in particular constitutional decisions, they are truly momentous when considering a general policy of judicial activism which throws doubt over the whole framework of laws, not merely those particular laws arbitrarily changed by judicial fiat. The “above the law” thinking implicit in judicial activism can also spread beyond the courts to other branches of government, as the Watergate episode illustrates.

The very rhetoric of a “flexible” constitution which can be interpreted “ in the light of modern needs” was used in the Nixon inner circle. a,s The extralegal transfer of the constitutional war-making power from Congress to the president, so bitterly resented during the Vietnam War, was in the same tradition. The selective indignation of the press and the intellectual community generally to these very similar usurpations for very different purposes is part of the environment within which judicial activism flourishes.”

Thomas Jefferson quote from page 296 which shows he foresaw the potential dangers of judicial activism:

“Ironically, the much-disdained “original intentions” of the framers of the Constitution foresaw the problems which the twentieth-century sophisticates had to discover from hard experience. Thomas Jefferson regarded judicially activist judges as a “subtle corps of sappers and miners” of the foundations of the American form of government, who would concentrate power in the federal government, because that would “lay all things at their feet….”

Chapter 10: Trends in Politics

Sub Section: Totalitarianism

Passage which includes Mussolini’s definition of totalitarianism, pages 306–307:

“It is not simply the origin or basis of political power that defines totalitarianism, nor even the amount of power or its ruthless application. A tyrant is not automatically a totalitarian. It is the political blanketing of the vast range of human activities-from intimate personal relations to philosophical beliefs-that constitutes “totalitarianism.’’ The founder of fascism and originator of the term “totalitarianism,” Benito Mussolini, summed it up: “All through the state, all for the state, nothing against the state, and nothing outside the state.”

Totalitarianism “recognizes the individual only insofar as his interests coincide with those of the State. “Nongovernmental entities, whether formal or informal, had no place.” No individuals or groups, political parties, associations, economic unions, social classes are to exist apart from the state.” It is the exclusion or suppression of autonomous sources of orientation that is the defining characteristic of totalitarianism.”

Paragraph from page 308 explaining how the ideology underlying a totalitarian regime can be both a producer’s and a consumer’s good:

“Ideology is not only instrumental, or a producer’s good, for the government; it is also a consumer good for the populace, or segments thereof. Totalitarian ideology typically features (1) the localization of evil-in Jews, capitalists, or some other group-so that comprehensive political solutions to age-old human problems seem feasible within a reasonable time horizon by surgically removing the offending group, leaving a healthy body politic intact, (2) the localization of wisdom, to explain why this miraculous cure has escaped so many minds for so many centuries, as well as explaining the necessity for superseding democratic institutions and beliefs, (3) a single scale of values by which priorities may be arranged in every field of human endeavor, to be achieved “at all cost,” (4) the presupposition of sufficient knowledge to achieve whatever goal may be projected, (5) the urgency of the “problem” to be “solved” so that ruthlessness is the lesser of two evils, and (6) a psychic identification with millions, whose opinions may nevertheless be disregarded and whose lives may be sacrificed in the cause, without feelings of guilt.

Finally, the totalitarian ideology must be a self-enclosed system, to exclude alternative views and visions which are-regardless of their substance-inherently antithetical to a single totalitarian ideology. It is therefore central to totalitarian ideology that it convert questions of fact into questions of motive. Facts are a threat because they are independent of the ideology, and questioning the motives of whoever reports discordant facts is a low-cost way of disposing of them.”

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Continuing on, page 309, the source quoted by Sowell below shows that there actually is at least one striking similarity between the Nazi movement in Germany, and also subsequent Commie movements in Europe and the MAGA campaign of 2016, namely, it attracted people who had previously been entire apathetic to politics:

“An ideology may be viewed as a knowledge-economizing device, for it explains complex empirical data with a few simple and familiar variables. It is hardly surprising that ideological explanations should have a special appeal to those with higher costs of alternative knowledge-the inexperienced (“youth”) and the previously politically apathetic (“masses”). As a leading student of totalitarianism has observed:

It was characteristic of the rise of the Nazi movement in Germany and of the Communist movements in Europe after 1930 that they recruited their members from this mass of apparently indifferent people whom all other parties had given up as too apathetic or too stupid for their attention.

It is also in keeping with the concept of ideology as a knowledge-economizing device that there should be defections with age as discordant knowledge forces itself on one’s attention, until a point is reached where the cost of reconciling it with the ideological vision exceeds the cost of discarding the vision itself. Explaining complex reality with simple and familiar variables is a low-cost process initially, but this cost tends to rise over: time, as ever more complex relationships must be postulated between the simple variables and the accumulating complex reality-much like the Flat Earth Society explaining away phenomena which have long ago convinced others that the earth is round.

Indeed, when theories are viewed instrumentally, rather than as literal reconstructions of reality, the reason for preferring the round earth theory is basically an intellectual economizing process: the incremental investment in a slightly more complex initial assumption than a flat earth is later repaid by lesser intellectual effort in reconciling the results with empirical observation. It is a question of cost-effectiveness rather than of reaching ultimate, immutable truth. For the initiate in totalitarian ideology, however, cost-effectiveness may lie with the simple assumptions, because authentication is a sequential process in which the full costs will he revealed only in the course of time. He may also be more interested in the power than in the cognitive advantages to be derived from totalitarianism-or may become so oriented in the course of time.”

Still on page 309:

“Ironically, the first book that Marx and Engels wrote together, in 1843, contained a scathing indictment of the practice of first breaking down individual self-respect and personality, and then attempting to reconstruct a human being according to some preconceived plan. The hero of a contemporary novel had made a religious conversion in that way. Marx and Engels pointed out that with his “smooth, honeyed curse” he had first “to soil her in her own eyes” in order to make her receptive to the redemption he would offer. The lofty motives with which this was done were simply camouflage for the zealot’s “lust” for “the self-humiliation of man” Even in a political context, Marx had no use for the idea of state indoctrination.”

From page 321:

“Part of the problem with the argument that freedom has not been impaired by big government is the arbitrarily restrictive definition of “freedom” as those particular freedoms central to the activities of intellectuals as a social class. But the right to be free of government-imposed disabilities in seeking a job or an education are rights of great value, not only to racial or ethnic minorities-as shown by the civil rights movements of the 1 960s-but also to the population at large, as shown in their outraged (but largely futile) reaction to “affirmative action “ and “busing” in the 1970s. Even aside from the question of the substantive merits or demerits of these policies, clearly people perceive their freedom impaired when such vital concerns as their work and their children are controlled by governmental decisions repugnant to, but insulated from, the desires of themselves and the population at large.

This loss of freedom is no less real when others make the case for the merits of the various social policies involved or denounce as immoral the opposition to them. Freedom is precisely the right to behave contrary to the values, desires or beliefs of others. To say that this right can never be absolute is only to say that freedom itself can never be absolute. Much of the loss of freedom with the growth of big government has been concealed because the direct losses have been suffered by intermediary decision-makers-notably businessmen-and it is only after the process has gone on for a long time that it becomes blatantly obvious to the public that an employer’s loss of freedom in choosing whom to hire is the worker’s loss of freedom in getting a job on his merits, that a university’s loss of freedom in selecting faculty or students is their children’s loss of freedom in seeking admission or in seeking the best minds to be taught by.

The passions aroused by these issues go well beyond what would be involved in a simple question of efficiency, as distinguished from freedom. Nor can the passionate opposition be waved aside as mere “racism.” Not only are minorities themselves opposed to quotas and busing: so are others who have fought for racial equality long before it became popular. Nor are racial issues unique in arousing passions. Even such an apparently small issue as mandatory seat belt buzzers created a storm of protest against government encroachment on the freedom of the individual. The quiescence of intellectuals as long as their freedom to write and lecture remained safe may be less an indication of the preeminence of these particular freedoms than of the insularity of intellectuals.”

Sub Section: Crisis

From pages 326–327:

“An enduring concentration of governmental power requires either that the public perception of crisis be deliberately prolonged or that the crisis be used to establish institutions which will outlast the crisis itself.

A deliberately prolonged crisis atmosphere can be managed indefinitely only by a totalitarian state, able to depict itself to its people as threatened on all sides by enemies-and able to exclude contrary interpretations of events. This has in fact been the basic posture of totalitarian states in general. For example, the reiterated theme of “peace,” renunciations of expansionism in general and in particular, and an outright ridicule of foreign fears to the contrary were common to Hitler18 and to Stalin in the 1930s-through the latter annexed even more territory than the former from the beginning of World War II to the Nazi’s invasion of the U.S.S.R.

Even the most aggressive totalitarian state can claim to be threatened by others-and can even cite evidence, since its aggressive military preparations are sure to stimulate at least some military preparedness on the part of other countries. Hitler in the 1930s was perhaps the classic example of this propaganda inversion of cause and effect, though certainly not the last.”

Page 329:

“The link between status ascription and political power is apparent in the “redistribution” of income and other economic benefits. While growing governmental control over the output generated by private activity is often described by its hoped for result as “income redistribution,” statistical data show that the actual “redistribution” of money and power from the public to the government vastly exceeds any “redistribution” from one income class to another. The percentage of the aggregate American income earned by the top fifth, bottom fifth, etc., has remained almost unchanged for decades while governmental powers and welfare state expenditures have expanded tremendously.

There has been “less a redistribution of free income from the richer to the poorer, as we imagined, than a redistribution of power from the individual to the State.” International comparisons show the same result as intertemporal comparisons: “In all the Western nations-the United States, Sweden, the United Kingdom, France, Germany-despite the varieties of social and economic policies of their governments, the distribution “of income is strikingly similar.” What the national differences in “welfare state” policies actually affect is the distribution of money and power between the public and the government.”

Quote about how crime went down in The Great Depression, so it obviously is not caused by poverty, from page 353:

“Antitrust laws, schools busing, rent control, and minimum wage laws, are all based on their consonance with a general vision of the social process, rather than on empirical tests of their positive and negative effects. That crime is caused by poverty and/or discrimination is also part of the same vision, but the empirical evidence is hardly overwhelming, or even unambiguous, since violent crime declined in the 1930s during the greatest depression in history and skyrocketed during the affluent 1960s.

In England, the crime rate rose as unemployment was reduced to the vanishing point. What Earl Warren called “our disturbed society” had a downwardly trending urban murder rate for about twenty years until the 1960s, when it suddenly doubled in less than a decade, as the Warren Court changed the rules of criminal justice.

Sex education in the public schools was another part of the same social vision, and was promoted as a means of reducing teenage pregnancy and venereal disease-but no reconsideration of its wisdom or effectiveness has been made in the light of steep increases in both. The percentage of the public disavowing sex education in the public schools has increased, but among intellectuals there is no such reconsideration in the light of evidence. Public support of the death penalty, which was declining prior to the increase in the murder rate in the 1960s, rose again as the murder rate rose. Again, this suggests a public more responsive to empirical evidence than intellectuals-i.e., less ideological.”

Chapter 22: The Role of Knowledge

Thomas Sowell’s basic outline of what he claimed has been the dominant vision on the American intellectual left since the 1960s around timestamp 41:55 of chapter 22 of masterpiece Knowledge and Decisions:

“1. There is vast unhappiness (social problems) caused by other elites with whom intellectual elites are competing, notably: businessmen, the military, and politicians.

2. Those who are empirically less fortunate (at any given time) are morally and causally victims of those (aforementioned) competing elites; and their salvation lies in more utilization of the services of intellectuals as educators, literally or figuratively, as designers of programs or societies, and as political leaders and decision making surrogates.

3. Articulated rationality, the occupational characteristic of intellectuals, is the best mode of social decision making.

4. Existing knowledge, whether scattered in fragments through society or collected together in traditions (the Constitution, etc.) is inadequate for decision making, so that solving the society’s “problems” depends on the specific fragment of knowledge held (almost exclusively?) by intellectuals.”

The results of various public opinion polls of the American people that Sowell quotes in the latter half of chapter 22 (around timestamp 44:09) of Knowledge and Decisions:

“Among the supposedly embittered and disenchanted (American) youths, 90% describe their past life (so far) as happy. And 93% expect their future life to be so.”

“From 80 to 90% of the supposedly alienated workers (in the United States) with “dehumanizing” jobs say they enjoy their work. Significantly, about half felt that others were dissatisfied with their work. The intellectuals’ outpourings were not (totally) ineffective in matters outside people’s direct experience.”

“More blacks were satisfied than dissatisfied in such areas as work, housing, and education. In contrast to the intellectuals’ preoccupation with “distributive justice” (what today they call “equity”), there were four times more times as many blacks who thought that people with more ability should earn more as there were who believed in even an approximate equality of earnings.”

“As for women’s liberation, fewer women than men were sympathetic to it.”

“For Americans as a whole, only 12% would like to live in another country, less than in Sweden, the Netherlands, Brazil, or Greece, and less than half as many as in West Germany or Great Britain.”

“Among those in foreign countries who would like to live somewhere else, the United States was either the first or second choice in Sweden, West Germany, Greece, Brazil, Finland, and Uruguay.”

“Where the public differs from intellectuals, it is often taken as axiomatic that that demonstrates the misguided ignorance of the public and their need to be educated. However, the supposed alienation of workers, “black rage”, and opinion of women, are subjects on which these respective groups are themselves the experts! Moreover, insofar as there are hard data on such matters, these data almost invariably support public opinion rather than the intellectual vision.

The supposedly “meaningless” civil rights revolution (of the 1960s) saw black family income double in the 1960s while white family income rose only 69% over the same period. Black college enrollment doubled in less than a decade, and the number of black foreman and policeman (in America) more than doubled during the 1960s.”

From pages 357 & 358:

“Behind this questionable cognitive procedure may lie a desire to establish the equality of man and perhaps a sense of “there but for the grace of God go I.” This may be a laudable objective as a counterpoise to the egoistic ideology of individual or group “merit.” But both approaches confuse causation with morality. If individual A has characteristic X, and individual B does not, then it is important for both to know whether X is an advantage or a disadvantage, even if neither “deserves” it and even if both are completely creatures of circumstances beyond their control as regards that characteristic. Nothing is gained by pretending that it doesn’t matter when it does, or by leaving it out of account in explaining differences between them. That only opens the way to concocting mythical reasons for their differences.

The victimhood axiom is based on little more than a minute scrutiny of rival elites and a reporting of their numerous sins and shortcomings-such as could be found in equally close scrutiny of any other group of human beings-elite or otherwise. That multinational corporations have cheated here and bribed there is neither startling as information nor a causal explanation of Third World poverty, however morally deplorable or legally actionable it may be. If prosperity could come only from the united efforts of upright and noble-minded people, all of mankind would still be sunk in poverty. It is always true, at least in the short run, that those poorly fed would be better fed if the well-fed shared some of their food. That is wholly different from saying that people are starving in India because overfed Americans somehow took their food.

The dissonance between the intellectual vision and the experience and opinions of the public has led to a new phenomenon in recent years, sometimes called “totalitarian democracy. “Whereas in earlier times-the New Deal era, for example-the “intelligentsia saw The People as its ally in the struggle for power,” and “a plebiscitary interpretation of democracy” was considered a hallmark of liberalism, they now see public opinion and democratic processes as obstacles to be overcome.

While intellectuals still speak in the name of The People and espouse democratic ideals, “their ceaseless strategy is inconsistent with their professed thought.” Such strategy features “rules that minimize majority participation, thereby permitting a small faction to gain control.”

Whether within political party caucuses, environmental agencies, or other social decision-making institutions, complex rules and tiresome procedures are sorting devices that ensure the differential survival of intellectuals in decision-making processes. These procedures are, in effect, “the poll tax that the New Elite has been imposing on everyone else.” Recourse to courts and administrative agencies as the preferred mechanisms of decision making also favors the chances of intellectuals in imposing their vision on the rest of society.

As a leader in the fight for eliminating capital punishment observed, there was “an unmistakable preference for the courts,” because reform through democratic legislation requires either “public consensus or a powerful minority lobby,” as contrasted with the greater ease of attempts to “market new constitutional protections to judges.”

A bow toward democracy is made with claims that the newly created “constitutional” rights are “a response to deeply rooted social conflicts that elected representatives have not addressed “because” the interests that the Court protected could not mobilize sufficient power,” but these vague references to “deeply rooted social conflicts” and “power” boil down to the simple fact that a majority of the public-indeed, “a twenty-year high”­ supported the death penalty in the midst of the intellectuals’ crusade to abolish it.

Appeals to a higher moral code-of which they are axiomatically the keepers-not only justifies the superseding of the democratic will or the constitutional processes, but justifies calling it “democracy,” for it is what the people would want, if only they knew better, if only they shared the intellectuals’ vision. This approach has been aptly called “totalitarian democracy.” Sometimes the moral superiority of intellectuals is put even more bluntly, as in the assertion that “a more equal society is a better society even if its citizens prefer inequality.”’

Quote from page 360 claiming that Czarist Russia had one of the highest economic growth rates in Europe:

“Sometimes this transmuting of notions into “facts” includes an exaggeration of the advancement of foreign totalitarians rather than a denigration of that of democratic nations. For example, the supposed economic triumphs of the Bolsheviks are often based on the belief that czarist Russia had advanced unusually slowly, when in fact it had become one of the fastest growing economies in Europe.”

Quote from page 360 where the specific way in which Thomas Sowell describes and critiques intellectuals sounds eerily similar to how Nassim Taleb often does in his books:

“Articulated rationality as a process and the delegation of decision making to “experts” have become the central features of the intellectuals’ vision of political and social decision making. Where there is no compellingly articulated rationality, then there is irrationality (from this viewpoint).”

From pages 360–362:

‘Perhaps the most important policy question is not how or why intellectuals have sought power but how and why others have granted them as much power and influence as they have. It has seldom been because of any demonstrated success. Crime rates have soared as the theories of criminologists were put into practice; educational test scores have plummeted as new educational theories were tried. Indeed, no small part of the intellectuals’ achievement has been in keeping empirical verification processes off the agenda.

Moreover, those who are more essentially intellectual in occupation-primarily producers of ideas-have been both more avid and more favored in power terms than those who produce tangible benefits in verifiable form. It is not the agronomists, physicians, or engineers who have risen to power, but the sociologists, psychologists, and legal theorists. It is the latter groups who have transformed the political and social landscape of the United States and much of the Western world.

Not only is much of their cognitive output inherently unverifiable empirically; they have by various definitions and axiomatic procedures made their output even less susceptible of authentication than it would be otherwise. The jargon alone in these fields makes their substance largely inaccessible to outsiders. Transitionism explains away all disastrous consequences as the short-run price for a long-run triumph. They have conquered by faith rather than works. This is hardly surprising in the light of similar achievements by religious intellectuals who preceded them by centuries. Whatever has made human beings eager to hear those who claim to know the future has worked for modern as well as ancient intellectuals.

The modern equivalent of the ancient seer to whom men submitted their credulity is the “expert.” Deference to “experts” generally does not depend upon any consideration of ( 1) whether there is in fact any expertise on the particular issue (often there is not, especially in the social sciences), (2) whether the individuals selected have in fact any such expertise, as contrasted with an assortment of miscellaneous information, or (3) whether those who have expertise are in fact applying it, as distinguished from using it as a means of imposing personal preferences or group fashions.

Politicians may also take issues to “experts” as a means of escaping political responsibility for unpredictable or controversial outcomes. Finally, there are “experts” whose expertise consists largely of detailed knowledge of some particular governmental program, whose institutional complexities and jargon make them incomprehensible to others.

The enormous investment of time and effort required to acquire familiarity with intricate regulations and labyrinthine administrative procedures is unlikely to be made by someone unsympathetic to a program, both because the philosophic or cognitive interest would not be sufficient and because such an investment offers large payoffs only to those whom the particular bureaucracy would employ as consultants or officials, obviously not those unsympathetic to its programs. Even among “experts” in institutional detail who are unaffiliated with the program, their expertise has value only so long as the program itself exists.

They would become experts in nothing if the programs were abolished, and a costly investment on their part would be destroyed. Under this set of incentives and constraints, it may be a truism that “all the experts” favor this or that program, but that may indicate very little about its value to the larger society. “Experts” of this sort can often devastate critics by exposing the latter’s misunderstandings of particular details, terminology, or legal technicalities-none of which may be crucial to the issue but all of which establish politically the superior knowledge of those favoring the program, and enable them to dismiss critics as “misinformed.”’

Ridiculously prescient quote at the end of chapter 22 of Thomas Sowell’s masterpiece Knowledge and Decisions:

“It may be a truism that “all the experts” favor this or that program, but that may indicate very little about its value to the larger society.

“Experts” of this sort can often devastate critics by exposing the latters’ misunderstandings of particular details, terminology, or legal technicalities, none of which may be crucial to the issue, but all of which establish politically the superior knowledge of those favoring the program, and enable them to dismiss critics as (being) “misinformed.”

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“It is not so much the bias of “expert” intellectuals that is crucial, but the difference between their perceived “objective” expertise and the reality which makes the political process vulnerable to their influence. Publicly recognized special interest groups-landlords discussing rent control, oil companies discussing energy, etc.-may have similar incentives and constraints, but are far less effective in getting their social viewpoints accepted as objective truth or social concern.

But when an academic intellectual appears as an “expert” witness before a congressional committee, no one ever asks if he has been a recipient of large research grants or lucrative consulting fees from the very agency whose programs he is about to “objectively” assess in terms of the public interest.

While special interest advertising carries not only that explicit designation but a heavy price tag as well, talk show hosts eagerly welcome “experts” extolling the virtues of this or that program, or raising alarms about the dire consequences of its possible curtailment or extinction. Such experts are then thanked warmly for “taking time out from your busy schedule” to come “inform” the public-i.e. , to get free advertising for their special interest, with an audience in the millions. The print media are equally likely to bill such “experts’” statements as news rather than advertising.”

Quotes from Podcasts or shows about Thomas Sowell

The following quote begins at 15:40 of the episode entitled Systems | Basic Economics 1 of 4 | Dr. Thomas Sowell of the Curiously Disagreeable podcast:

“Economics studies the consequences of decisions that are made about the use of land, labor, and capital, that go into producing the output that determines a country’s standard of living.”

Facts, factoids, quotes, and stats from Intellectuals and Society

Chapter 2 (but it’s called chapter 3 in the audio version of it on my Audible app): Knowledge and Notions

COMPETING CONCEPTS OF KNOWLEDGE

The way the word knowledge is used by many intellectuals often arbitrarily limits what verified information is to be considered knowledge. This arbitrary limitation of the scope of the word was expressed in a parody verse about Benjamin Jowett, master of Balliol College at Oxford University:

My name is Benjamin Jowett.

If it’s knowledge, I know it.

I am the master of this college,

What I don’t know isn’t knowledge.

Someone who is considered to be a “knowledgeable” person usually has a special kind of knowledge — perhaps academic or other kinds of knowledge not widely found in the population at large. Someone who has even more knowledge of more mundane things — plumbing, carpentry, or automobile transmissions, for example — is less likely to be called “knowledgeable” by those intellectuals for whom what they don’t know isn’t knowledge. Although the special kind of knowledge associated with intellectuals is usually valued more, and those who have such knowledge are usually accorded more prestige, it is by no means certain that the kind of knowledge mastered by intellectuals is necessarily more consequential in its effects in the real world.

The same is true even of expert knowledge. No doubt those in charge of the Titanic had far more expertise in the many aspects of seafaring than most ordinary people had, but what was crucial in its consequences was the mundane knowledge of where particular icebergs happened to be located on a particular night (Hayek’s concept of the knowledge of time and place). Many major economic decisions are likewise crucially dependent on the kinds of mundane knowledge that intellectuals might disdain to consider to be knowledge in the sense in which they habitually use the word.

Location is just one of those mundane kinds of knowledge, and its importance is by no means confined to the location of icebergs. For example, the mundane knowledge of what is located at Broadway and 23rd Street in Manhattan, and what the surrounding neighborhood is like, may not be considered relevant to determining whether a given individual should be regarded as a knowledgeable person. But, for a business seeking a place to open a store, that knowledge can be the difference between going bankrupt and making millions of dollars.

Enterprises invest much time and money in determining where to locate their operations, and these locations are by no means random. It is not accidental that filling stations are often located on street corners, and often near other filling stations, just as automobile dealers are often located near other automobile dealers, but stationery stores are seldom located near other stationery stores. People knowledgeable about business have cited, as one of the factors behind the spectacular rise of Starbucks, the Starbucks management’s careful attention to choosing the locations of their outlets — and one of the factors cited in Starbucks having to close hundreds of outlets in 2008 has been their straying from that practice. It is a cliché among realtors that the three most important factors in determining the value of a house are “location, location, and location.”

This Alchian inspired quote begins around 14:25 of chapter 3:

“Ideological fault lines divide those who have different conceptions of the meaning of knowledge, and who consequently see knowledge as being concentrated or dispersed. “In general, ‘the market’ is smarter than the smartest of its individual participants,” is the way the late Robert L. Bartley, editor of the Wall Street Journal, expressed his belief that systemic processes can bring into play more knowledge for decision-making purposes, through the interactions and mutual accommodations of many individuals, than any one of those individuals possesses.

Systemic processes are essentially trial and error processes with repeated or continuous consequential feedback from those involved in these processes. By contrast, political and legal processes are processes in which initial decisions are harder to change, whether (in politics) because of the high cost to political careers of admitting a mistake or in the law, the legal precedents that are set. Why the transfer of decisions from those with personal experience and a stake in the outcome to those with neither can be expected to lead to better decisions is a question seldom asked, much less answered.”

Quote begins around 3:33 of chapter 3:

“City planners, like other experts, are also well aware that their own incomes and careers depend on providing ideas that are saleable to those who employ them, including politicians, whose goals and methods become the experts’ goals and methods. Even where experts go through the formality of weighing costs against benefits, that can remain only a formality in a process where a goal has been chosen politically. For example, after a planning expert was ordered by a politician who wanted a rail system built to “revise rail ridership estimates upward and costs downward,” later cost overruns and revenue shortfalls became a public scandal. But the politician was able to say: “It’s not my fault; I relied on forecasts made by our staff, and they seem to have made a big mistake.”

In other words, experts are often called in, not to provide factual information or dispassionate analysis for the purpose of decision-making by responsible officials, but to give political cover for decisions already made and based on other considerations entirely. The shifting of socially consequential decisions from systemic processes, involving millions of people making mutual accommodations — at their own costs and risks — to experts imposing a master plan on all would be problematic even if the experts were free to render their own best judgment. In situations where experts are simply part of the window dressing concealing arbitrary and even corrupt decisions by others, reliance on what “all the experts” say about a given issue is extremely risky. Even where the experts are untrammeled, what “all the experts” are most likely to agree on is the need for using expertise to deal with problems.”

Sub Section Reason and Justification

Quote begins around 38:17 of chapter 3

“To demand that things justify themselves before the bar of reason, in a world where no one has even one percent of all consequential knowledge, is to demand that ignorance be convinced and its permission obtained. How can a brain surgeon justify what he does to someone who knows nothing about the brain or about surgery? How can a carpenter justify his choice of nails and woods to people who know nothing about carpentry, especially if the carpenter is being accused of wrongdoing by lawyers or politicians, whose articulation skills may greatly exceed those of the carpenter, while their knowledge of carpentry is far less?

The confidence born of their generally superior special knowledge may conceal from these elites themselves the extent of their ignorance and their resulting misconception of the issue at hand. Moreover, arguments against the carpenter by articulate but ignorant elites to a general public that is equally ignorant on this subject — whether the public are on juries or in election booths — may easily prove to be convincing, even if those same arguments would seem absurd to other carpenters.”

Sub Section “One Day at a Time” Rationalism

Quote begins around 45:01 or 45:15 of chapter 3

“Intellectuals’ faith in “reason” sometimes takes the form of believing themselves capable of deciding each issue ad hoc as it arises. In principle, reason can be applied to as limited or as expansive a time period as one wishes — a day, a year, a generation, or a century, for example — by analyzing the implications of decisions over whatever span of time may be chosen. One-day-at-a-time rationalism risks restricting its analysis to the immediate implications of each issue as it arises, missing wider implications of a decision that may have merit as regards the issue immediately at hand, considered in isolation, but which can be disastrous in terms of the ignored longer-term repercussions.”

Chapter 4 : Intellectuals and Economics

CHAOS VERSUS COMPETITION

Another Alchian influenced passage:

“Among the other unsubstantiated notions about economics common among the intelligentsia is that there would be chaos in the economy without government planning or control. The order created by a deliberately controlled process may be far easier to conceive or understand than an order emerging from an uncontrolled set of innumerable interactions. But that does not mean that the former is necessarily more common, more consequential or more desirable in its consequences.

Neither chaos nor randomness is implicit in uncontrolled circumstances. In a virgin forest, the flora and fauna are not distributed randomly or chaotically. Vegetation growing on a mountainside differs systematically at different heights. Certain trees grow more abundantly at lower elevations and other kinds of trees at higher elevations. Above some altitude no trees at all grow and, at the summit of Everest, no vegetation at all grows. Obviously, none of this is a result of any decisions made by the vegetation, but depends on variations in surrounding circumstances, such as temperature and soil. It is a systemically determined outcome with a pattern, not chaos.

Animal life also varies with environmental differences and, while animals like humans (and unlike vegetation) have thought and volition, that thought and volition are not always the decisive factors in the outcomes. That fish live in the water and birds in the air, rather than vice versa, is not strictly a matter of their choices, though each has choices of behavior within their respective environments. Moreover, what kinds of choices of behavior will survive the competition that weeds out some kinds of responses to the environment and lets others continue is likewise not wholly a matter of volition. In short, between individual volition and general outcomes are systemic factors which limit or determine what will survive, creating a pattern, rather than chaos.

None of this is difficult to understand in the natural environment. But the difference between individual, volitional causation and constraining systemic causation is one seldom considered by intellectuals when discussing economies, unless they happen to be economists. Yet that distinction has been commonplace among economists for more than two centuries. Nor has this been simply a matter of opinion or ideology. Systemic analysis was as common in Karl Marx’s Capital as in Adam Smith’s The Wealth of Nations, and it existed in the eighteenth century school of French economists called the Physiocrats before either Marx or Smith wrote about economics.

Even the analogy between systemic order in nature and in an economy was suggested by the title of one of the Physiocratic writings of the eighteenth century, L’Ordre Naturel by Mercier de la Rivière. It was the Physiocrats who coined the phrase laissez-faire, later associated with Adam Smith, based on their conviction that an uncontrolled economy was not one of chaos but of order, emerging from systemic interactions among the people competing with, and accommodating to, one another.”

Quote from page 55 where Sowell quotes Engels savaging the lunacy of price controls:

“For the individual manufacturer, the point at which it would no longer be profitable to use more of some factor of production — machinery, labor, land, etc. — is indeed the point which provides the limit of that manufacturer’s output, even when it would be physically possible to produce more. But, while profitability and unprofitability convey that limit, they are not what cause that limit — which is due to the scarcity of resources inherent in any economic system, whether or not it is a profit-based system. Producing more of a given output in disregard of those limits does not make an economy more prosperous.

On the contrary, it means producing an excess of one output at the cost of a shortage of another output that could have been produced with the same resources. This was a painfully common situation in the government-run economy of the Soviet Union, where unsold goods often piled up in warehouses while dire shortages had people waiting in long lines for other goods.”

Ironically, Marx and Engels had foreseen the economic consequences of fiat prices created by government, rather than by supply and demand, long before the founding of the Soviet Union, even though the Soviets claimed to be following Marxian principles. When publishing a later edition of Marx’s 1847 book, The Poverty of Philosophy, in which Marx rejected fiat pricing, Engels spelled out the problem in his editor’s introduction.

He pointed out that it is price fluctuations which have “forcibly brought home to the individual commodity producers what things and what quantity of them society requires or does not require.” Without such a mechanism, he demanded to know “what guarantee we have that necessary quantity and not more of each product will be produced, that we shall not go hungry in regard to corn and meat while we are choked in beet sugar and drowned in potato spirit, that we shall not lack trousers to cover our nakedness while trouser buttons flood us in millions.”

On this point, the difference between Marx and Engels, on the one hand, and many other intellectuals of the left on the other, was simply that Marx and Engels had studied economics and the others usually had not. John Dewey, for example, demanded that “production for profit be subordinated to production for use.”

Since nothing can be sold for a profit unless some buyer has a use for it, what Dewey’s proposition amounts to is that third-party surrogates would define which use must be subordinated to which other use, instead of having such results be determined systemically by millions of individuals making their own mutual accommodations in market transactions.”

Sub Section called Empirical Evidence

“Given the vast amounts of statistical data on income available from the Census Bureau, the Internal Revenue Service and innumerable research institutes and projects, one might imagine that the bare facts about variations in income would be fairly well known by informed people, even though they might have differing opinions as to the desirability of those particular variations.

In reality, however, the most fundamental facts are in dispute, and variations in what are claimed to be facts seem to be at least as great as variations in incomes. Both the magnitude of income variations and the trends in these variations over time are seen in radically different terms by those with different visions as regards the current reality, even aside from what different people may regard as desirable for the future.

Perhaps the most fertile source of misunderstandings about incomes has been the widespread practice of confusing statistical categories with flesh-and-blood human beings. Many statements have been made in the media and in academia, claiming that the rich are gaining not only larger incomes but a growing share of all incomes, widening the income gap between people at the top and those at the bottom. Almost invariably these statements are based on confusing what has been happening over time in statistical categories with what has been happening over time with actual flesh-and-blood people.

A New York Times editorial, for example, declared that “the gap between rich and poor has widened in America.” Similar conclusions appeared in a 2007 Newsweek article which referred to this era as “a time when the gap is growing between the rich and the poor — and the super rich and the merely rich,” a theme common in such other well-known media outlets as the Washington Post and innumerable television programs. “The rich have seen far greater income gains than have the poor,” according to Washington Post columnist Eugene Robinson. A writer in the Los Angeles Times likewise declared, “the gap between rich and poor is growing.”

E.J. Dionne of the Washington Post described “the wealthy” as “people who have made almost all the income gains in recent years” and added that they are “undertaxed.” Similar statements have been made by academics. According to Professor Peter Corning of Stanford University, in his book The Fair Society, “the income gap between the richest and the poorest members of our society has been growing rapidly.”

Professor Andrew Hacker of Queens College likewise declared in his book Money: “While all segments of the population enjoyed an increase in income, the top fifth did twenty-four times better than the bottom fifth. And measured by their shares of the aggregate, not just the bottom fifth but the three above it all ended up losing ground.

Although such discussions have been phrased in terms of people, the actual empirical evidence cited has been about what is happening over time to (abstract) statistical categories, and that turns out to be the direct opposite of what happens to flesh and blood human beings, most of whom move from one statistical category (income quintile usually) over time. In terms of statistical categories, it is indeed true that the amount of income and the proportion of all income received by those in the top 20% bracket have risen over the years, widening the gap between the top and bottom quintiles.

But U.S. Treasury Department data following specific individuals over time from their tax returns to the Internal Revenue Service, show that in terms of people the incomes of those particular taxpayers who were in the bottom 20 percent in income in 1996 rose 91 percent by 2005, while the incomes of those particular taxpayers who were in the top 20 percent in 1996 rose by only 10 percent by 2005 — and the incomes of those in the top 5 percent and top one percent actually declined.

While it might seem as if both these radically different sets of statistics cannot be true at the same time, what makes them mutually compatible is that flesh-and-blood human beings move from one statistical category to another over time. When those taxpayers who were initially in the lowest income bracket had their incomes nearly double in a decade, that moved many of them up and out of the bottom quintile — and when those in the top one percent had their incomes cut by about one-fourth, that may well have dropped many, if not most, of them out of the top one percent. Internal Revenue Service data can follow particular individuals over time from their tax returns, which have individual Social Security numbers as identification, while data from the Census Bureau and most other sources follow what happens to statistical categories over time, even though it is not the same individuals in the same categories over the years.

Many of the same kinds of data used to claim a widening income gap between “the rich” and “the poor” — names usually given to people with different incomes, rather than different amounts of wealth, as the terms rich and poor might seem to imply — have led many in the media to likewise claim a growing income gap between the “super-rich” and the “merely rich.”

Under the headline “Richest Are Leaving Even the Rich Far Behind,” a front-page New York Times article dubbed the “top 0.1 percent of income earners — the top one-thousandth” as the “hyper-rich” and declared that they “have even left behind people making hundreds of thousands of dollars a year.” Once again, the confusion is between what is happening to statistical categories over time and what is happening to flesh-and-blood individuals over time, as they move from one statistical category to another.

Despite the rise in the income of the top 0.1 percent of taxpayers as a statistical category, both absolutely and relative to the incomes in other categories, as flesh-and-blood human beings those individuals who were in that category initially had their incomes actually fall by a whopping 50 percent between 1996 and 2005. It is hardly surprising when people whose incomes are cut in half drop out of the top 0.1 percent. What happens to the income of the category over time is not the same as what happens to the people who were in that category at any given point in time. But many among the intelligentsia are ready to seize upon any numbers that seem to fit their vision.”

Earth shaking passage about how markets reward productivity, not merit, and thus how market economies are productocracies, not meritocracies starts around 20:45:

“The fact that one person’s productivity may be a thousand times as valuable as another’s does not mean that one person’s merit is a thousand times as great as another’s. productivity and merit are very different things, though the two things are often confused with one another. Moreover, an individual’s productivity is affected by innumerable factors besides the efforts of that individual — being born with a great voice being an obvious example. Being raised in a particular home with a particular set of values and behavior patterns, living in a particular geographic or social environment, merely being born with a normal brain, rather than a brain damaged during the birth process, can make enormous differences in what a given person is capable of producing.

More fundamentally, third parties are in no position to second-guess the felt value of someone’s productivity to someone else, and it is hard even to conceive how someone’s merit could be judged accurately by another human being who “never walked in his shoes.” An individual raised in terrible home conditions or terrible social conditions may be laudable for having become an average, decent citizen with average work skills as a shoe repairer, while someone raised from birth with every advantage that money and social position can confer may be no more laudable for becoming an eminent brain surgeon. But that is wholly different from saying that repairing shoes is just as valuable to others as being able to repair maladies of the brain.

To say that merit may be the same is not to say that productivity is the same. Nor can we logically or morally ignore the discrepancy in the relative urgency of those who want their shoes repaired versus those in need of brain surgery. In other words, it is not a question of simply weighing the interest of one income recipient versus the interest of another income recipient, while ignoring the vastly larger number of other people whose well-being depends on what these individuals produce.”

Amazing quote from the end of chapter 4 (page 60) about the difference between the types of feedback for government decisions vs private decisions:

“Despite whatever vision may be conjured up by euphemisms, government is not some abstract embodiment of public opinion or Rousseau’s “general will.” Government consists of politicians, bureaucrats, and judges — all of whom have their own incentives and constraints, and none of whom can be presumed to be any less interested in the promotion of their own interests or notions than are people who buy and sell in the marketplace. Neither sainthood nor infallibility is common in either venue.

The fundamental difference between decision-makers in the market and decision-makers in government is that the former are subject to continuous and consequential feedback which can force them to adjust to what others prefer and are willing to pay for, while those who make decisions in the political arena face no such inescapable feedback to force them to adjust to the reality of other people’s desires and preferences.

A business with red ink on the bottom line knows that this cannot continue indefinitely, and that they have no choice but to change whatever they are doing that produces red ink, for which there is little tolerance even in the short run, and which will be fatal to the whole enterprise in the long run. In short, financial losses are not merely informational feedback but consequential feedback which cannot be ignored, dismissed or spun rhetorically through verbal virtuosity.

In the political arena, however, only the most immediate and most attention-getting disasters so obvious and unmistakable to the voting public that there is no problem of “connecting the dots” are comparably consequential for political decision-makers. But laws and policies whose consequences take time to unfold are by no means as consequential for those who created those laws and policies, especially if the consequences emerge after the next election.

Moreover, there are few things in politics as unmistakable in its implications as red ink on the bottom line is in business. In politics, no matter how disastrous a policy may turn out to be, if the causes of the disaster are not understood by the voting public, those officials responsible for the disaster may escape any accountability, and of course they have every incentive to deny having made mistakes, since admitting mistakes can jeopardize a whole career.

Why the transfer of economic decisions from the individuals and organizations directly involved — often depicted collectively and impersonally as “the market” — to third parties who pay no price for being wrong should be expected to produce better results for society at large is a question seldom asked, much less answered. Partly this is because of rhetorical packaging by those with verbal virtuosity. To say, as John Dewey did, that there must be “social control of economic forces” sounds good in a vague sort of way, until that is translated into specifics as the holders of political power forbidding voluntary transactions among the citizenry.”

Chapter 5: Government and the Economy

Sub Section Business “Power” or “Control”

Quote about how nonsensically intellectuals often use the word control when talking about a company or group controlling a market begins around 19:00 of chapter 5:

“One of the many signs of verbal virtuosity among intellectuals is the repackaging of words to mean things that are not only different from, but sometimes the direct opposite of, their original meanings or the meaning that most other people attach to those words. “Freedom” and “power” are among the most common of these repackaged words. The basic concept of freedom as not being subjected to other people’s restrictions, and of power as the ability to restrict other people’s options, have both been stood on their heads in some of the repackaging of these words by intellectuals discussing economic issues.

Thus, business enterprises which expand the public’s options, either quantitatively (through lower prices) or qualitatively (through better products), are often spoken of as ‘controlling’ the market, whenever this results in a high percentage of consumers choosing to purchase their particular products rather than the competing products of other enterprises.

In other words, when consumers decide that particular brands of products are either cheaper or better than competing brands of those products, third parties take it upon themselves to depict those who produced these particular brands as having exercised “power” or “control.” If, at a given time, three-quarters of the consumers prefer to buy the Acme brand of widgets to any other brand, then Acme Inc. will be said to “control” three-quarters of the market, even though consumers control 100 percent of the market, since they can switch to another brand of widgets tomorrow if someone else comes up with a better widget, or stop buying widgets altogether if a new product comes along that makes widgets obsolete.

Any number of companies that have been said to “control” a majority of their market have not only lost that market share but have gone bankrupt within a few years of their supposed dominance of the market. Smith Corona, for example, sold over half the typewriters and word processors in the United States in 1989 but, just six years later, it filed for bankruptcy, as the spread of personal computers displaced both typewriters and word processors.

Yet the verbal packaging of sales statistics ex post as market “control” ex ante has been common, not only in the writings of the intelligentsia but even in courts of law in antitrust cases. Even at its peak, Smith Corona controlled nothing. Every consumer was free to buy any other brand of typewriter or word processor, or refrain from buying any.

The verbal packaging of consumer choice as business “control” has become so widespread that few people seem to feel a need to do anything so basic as thinking about the meaning of the words they are using, which transform an ex post statistic into an ex ante condition. By saying that businesses have “power” because they have “control” of their markets, this verbal virtuosity opens the way to saying that government needs to exercise its “countervailing power” (John Kenneth Galbraith’s phrase) in order to protect the public.

Despite the verbal parallels, government power is in fact power, since individuals do not have a free choice as to whether or not to obey government laws and regulations, while consumers are free to ignore the products marketed by even the biggest and supposedly most “powerful” corporations in the world. There are people who have never set foot in a Wal-Mart store and there is nothing that Wal-Mart can do about it, despite being the world’s largest retailer.

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Continued:

One of John Kenneth Galbraith’s earliest and most influential books, American Capitalism: The Concept of Countervailing Power, declared that “power on one side of a market creates both the need for, and the prospect of reward to, the exercise of countervailing power from the other side.” Thus, according to Professor Galbraith, the rise of big corporations gave them an oppressive power over their employees, which led to the creation of labor unions in self-defense. As a matter of historical fact, however, it was not in large, mass-production industries that American labor unions began but in industries with numerous smaller businesses, such as construction, trucking and coal mining — all of which were unionized years before the steel or automobile industries.

But, whatever the genesis of union power, the crucial countervailing power for Galbraith was that of the government, both in support of private countervailing power with such legislation as the National Labor Relations Act of 1935 and legislation to help coal producers and others supposedly oppressed by the “power” of big business. Such government “countervailing power performs a valuable — indeed an indispensable — regulatory function in the modern economy,” according to Galbraith. But this formulation depends crucially on redefining “power” to include its opposite — the expansion of consumer options by businesses, in order to increase sales.

John Kenneth Galbraith was perhaps the most prominent, and certainly one of the most verbally gifted, of the advocates of a theory of volitional pricing. According to Professor Galbraith, the output of a given industry tends to become more concentrated over time in the hands of a few producers, who acquire decisive advantages that make it difficult for a new company without the same amount of experience to enter the industry and compete effectively against the leading incumbents.

Therefore, according to Galbraith, “sellers have gained authority over prices,” which are “tacitly administered by a few large firms.” In reality, one of the most common reasons for buyers buying disproportionately from a particular seller is that this seller has a lower price. After Galbraith has redefined power as a concentration of sales and of resulting profits and size, he is able to depict that “power” of the seller as a reason why that seller can now set prices different from — and implicitly higher than — those of a competitive market.

In this formulation, “the size of the corporation which the individual heads is again a rough index of the power the individual exercises.” However plausible all this might seem, Galbraith did not venture very far in the direction of empirical verification. The insinuation of Galbraith’s — and many others’ — discussions of the “power” of big business is that the growth of ever larger businesses means the growth of their power to raise prices.

This insinuation — as distinguished from either a demonstrated fact or even a testable hypothesis — was a staple among the intelligentsia long before Galbraith’s time, and provided the impetus for the Sherman Antitrust Act of 1890, among other attempts to contain the “power” of big business. In reality, the era leading up to the Sherman Act was not an era of rising prices imposed by monopolies, even though it was an era of growing sizes of businesses in many industries, often through consolidation of smaller businesses into giant corporations.

Far from leading to higher prices, however, this was an era of falling prices charged by these larger businesses, whose size created economies of scale, which meant lower production costs that enabled them to profit from lower prices, thereby expanding their sales. Crude oil, which sold for $12 to $16 a barrel in 1860, sold for less than one dollar a barrel in every year from 1879 to 1900. Railroad freight costs fell by 1887 to 54 percent of what they had been in 1873. The price of steel rails fell from $68 in 1880 to $32 in 1890. The prices of sugar, lead, and zinc all fell during this period.”

Chapter 8: Arguments Without Arguments

“Statistical data can also be filtered, whether by omitting data that go counter to the desired conclusion (such as data on Asian Americans) or by restricting the release of data to only those researchers whose position on the issue at hand is in accord with that of those who control the data. For example, a statistically based study by former college presidents William Bowen and Derek Bok was widely hailed for its conclusions supporting affirmative action in college admissions.

But when Harvard Professor Stephan Thernstrom, whose views on affirmative action did not coincide with theirs, sought to get the raw data on which the study’s conclusions were based, he was refused. Similarly, when UCLA professor of law Richard Sander sought to test competing theories about the effect of affirmative action in law schools by getting data on bar examination pass rates by race in California, supporters of affirmative action threatened to sue if the state bar released such data — and the state bar then refused to release the data.

In these and other cases, statistics are filtered at the source, even when these are taxpayer-financed statistics, collected for the ostensible purpose of providing facts on which informed policy choices can be made, but in practice treated as if their purpose is to protect the prevailing vision.”

Sowell demonstrating a good data analysis thinking process:

“It has, for example, been repeated endlessly in the media and in academia that Britain and various other countries with stronger gun control laws than those in the United States have murder rates that are only a fraction of the murder rate in the United States — the clear implication being that it is the gun control which accounts for the difference in murder rates. Having reached this conclusion, most of the intelligentsia have seen no reason to proceed further. But a serious attempt to test the hypothesis of an inverse relationship between restricted gun ownership and the murder rate would make other comparisons and other breakdowns of statistical data necessary. For example:

1. Since we know that murder rates are lower in some countries with stronger gun control laws than in the United States, are there other countries with stronger gun control laws than the United States that have higher murder rates?

2. Are there countries with widespread gun ownership which have lower murder rates than some other countries with lower gun ownership rates?

3. Did the murder rate differential between the United States and Britain originate with the onset of gun control laws?

Those who were content to stop when they found the kinds of statistics they were looking for were unlikely to ask such questions. The answers to these three questions, incidentally, are yes; yes; and no.

As for Question 1, Russia and Brazil have tougher gun control laws than the United States and much higher murder rates.

As for Question 2, Gun ownership rates in Mexico are a fraction of what they are in the United States, but Mexico’s murder rate is more than double that in the United States. Handguns are banned in Luxembourg but not in Belgium, France or Germany; yet the murder rate in Luxembourg is several times the murder rate in Belgium, France or Germany.

As for Britain’s lower murder rate than that in the United States, history undermines the notion that gun control laws explain the difference. New York City has had a murder rate some multiple of the murder rate in London for more than two centuries — and for most of those two centuries neither place had serious restrictions on acquiring firearms. At the beginning of the twentieth century, anyone in England “could buy any type of gun, no questions asked.” Murders committed without guns have also been several times as high in New York as in London.

Within England, eras of increasing ownership of guns have not been eras of increasing murder rates, nor have eras of reduced gun ownership been eras of reduced murder rates. A scholarly history of guns in England concluded: “Firearms first entered general circulation and then became commonplace during the sixteenth and seventeenth centuries. This was the same time that homicides and other violent crimes decreased dramatically.” This decline continued in the eighteenth century, when “firearms had largely replaced traditional weapons.” In the nineteenth century, “violent crime reached a record low.” This was the situation in the early 1890s:

In the course of three years, according to hospital reports, there were only 59 fatalities from handguns in a population of nearly 30 million people. Of these, 19 were accidents, 35 were suicides, and only 3 were homicides — an average of one a year.

By contrast, in later years, especially after the Second World War, Britain began severely tightening up its gun control laws. As it did so, the murder rate rose. By 1963, the murder rate was nearly double what it had been at the beginning of the twentieth century. Nevertheless, the fact that the murder rate in England is lower than that in the United States continues to be cited as proof that gun control laws reduce the murder rate.

Considering how many intellectuals have not only supported existing gun control laws, but have actively promoted more and stronger gun control laws, it can hardly be supposed that all these highly educated and very brainy people were incapable of performing very straightforward tests of the hypothesis of an inverse correlation between gun control and murder rates. Nor need we suppose that they knew better and were deliberately lying. What seems more likely is that, once they found statistics to support their preconception, they had no incentive to go any further.”

Chapter 11: Subjective Truth

Socially constructed or socially evolved?

“The seeming sophistication of the notion that all reality is “socially constructed” has a superficial plausibility but it ignores the various validation processes which test those constructions. Much of what is said to be socially “constructed” has been in fact socially evolved over the generations and socially validated by experience. Much of what many among the intelligentsia propose to replace it with is in fact constructed — that is, created deliberately at a given time and place — and with no validation beyond the consensus of like-minded peers. If facts, logic, and scientific procedures are all just arbitrary “socially constructed” notions, then all that is left is consensus — more specifically peer consensus, the kind of consensus that matters to adolescents or to many among the intelligentsia.”

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Continued… part with the hilarious evisceration of the usual implications drawn from the claim that something is socially constructed:

“In a very limited sense, reality is indeed constructed by human beings. Even the world that we see around us is ultimately constructed inside our brains from two very small patches of light falling on our retinas. Like images seen in the back of a view camera, the image of the world in the back of our eyes is upside down. Our brain turns it right side up and reconciles the differences between the image in one eye with the image in the other eye by perceiving the world as three-dimensional.

Bats do not perceive the world in the same way humans do because they rely on signals sent out like sonar and bounced back. Some creatures in the sea perceive through electrical fields that their bodies generate and receive. While the worlds perceived by different creatures through different mechanisms obviously differ from one another, these perceptions are not just free-floating notions, but are subjected to validation processes on which matters as serious as life and death depend.

The specific image of a lion that you see in a cage may be a construct inside your brain, but entering that cage will quickly and catastrophically demonstrate that there is a reality beyond the control of your brain. Bats do not fly into brick walls during their nocturnal flights because the very different reality constructed within their brains is likewise subject to validation by experience in a world that exists outside their brains. Indeed, bats do not fly into plate glass windows, as birds sometimes do when relying on sight — indicating both differences in perception systems and the existence of a reality independent of those perception systems.”

Chapter 13: Law and “Results”

The best concise definition of property rights I have ever come across:

“Property rights are legal barriers to politicians, judges or bureaucrats arbitrarily seizing the assets of some human beings to transfer those assets to other human beings.”

CRIME

I labeled this clip on the Audible version of this book “Holy shit, what?!?!” and I still can’t think of a better description for it now:

“Like so many ideas in vogue among the intelligentsia, the zeal for gun control laws has defied years of mounting evidence of the futility and counterproductive consequences of such laws. For example, a scholarly study in 2001 found that “the use of handguns in crime rose by 40 per cent in the two years after such weapons were banned in the UK.”

An earlier study found: “In homicide involving organized crime and drugs no legally-owned firearms were used at all, but forty-three illegal ones were.” Other studies likewise indicated that, in England as in the United States, laws against owning guns had no discernible effect on people who make their livings by breaking laws:

In 1954 there were only twelve cases of robbery in London in which a firearm was used, and on closer inspection eight of these were only “supposed firearms.” But armed robberies in London rose from 4 in 1954, when there were no controls on shotguns and double the number of licensed pistol owners, to 1,400 in 1981 and to 1,600 in 1991. In 1998, a year after a ban on virtually all handguns, gun crime was up another 10 percent.

As gun control laws were made ever tighter in Britain toward the end of the twentieth century, murder rates rose by 34 percent, while murder rates in Canada and the United States were falling by 34 percent and 39 percent, respectively. Murder rates in France and Italy were also falling, by 25 percent and 59 percent, respectively.

Britain, with its strong anti-gun ideology among the intellectual and political elites, was an exception to international trends. Meanwhile, Americans’ purchases of guns increased during this same period, gun sales surging “to a peak in 1993 of nearly 8 million small arms, of which 4 million were handguns. Far from leading to more murders, this was a period of declining murder rates in the United States. Altogether, there were an estimated 200 million guns in the United States, and rates of violent crime have been lowest in those places where there have been the highest incidence of gun ownership. The same has been true of Switzerland.

Yet none of this has caused second thoughts about gun control among either the American or British intelligentsia. In Britain, both ideology and government policy have taken a negative view of other measures of self-defense as well. Opposition to individual self-defense by law-abiding citizens extends even beyond guns or imitation guns. A middle-aged man attacked by two thugs in a London subway car “unsheathed a sword blade in his walking stick and slashed at one of them” — and was arrested along with his assailants, for carrying an offensive weapon. Even putting up barbed wire around a garden and its shed that had been broken into several times was forbidden by local authorities, fearful of being sued if a thief injured himself while trying to break in.

That such a lawsuit would be taken seriously is another sign of the prevailing notions among British officials, operating in a climate of opinion created by the British intelligentsia. The “root causes” theory of crime has likewise remained impervious to evidence on both sides of the Atlantic. In both the United States and England, crime rates soared during years when the supposed “root causes of crime” — poverty and barriers to opportunity — were visibly lessening.

As if to make a complete mockery of the “root causes” theory, the ghetto riots that swept across American cities in the 1960s were less common in Southern cities, where racial discrimination was still most visible, and the most lethal riot of that era occurred in Detroit, where the poverty rate among blacks was only half that of blacks nationwide, while the homeownership rate among blacks was higher than among blacks in any other city, and the black unemployment rate in Detroit was 3.4 percent, which was lower than the unemployment rate among whites nationwide.

Urban riots were most numerous during the administration of President Lyndon Johnson, which was marked by landmark civil rights legislation and a massive expansion of social programs called “the war on poverty.” Conversely, such riots became virtually non-existent during the eight years of the Reagan administration, which de-emphasized such things.”

Chapter 14: The World Wars

Sub Section America at War

Before the war was over, Wilson was publicly demanding “the destruction of every arbitrary power anywhere that can separately, secretly and of its single choice disturb the peace of the world.” This was not just idle rhetoric. Wilson sent a note to Germany demanding that Kaiser Wilhelm abdicate.

Like many other intellectuals, Wilson depicted actions taken without material motives to be somehow on a higher moral plane than actions taken to advance the economic interests of individuals or the territorial interests of nation — as if sacrificing countless lives to enable the anointed to play a historic role on the world stage in furthering their vision was not at least as selfish and calloused as seeking material ends would be. In a later time, Adolf Hitler would say, “I have to attain immortality, even if the whole German nation perishes in the process.” Woodrow Wilson was too moralistic to say such a thing but, given the power of human rationalization, the net difference in this respect may not have been great.

Sinking the blood and treasure of a nation for ideological aggrandizement was equated with idealism by many intellectuals of the time, as well as in later times. Moreover, like many other issues addressed by intellectuals, Woodrow Wilson’s policies and actions have not been judged nearly as often by their actual empirical consequences as by how well their goals fit the vision of the anointed.

Among the Progressives and others on the left who rallied to President Wilson’s war efforts were New Republic editor Herbert Croly, John Dewey, Clarence Darrow, Upton Sinclair, Walter Lippmann, John Spargo and George Creel, a former muckraker who spearheaded the wartime propaganda efforts of the Wilson administration. Dewey, for example, declared: “I have been a thorough and complete sympathizer with the part played by this country in this war, and I have wished to see the resources of this country used for its successful prosecution.”

Since Wilson had been, for much of his adult life, a quintessential academic intellectual, it is hardly surprising that his words as President repeatedly found resonance among many other intellectuals and evoked lavish praise from them. For example, one of Woodrow Wilson’s speeches about the right of self-determination of peoples in 1916 elicited these responses:

The president of Williams College, for instance, compared it to the Gettysburg Address. Walter Lippmann, using the Monroe Doctrine as his point of reference, wrote: “In historic significance it is easily the most important diplomatic event that our generation has known.” Hamilton Holt proclaimed that the address “cannot fail to rank in political importance with the Declaration of Independence.” In an editorial entitled “Mr. Wilson’s Great Utterance,” the New Republic suggested that the President might have engineered “a decisive turning point in the history of the modern world.”

Chapter 22: The Influence of Intellectuals

A thought provoking argument for opening up the libel laws:

“Even the liability of journalists under the laws against slander and libel has been reduced almost to the vanishing point in the case of slandered or libeled individuals who are considered to be “public figures.” Yet, in terms of social consequences, slander or libel against individuals holding or aspiring to high government offices harms the general public as well as the particular individuals who are targeted. If voters are persuaded to abandon someone whom they were otherwise prepared to vote for, as a result of false charges spread by the media, that is as harmful as any other voter fraud.

If nominees to be federal judges, including Supreme Court justices, can find their nominations derailed by false charges of racism or sexual harassment spread by the media, that can deprive the public not only of the services of those particular individuals but also the services of many others later, who refuse to jeopardize their reputations, built up over a lifetime, by entering a confirmation process where reckless and inflammatory accusations, spread nationwide through the media, have become the norm and proving oneself innocent is virtually impossible.”

Sowell gets HEATED in this paragraph and I’m here for it:

One of the many arrogant assumptions of the intelligentsia is that outsiders have to bring meaning into the lives of ordinary people, mobilize them behind some common cause and give them a sense of importance. But anyone who thinks that a mother is not important to a child or a child to a mother has no understanding of human beings.

There are few things as important to lovers as each other. Most people already have someone to whom they are enormously important and whose lives would never be the same without them. That such people may seem unimportant to intellectuals says more about intellectuals than about them. And to project that sense of their unimportance onto the people themselves is one of the many violations of fundamental intellectual standards by intellectuals.

Quote begins around 39:40 of chapter 16 in the Audible version, this passage really explains a lot of what happened during the Covid pandemic:

“Vast sums of money dispensed by bureaucracies also give them great leverage with experts in their particular areas of operation. Bureaucracies’ arbitrary choices of which particular academic or other researchers to finance not only enable them to influence public opinion in the direction of the policies favored by the bureaucrats, it can have a chilling effect on experts who know that expressing views opposed to that of the cash dispensers, whether on autism, global warming, or numerous other issues, jeopardizes their own access to the large sums of money necessary to finance major research.

Since research funding can be crucial to the experts’ own careers, and that of their colleagues, a discrete silence may seem the better part of valor when an expert is unable to believe or advocate the position taken by a large bureaucracy. Not only will openly expressed skepticism, much less opposition, reduce the chances of getting the research funding on that particular subject, to the extent that going against the grain reduces the favorable light in which the whole institution, which may be an academic department or a consulting firm is viewed. The individual expert can be subjected to the displeasure, and its consequences, of day-to-day colleagues as well.

In short, bureaucracies are often able to turn the visions of the intelligentsia into the law of the land, at least within their own respective jurisdictions, subject to little correction by consequential feedback from those who know better, or by those members of the public who suffer the consequences insofar as the media think within the framework of the same vision, there may be little awareness conveyed to the general public that there are other views on the issues, much less informed criticism, instead the public may hear that “All the experts agree” on the issue.”