Economic Facts and Fallacies
by Thomas Sowell
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Book Reviews of Economic Facts and Fallacies
Book Review: Being Misled By Those Wanting To Shape The World To Their Idealized Vision
Summary: 5 Stars
I am an unabashed fan of Thomas Sowell and wish that more people would read his books. Sowell is a great observer of contemporary society and has a unique way of peering under its superficiality to show us what lies deeper. While his books are written for the "thinking" person, they are written for everyone. "Economic Facts and Fallacies" like everything else I have read of his does not disappoint.
In "Economic Facts and Fallacies," Sowell focuses on how the use of undefined terms and non-evidenced based assumptions (fallacies) are used to mobilize (& manipulate) people to provide financial, political, and psychological support for policies that do not truly serve society-at-large. The real underlying facts are just too dangerous, threatening those who are intent on shaping society to their idealized vision or to feed their own sense of self.
The use of a terms such as "fair," "social justice," and "equality" are powerful when left undefined. Who is in favor of "unfairness" or "injustice"! These appealing terms mean wholly different things to different individuals and groups and can be used to mobilize support of policies that have untoward consequences. In California's battle over same-sex marriage, Proposition 8, gay activists used these terms to mobilize voters against traditional marriage. The definition of these terms were not challenged and were useful in gaining support from 48% of the voters who saw the issue as a "civil rights" issue...despite the fact that no rights were at stake (see California Supreme Court oral arguments).
After his overview, Sowell moves on to address, in detail, four widespread fallacies: the zero-sum fallacy -economic transactions are a zero-sum process; the fallacy of composition - the belief that what is true of a part is true of the whole; the chess-piece fallacy - pieces can moved around with no harm to the whole; and the open-ended fallacy - no matter how much is done, there will be an open-ended desire to do more.
Sowell succeeds in showing how these fallacies are manifested in our beliefs about rent control, urban planning, environmental controls, traffic congestion, "the" gender pay gap, the gap between the "rich and the poor," and much more. The book is organized around the five subject areas, "Urban Facts and Fallacies," "Male-Female Facts and Fallacies," "Academic Facts and Fallacies," "Racial Facts and Fallacies," and "Third World Facts and Fallacies." The two most insightful for me were the sections on academics and the third world.
"Economic Facts and Fallacies" has been written for the public at-large. You do not need to be economist to be rewarded...and rewarded you will be. The reader will gain a more balanced understanding of our contemporary world, gain a "true" understanding how we are continually misled, be better equipped to challenge those are misleading, and become a more intelligent voter.
Book Review: Check for the Appropriateness of Comparisons Before Drawing Conclusions
Summary: 3 Stars
Economists are driven crazy by the misleading conclusions that journalists and politicians draw from using numbers in the wrong way. Dr. Sowell uses this book as an opportunity to challenge some of the conclusions that abound concerning cities, male-female incomes, academia, middle-class incomes and size of the group, racial differences, and characteristics of the third world versus the developed countries. It also points out that these errors have consequences in misallocating resources that could be better applied elsewhere.
If you have never sat through a class on what it takes to make a valid comparison, this book is one long essay on that point. That's the meta-message.
The micro-messages relate to suggesting that problems aren't as large and serious as they seem from frequently quoted statistics. I thought that Dr. Sowell was at his best in describing mismeasurements about middle class income in Chapter 5.
In several of the other chapters, especially Chapter 3, it seemed to me like he was over arguing about statistics at the expense of drawing the right conclusion from looking at the context of what is going on. There seemed to be a desire to show virtuosity that appeared to get in the way of answering the question posed in the chapter. Of course, it's absurd to say that if half of an employer's employees are women that management positions should also be 50 percent female. But if the management positions are only held by women 13 percent of the time, it does seem like something else might be going on (including possible discrimination against women). Dr. Sowell would prefer to leave the argument at the apples and oranges stage.
Some of the historical comparisons are interesting (such as how the number of highly educated women in the workforce has changed in the last 110 years). Parents who resent the high tuition their children's colleges charge will resent those charges even more after understanding more how those high prices are reached and maintained.
The book would have been a lot better if it had included a more solid description of what questions we should be asking and answering in each of these areas to understand what's going on. Without that fully developed foundation, even after reading this book many will be at sea in understanding what's going on in society and the world.
Book Review: Superficial, moderate, regimist: politically correct conservatism
Summary: 2 Stars
The first chapter of Thomas Woods's Meltdown is called "The Elephant in the Room." Dr. Woods, of course, is referring to the Federal Reserve -- a subject that merits just a few superficial mentions in Thomas Sowell's Economic Facts and Fallacies, all in reference to the Fed's statistical arm. In other words, the greatest economic fallacy of all -- that the Fed is a free-market institution that doesn't pervert and distort every single economic transaction in the United States (and the world!) -- is not even touched. As such, this book is essentially a hot pile of worthlessness.
There are some interesting insights and facts that (barely) merit a second star. But for the most part, Dr. Sowell's economics are child's play. He accepts the Fed, fiat-money central banking, the massive warfare state, drug prohibition, etc., and the state itself, without comment. He argues that CPI actually understates "inflation," thereby conceding the Keynesian definition of "inflation" as a rise in the price level, while it actually means a rise in the supply of money -- THE most crucial economic idea -- which he is 100% silent about. Prices would be falling absent the Fed's Communistic central planning, and these rises in living standards are sucked away from the poor and working class and given to Dr. Sowell's elitist paymasters.
Again, this book has a few decent insights, but Dr. Sowell misses the forest for the trees. He's essentially a dancing monkey; a stage clown and token for the Establishment to point at, who tiptoes very carefully within the confines of politically correct conservatism. There are only two distinctions among the schools of economics: Austrians and everybody else -- and Sowell is NOT an Austrian. As such, his economics are WRONG, and wrong is wrong -- he's not "less wrong" than Keynesians or Marxists; they're all just wrong! Sowell's love of the Nanny State (albeit in conservative guise) blinded him, a supposed economic genius, to the obvious and inevitable crash, whereas Austrian thinkers saw it coming 1000 miles away. This book is a worthy read solely for its demonstration that "conservative" economics is as morally and intellectually bankrupt as any other element of "conservative" political ideology. Stick with Austro-libertarianism instead.
Book Review: A Brazenly Honest Antidote to Liberal Economic Lies
Summary: 5 Stars
Before reviewing the book, it must be said that Thomas Sowell is an intellectual trailblazer. Not only is Dr. Thomas Sowell incredibly knowledgeable but he is also commendably lucid in his writing. Often times, writers feel the need to write vaguely and equivocally - most probably due to a lack of confidence in their knowledge and to cover up the carelessness of their thought patterns. Thomas Sowell thinks profoundly and can convey his ideas clearly and eloquently. Not many writers can boast of having that ability.
The book's premise is essentially a systematic dismantling of the economic canards that are invariably disseminated by the Left. The main theme that I took away from the book is that liberals refuse to research issues deeply enough to find adequate explanations for economic quagmires; rather, they prefer to simplistically use buzz words like "discrimination," "racism," and "sexism" as explanations for all economic differences and problems. Dr. Sowell destroys these notions with formidable logic and erudite prose.
The most insightful analysis of Dr. Sowell's was his Chapter Three argument that male and female income discrepancies have a plethora of explanations that extend far beyond the sophomoric liberal proclamations of "Sexism!" and "Discrimination!" Sowell's academically nuanced look at the issue absolutely trashes the notion that discrimination can be blamed for women, who are educated to the exact same level as men, earning 30% less than their male counterparts. This is one of his most powerful chapters.
It is a shame that liberals are so concerned with pushing an agenda that they continue to promulgate patent falsities about economics. This book is a powerful antidote to popular economic liberal lies, and it arms readers with a smorgasbord of useful facts that would enable them to hang in an economic debate with even the most adept liberal sophists.
The fact that Dr. Sowell is not swimming in Pulitzer Prizes and honorary degrees from every top institution in the world is undoubted evidence of the preposterousness of the idea that universities are politically neutral places that are welcoming of diverse opinions and open debate. To the contrary, universities have long been overtly hostile to conservatives and unapologetic citadels of liberal thought.
Book Review: Facts And Logic vs Faith And Emotion
Summary: 4 Stars
Thomas Sowell, a prolific author and columnist, is a national treasure and indispensable debunker of popular misconceptions, faulty reasoning and lying with statistics. His conclusions are grounded in history, hard facts and dispassionate analysis. Public policy is judged by results rather than intentions, showing how the best intentioned government action frequently makes the problem worse.
For example, blacks are under represented in the legal profession, so let's use affirmative action to increase their enrollments in the best law schools. The result? Blacks have a much higher drop out rate because many can't compete with the top students from other groups. But the same black who fails at Harvard may well have succeeded in a less demanding law school, so the net effect is fewer, not more, black lawyers.
An example of faulty logic is to compare black/white statistical data on income, SAT scores, mortgage approvals or some other category and conclude that the higher figures for whites shows racial discrimination against blacks. But the same statistics show a similar advantage for Asians over whites. Does that establish racial discrimination against whites? No, the fact is that groups can differ in these categories for reasons other than discrimination.
If you want to really understand how the world works (and how politicians, journalists and others demagogue the issues), a good start would be to pick up anything written for the layman by Sowell. His writing style can be challenging, but stick with it and you'll be well rewarded. For example:
"Many beliefs which collapse under scrutiny may nevertheless persist indefinitely when they are not scrutinized, and especially when skilled advocates are able to perpetuate those beliefs by forestalling scrutiny through appeals to emotion. Some popular fallacies of today are centuries old and were refuted centuries ago, even as they are repackaged in up-to-date rhetoric to suit current times."