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Applied Economics: Thinking Beyond Stage One

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The application of economics to major contemporary real world problems--housing, medical care, discrimination, the economic development of nations--is the theme of this new book that tackles these and other issues head on in plain language, as distinguished from the usual jargon of economists. It examines economic policies not simply in terms of their immediate effects but The application of economics to major contemporary real world problems--housing, medical care, discrimination, the economic development of nations--is the theme of this new book that tackles these and other issues head on in plain language, as distinguished from the usual jargon of economists. It examines economic policies not simply in terms of their immediate effects but also in terms of their later repercussions, which are often very different and longer lasting. The interplay of politics with economics is another theme of Applied Economics, whose examples are drawn from experiences around the world, showing how similar incentives and constraints tend to produce similar outcomes among very disparate peoples and cultures.


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The application of economics to major contemporary real world problems--housing, medical care, discrimination, the economic development of nations--is the theme of this new book that tackles these and other issues head on in plain language, as distinguished from the usual jargon of economists. It examines economic policies not simply in terms of their immediate effects but The application of economics to major contemporary real world problems--housing, medical care, discrimination, the economic development of nations--is the theme of this new book that tackles these and other issues head on in plain language, as distinguished from the usual jargon of economists. It examines economic policies not simply in terms of their immediate effects but also in terms of their later repercussions, which are often very different and longer lasting. The interplay of politics with economics is another theme of Applied Economics, whose examples are drawn from experiences around the world, showing how similar incentives and constraints tend to produce similar outcomes among very disparate peoples and cultures.

30 review for Applied Economics: Thinking Beyond Stage One

  1. 4 out of 5

    Carla

    I remember reading several articles/essays/excerpts from Thomas Sowell in undergrad. He has the great ability of making economics accessible though his clear writing style and simple presentation of ideas. However, in this particular book, it was just that - the simplicity - that bothered me. The whole premise of the book is that we should "think beyond stage one" and consider long-term effects of policies and practices. Sowell describes the (usually unintended) negative effects of certain polici I remember reading several articles/essays/excerpts from Thomas Sowell in undergrad. He has the great ability of making economics accessible though his clear writing style and simple presentation of ideas. However, in this particular book, it was just that - the simplicity - that bothered me. The whole premise of the book is that we should "think beyond stage one" and consider long-term effects of policies and practices. Sowell describes the (usually unintended) negative effects of certain policies such as insurance, government-run health care, and anti-discrimination laws. Unarguably, there have been downsides to all of these. People abuse health care and use it differently when they are not the ones directly paying for it. As mentioned by a friend last week, instead of expanding female sports some colleges eliminated certain male sports as a result of Title IX. So, while Sowell was able to shed light on these issues, he writes from an extreme laissez-faire perspective and the one-sidedness of the arguments often seem to simple. Rarely (in this book) does he expand discussions of cost and benefits beyond monetary to include health, social capital, fulfillment, etc. Nor does he always elaborate on the full issue. For instance, on the discussion of the effects of land use on housing prices, he mentions a very limited application of land use regulation that is often touted in the realm of planning as ineffective. I agree with Sowell in that exclusionary land use policies or residential zoning that requires half acre lots is counterproductive. However, he doesn't mention land use policies that attempt to integrate transportation with land use, create mixed-use communities, and provide certainty to developers. His aversion to open space regulations does not take into account the costs and benefits of the results either. While housing is limited in NYC, could you imagine NYC without Central Park? Privately owned public spaces have been produced in a variety of ways, through mandates and incentives. Rather than blasting all of these initiatives, why not compare? Sowell has written numerous books and articles, so perhaps he has in other writings. I will definitely continue to read Sowell, but I think it would be unwise to only read from this perspective.

  2. 5 out of 5

    Brenton

    The title would have you believe this would be a more thorough-going followup to Sowell's fantastic "Basic Economics", with a greater emphasis on practical, real-world problems and proffered solutions evaluated by empirical analyses. That is not the case. "Applied Economics" treads a lot of familiar ground for those acquainted with Sowell and makes many of the same arguments found in Basic Economics, only from a more obviously biased perspective. The level of research in the material covered is The title would have you believe this would be a more thorough-going followup to Sowell's fantastic "Basic Economics", with a greater emphasis on practical, real-world problems and proffered solutions evaluated by empirical analyses. That is not the case. "Applied Economics" treads a lot of familiar ground for those acquainted with Sowell and makes many of the same arguments found in Basic Economics, only from a more obviously biased perspective. The level of research in the material covered is as usual serviceable, but the general tone is more indoctrinating than illuminating. Anyone who has read the classic "Basic Economics" and is looking for more challenging material will not find it here. This is the fourth Sowell book I've read and is bar none the most disappointing.

  3. 5 out of 5

    Michael

    Thomas Sowell's "Applied Economics" ought to be required reading in every high school and college economics, politics, and English courses. While Mr. Sowell is Ph.D economist and fellow at the Hoover Institute at Stanford, his ideas are useful even to the non-economist. As a society, we tend to be taken in too easily by people who make irrational arguments that sound good at first glance but produce miserable results since no one thought about the next step. Often times, too many words are polit Thomas Sowell's "Applied Economics" ought to be required reading in every high school and college economics, politics, and English courses. While Mr. Sowell is Ph.D economist and fellow at the Hoover Institute at Stanford, his ideas are useful even to the non-economist. As a society, we tend to be taken in too easily by people who make irrational arguments that sound good at first glance but produce miserable results since no one thought about the next step. Often times, too many words are politically popular but are actually quite harmful. Such words include: "living wage," "consumer protection," "rent control," etcetera. When these ideas are actually applied in practice, the results rarely meet the rhetoric over the long-run. Politicians only tend to care about what will get them re-elected, and as a result, few of them have an incentive to think about what will happen 10 years from now. As a result, many often escape the blame since the poor results will be far removed from their disasterous policies. This, of course, could easily be construed as a problem with democracy, but instead, my feeling is that it is a problem with our educational system. If our educational system actually educated citizens to think deeply about what would be the consequences of certain policies, perhaps the heated irrational logic emanating from certain politicians would cease. Perhaps such rhetoric would continue to work in irrational hotspots such as Berkeley, but rare for it to work elsewhere. One could only hope. This book is a must read for everyone -- regardless of who you are.

  4. 4 out of 5

    Mark Geise

    “Applied Economics: Thinking Beyond Stage One” is another great work by Thomas Sowell. This book is more of a summation of other, more detailed books of Sowell’s. Rather than being about one particular topic like education or affirmative action, this unifies his positions and approaches to various issues into one book. Thus, most of the examples he uses are drawn from other books he has written. The unifying idea behind this book is that we must think of other consequences of actions beyond the “Applied Economics: Thinking Beyond Stage One” is another great work by Thomas Sowell. This book is more of a summation of other, more detailed books of Sowell’s. Rather than being about one particular topic like education or affirmative action, this unifies his positions and approaches to various issues into one book. Thus, most of the examples he uses are drawn from other books he has written. The unifying idea behind this book is that we must think of other consequences of actions beyond the immediate and obvious effects of those actions. The idea reminds me of Bastiat’s “What Is Seen and What Is Not Seen.” To support the main thesis, Sowell discusses the economics of discrimination, housing, and health care (among other topics). In each case, he discusses the current situation surrounding that topic, the history of that topic, and what the “usual” thinking is about that topic (i.e., not thinking beyond stage one). He then uncovers secondary and tertiary effects of particular policies and “solutions” to the perceived problem. By analyzing these less obvious effects, he unveils the fallacies in the original argument. One example that particularly stands out is his analysis of rent control laws. The normal rationale for rent control laws is that it will help to keep rents low, primarily for the benefit of lower-income people. However, rent control laws have led to several less obvious outcomes. First, when the price of something is pushed below the market value of that something, people demand more of it than they otherwise would. Families or groups that would otherwise share a dwelling demand more space in a rent control environment. This causes the scarce resource of housing to be allocated less efficiently than it would be in a free market, leaving less supply and higher prices for those that do not receive the benefit of rent control. Second, landlords in a rent control environment will not maintain their housing to the same extent that they would in a free market. Because demand has been increased at an artificially low price, these landlords no longer need to compete with other landlords by maintaining their buildings and apartments. In more extreme cases, landlords may abandon buildings entirely when it is impossible to turn a profit at the artificially low rents, leaving unused slums in their wake. Sowell also has similar discussions on restrictive zoning laws and housing standards in this chapter, possibly the most enjoyable chapter of the book. Thomas Sowell’s analysis is always worth reading. I believe that his main thesis is worth absorbing; if we could apply this type of analysis to every major topic in the political realm, we would be much better off as a society. Unfortunately, I am not sure if that type of discussion will ever become the norm, but we would still be better off even if just more of the population was willing to think beyond stage one. Rarely can a simple policy or law solve a given problem without having large ripple effects. Rent control laws do not keep rents low without distorting the rest of the housing market and deteriorating the supply of housing available. Ambitious anti-discrimination laws do not reduce discrimination without providing an incentive for businesses to locate in areas with low minority populations to avoid being accused of discrimination. Things are rarely as simple as academics and politicians present them to us. Adopting Sowell’s advice in this book will help readers to see through the obfuscation that is all too common.

  5. 4 out of 5

    Suzie Quint

    I know people think economics is a boring topic, and it can be. So can anything if it's not well presented. But one of the reasons I'm an economics junkie is that, when it's presented well, it's also a history lesson. But it's not just what happened but *why* it happened. Because fundamentally economics is the study of incentives. It's "people did this because this situation made it appealing." And then economists look at history and, yup, over and over, from one time and place to the next, when I know people think economics is a boring topic, and it can be. So can anything if it's not well presented. But one of the reasons I'm an economics junkie is that, when it's presented well, it's also a history lesson. But it's not just what happened but *why* it happened. Because fundamentally economics is the study of incentives. It's "people did this because this situation made it appealing." And then economists look at history and, yup, over and over, from one time and place to the next, when the government did A, B followed because, regardless of their intent, they had incentivized the people to do B. That's what I love about economics. In this book, Sowell talks about something else that frustrates me: people's inability to think beyond stage one. Thinking beyond stage one is what I was taught as critical thinking. There's not a lot of critical thinking done in politics which is why it's so important for people to learn how to do it. We need to know when we're being sold B.S. We need to reason out that it is B.S. for ourselves. So if you want to learn how to think critically, or you just like history, this is a great book for that.

  6. 4 out of 5

    Lucas

    After chapter upon chapter telling of the counter-productiveness of government intervention in markets, the immigration section is entirely out of place. Apparently there's nothing wrong with heavy regulation and central planning in the case of workers wanting to cross borders. The lack of an appropriately weighty explanation for the inconsistency with the rest of the book casts everything else into doubt. Instead of a coherent and principled set of arguments, all the rest could be cherry picked After chapter upon chapter telling of the counter-productiveness of government intervention in markets, the immigration section is entirely out of place. Apparently there's nothing wrong with heavy regulation and central planning in the case of workers wanting to cross borders. The lack of an appropriately weighty explanation for the inconsistency with the rest of the book casts everything else into doubt. Instead of a coherent and principled set of arguments, all the rest could be cherry picked statistics and anecdotes. I expected 'thinking beyond stage one' to be about something grand where stage one was the first n-hundred years after the invention of something, but it just means longer term thinking. I got tired of hearing about how voters or elected representatives (Sowell always uses the more pejorative term 'politicians') should have been thinking beyond stage 1 when some law eventually had the opposite effect of intended. He could have dropped the subtitle and used a few other phrases to say the same thing, or better yet let the reader make that conclusion. Lots of explanations for the status quo, but where Sowell is critical there aren't any suggestions for how to fix things. It's either not broken and trying to fix it will make it worse, or it's just broken- where frequently Sowell implies that democracy itself that is broken. Over-use of the word 'particular', usually around bland generalizations with very little content- it wouldn't be that hard to substitute some real details. There isn't any big picture analysis to show the relative economic importance of say driving after age 75 vs. owners of dangerous dogs not paying proportionally vs. government funded health care, it's all put on equal terms.

  7. 5 out of 5

    Steve Schardein

    Yet another fantastic exploration through all things economic, social, and political, guided by none other than master economist Thomas Sowell. This particular book addresses the consequences associated with "stage one thinking", which just happens to be a common point of failure for a huge number of modern politicians and a shockingly vast majority of the voting constituents today. As always, he matter-of-factly spells out how such thinking has gotten us into grave trouble in the past, and he d Yet another fantastic exploration through all things economic, social, and political, guided by none other than master economist Thomas Sowell. This particular book addresses the consequences associated with "stage one thinking", which just happens to be a common point of failure for a huge number of modern politicians and a shockingly vast majority of the voting constituents today. As always, he matter-of-factly spells out how such thinking has gotten us into grave trouble in the past, and he does so with such poise and cold fact-slinging so as to render his points practically indisputable. Naturally, he is as laissez-faire as ever in his philosophy, but you just might end up the same way if you manage to work your way from cover to cover. His brilliance on the subject is truly addictive.

  8. 5 out of 5

    Jacob

    An enlightening book that dispels the common tropes bandied about the media and political spectrum these days. Even if you have a hard time agreeing with his research and conclusions, his analysis of 'political action' not thinking beyond stage 1, with respect to long term consequences, is an appropriate critique of all political parties. Yes, this is an economic book, similar to 'Freakinomics' but more brainy. I have read two Thomas Sowell books and found both to be incredibly enlightening, he An enlightening book that dispels the common tropes bandied about the media and political spectrum these days. Even if you have a hard time agreeing with his research and conclusions, his analysis of 'political action' not thinking beyond stage 1, with respect to long term consequences, is an appropriate critique of all political parties. Yes, this is an economic book, similar to 'Freakinomics' but more brainy. I have read two Thomas Sowell books and found both to be incredibly enlightening, he is one of the Giants of our age.

  9. 5 out of 5

    Kiara

    Great book! Sowell has a unique way of simplifying complex economic concept. The section where he compares Social Security to a pyramid or Ponzi scheme was eye-opening. From insurance rates to agricultural Innovation to the differences between prejudice and bias and so much more.

  10. 4 out of 5

    Rejeev Divakaran

    Must read for anybody interested in economics or social sciences - economics of politics, race, migration, global economics etc.

  11. 5 out of 5

    Larry Henry

    simplistic understanding of economics great read.

  12. 4 out of 5

    Toe

    Reinforces the idea that working hard in America leads to success. Like it or not, those who are poor or fail almost certainly made a series of wrong choices throughout their lives. There is simply too much opportunity in our country. Incentives are everything. Memorable quotes: "Even the top FIVE percent of households by income had more heads of household who worked full-time for 50 or more weeks a year than did the bottom 20 percent. In absolute numbers, there were 3.9 million heads of household Reinforces the idea that working hard in America leads to success. Like it or not, those who are poor or fail almost certainly made a series of wrong choices throughout their lives. There is simply too much opportunity in our country. Incentives are everything. Memorable quotes: "Even the top FIVE percent of households by income had more heads of household who worked full-time for 50 or more weeks a year than did the bottom 20 percent. In absolute numbers, there were 3.9 million heads of household working full-time and year-round in the top 5 percent of households and only 3.3 million working full-time and year-around in the bottom 20 percent. There was a time when it was meaningful to speak of 'the idle rich' and the 'toiling poor' but that time has long past. Most households in the bottom 20 percent by income do not have ANY full-time, year-round worker and 56 percent of these households do not have anyone working even part-time." - Thomas Sowell, Economic Facts and Fallacies, pg. 127

  13. 5 out of 5

    Michael Palkowski

    Sowell's points are ludicrously grounded and clear, which is perfect for not only a parsimonious read but also in understanding dense economic theory in context. His treatment of the housing bubble is stellar as is his insistence in looking beyond the initial stages of policy. Looking at reverberations and side effects of well meaning legislation is something that is rarely considered, but Sowell does it masterfully here, to the point that his pronouncements seem like common sense; this is the m Sowell's points are ludicrously grounded and clear, which is perfect for not only a parsimonious read but also in understanding dense economic theory in context. His treatment of the housing bubble is stellar as is his insistence in looking beyond the initial stages of policy. Looking at reverberations and side effects of well meaning legislation is something that is rarely considered, but Sowell does it masterfully here, to the point that his pronouncements seem like common sense; this is the making of a great thinker and writer. Someone who is so lucid and clear, that they can change opinions by making their position seem entirely justified and normal, based on the evidence. A minor critique is that his focus on laissez faire economics can at times feel a tad utopian, in assuming that the market will enforce and maintain regulations that are required in maintaining safety standards for example.

  14. 4 out of 5

    Cary

    While this purports to be a follow-on to the author's Basic Economics: A Citizen's Guide to the Economy, it felt more like a re-hashing of the supporting from that earlier volume. That's not necessarily a bad thing, as we almost all need to "think beyond stage one" in our quest to achieve economic and/or political goals. Sowell treats this problem well, generally avoiding saying what is 'right' versus 'wrong' in a moral sense, but instead focuses on explaining the trade-offs and knock-on effects While this purports to be a follow-on to the author's Basic Economics: A Citizen's Guide to the Economy, it felt more like a re-hashing of the supporting from that earlier volume. That's not necessarily a bad thing, as we almost all need to "think beyond stage one" in our quest to achieve economic and/or political goals. Sowell treats this problem well, generally avoiding saying what is 'right' versus 'wrong' in a moral sense, but instead focuses on explaining the trade-offs and knock-on effects (the "stage two" effects, which most tend to ignore). Worth reading more as a standalone book than to read if you've already taken in Basic Economics: A Citizen's Guide to the Economy or some other basic/intro economics book.

  15. 5 out of 5

    Wayne Farris

    A thought provoking book that gets just a bit tedious at times. Still a good book that I am glad I read. After the introduction and first chapter or two you could just choose the topics in which you have the most interest. I especially enjoyed the gun control and housing sections. The book explores the unintended or "stage two" or "stage three" consequences of political responses to problems and how those consequences aren't realized for years. By then the consequences are frequently blamed on s A thought provoking book that gets just a bit tedious at times. Still a good book that I am glad I read. After the introduction and first chapter or two you could just choose the topics in which you have the most interest. I especially enjoyed the gun control and housing sections. The book explores the unintended or "stage two" or "stage three" consequences of political responses to problems and how those consequences aren't realized for years. By then the consequences are frequently blamed on something else.

  16. 5 out of 5

    Jen

    I read a decent range of material I think and ive taken economics classes in college and I enjoy reading about economics, but I hated this book. Sowell is a white man who can't see past his own privilege, who pulls bunk out of his ass thinly veiled as economics to explain away problems that clearly exist for reasons beyond just that. His explanations are overly simplistic as he cycles through three reasons for every theme he addresses. Slogging through this book it felt like all those puss bags I read a decent range of material I think and ive taken economics classes in college and I enjoy reading about economics, but I hated this book. Sowell is a white man who can't see past his own privilege, who pulls bunk out of his ass thinly veiled as economics to explain away problems that clearly exist for reasons beyond just that. His explanations are overly simplistic as he cycles through three reasons for every theme he addresses. Slogging through this book it felt like all those puss bags on Fox who had one economics class and think they're experts.

  17. 5 out of 5

    Alex

    The good thing about this book is that after the first few chapters, you can start from any chapter and follow/understand the application of a particular economic principle. The bad thing about this book is that for anyone who is familiar with economics, most of these principles have been nailed into their brains over the course of time. If you like these kind of books, I would recommend Freakonomics instead of this book!

  18. 4 out of 5

    Vince

    Stowell makes some very good points, even in arguing some positions that I do not agree with. generally his economic takes are sound but in many cases he fails to propose a system that would work better, or explore solutions to the issues he presents that do not require a fundamental paradigm shift but rather a small tweak to align incentives. His chapter on emigration starts out rational enough, but the chapter devolves a bit into a less rational decrying of immigrants.

  19. 5 out of 5

    Kent

    Good, common sense stuff on the economics of such things as insurance, the development of nations, labor (free and paid), and housing, and how economics relates with such things as politics and discrimination. His argument is that many, especially politicians, don't think past the immediate payoffs of economic decisions to the long-term consequences. Many helpful examples populate the book.

  20. 4 out of 5

    Sean Crowley

    Masterful practical explanation of Economics as applied to various aspects of Civilization over time. Brilliant use of practical economics to illustrate how it has impacted civilizations development or lack thereof. I must read more of Sowells work.

  21. 5 out of 5

    Nathan Newcomer

    One of the clearest books on economics out there. Sowell smashes long-held thoughts and beliefs with inscrutable logic and common-day English. It's the everyman's economics book with a punch.

  22. 4 out of 5

    Ari Lapin

    His chapter on "The Economics of Medical Care" is a must-read for anyone who doesn't want to be an ultracrepidarian when discussing present-day healthcare issues.

  23. 5 out of 5

    Spencer Marlen-starr

    Not as good as Basic Economics by the same author, but this is still an excellent read.

  24. 5 out of 5

    Abdullah Al-Abri

    I found it to be good book in economic

  25. 5 out of 5

    Jared

    Great insight into how basic economic theories play out in real life.

  26. 4 out of 5

    Doran Barton

    While on vacation in southern California, I hit a Barnes & Noble in Costa Mesa to look for something to read and something for my wife's birthday. I was looking for a book I'd read about like New Deal or Raw Deal? How FDR's Economic Legacy Has Damaged America, but the store I was at seemed chock-full of books about President Barack Obama, Global Warming, what was wrong with the Republican Party, and not much of anything that would interest a conservative like me. I did find, however, this book: While on vacation in southern California, I hit a Barnes & Noble in Costa Mesa to look for something to read and something for my wife's birthday. I was looking for a book I'd read about like New Deal or Raw Deal? How FDR's Economic Legacy Has Damaged America, but the store I was at seemed chock-full of books about President Barack Obama, Global Warming, what was wrong with the Republican Party, and not much of anything that would interest a conservative like me. I did find, however, this book: Applied Economics: Thinking Beyond Stage One. There was one small problem. My B&N discount card membership had expired one month prior. I'd only used it make one book purchase in that entire year and, coincidentally, it was at that same store in Costa Mesa. I wasn't about to blow more money on their stupid discount plan and I wasn't going to spend $35 on "Applied Economics". I bought a different book instead and got something for my wife's birthday and went on my way. When I returned home, I ordered Applied Economics Thinking Beyond Stage One from Amazon along with some other books, all at much more reasonable prices. I decided to read this one first. Thomas Sowell is a very interesting guy. He's scholar in residence at the Hoover Institution at Stanford University and has taught economics at Cornell, UCLA, Amherst and other schools. He's written several books on economics. This book is the revised (and enlarged) edition and aims to help members of the general public understand complex economic systems. Shooting for the general public is a lofty goal. I don't think Sowell quite made it. It was hard for me to absorb some of this material and I think I've been exposed to more economics material than the average member of the general public. I think this is a testament to how difficult of a task Sowell had taken on rather than his inability to achieve his goal. The book is divided into eight chapters, each tackling an issue from the standpoint of pure economics. The first chapter, "Politics versus Economics," serves as a primer for the rest of the book and explains the "stage one" concept in the subtitle. Sowell states that most politicians (and many regular people, for that matter) fail to consider (or admit knowledge of) the long-term effects of economic policies (or any policies, for that matter.) This is, as Sowell puts it, "stage one thinking." Sowell's intention in this book is to help the reader understand the longer-term effects of legislation and policy decisions. In the first chapter, Sowell explains: Laws and policies that will produce politically beneficial effects before the next election are usually preferred to policies that will produce even better results some time after the next election. Indeed, policies that will produce good results before the next election may be preferred even if they can be expected to produce bad results afterward. As an example, a few paragraphs later: ... it is an open question whether drug prevention programs actually prevent or even reduce drug usage, whether public interest law firms actually benefit the public, or whether gun control laws actually control guns. Later, he examines the consequences of a series of wage and price controls instituted in the 1970s by the Nixon administration and upheld or carried further by the Ford and Carter administrations. What seemed like a good idea at the time resulted in terrible economic consequences in the long run. Sowell points out that many politicians just feel an overwhelming need to "do something" whenever there is a crisis at hand. Doing something almost always seems like such a good idea, to those who do not look beyond stage one, that they see no need to look back at history or to apply economics. The alternative to a "do something" approach is not to have the government always do absolutely nothing but,rather, to recognize that governments can only do something specific-- and that these specifics must be assessed in terms of their specific erffects, both immediate and long-term, as well as the general effects of extended experimentation. The second chapter, "Free and unfree labor" begins by talking about the history of slavery. It was interesting reading a book by one of the handful of famous black people in the field of economics discussing the pros and cons of various types of slavery. Sowell actually points out that slaves in the southern United States prior to the U.S. Civil War were treated very well compared to other forced labor situations throughout history. This chapter also touches on crime as an occuptation, and indentured servitude. The third chapter dives into the economics of medical care. It's no surprise that Sowell makes a strong case against government-subsidized healthcare (i.e. "Universal health care"). His most pronounced argument is simply that government healthcare is another way for saying "price controls" and he already discussed the disastrous effects such controls have on a market in the first chapter. He shows these effects are obvious when you look at government health care systems in Great Britain, Canada, and other countries that offer such programs. He also discusses the economics of malpractice insurance, pharmaceutical drugs, drug advertising, and finally an extremely enlightening treatment on organ transplants and how much sense it makes to allow a legal market for organs for organ transplantation. That was really eye opening. Chapter Four discusses the economics of housing and illustrates how government action and regulation affects pricing. He also discusses rent control, creative financing programs, segregation in housing, and other housing issues. Chapter Five is titled "Risky Business" and is generally about the economics of insurance, but it goes beyond just the business of insurance. Most people, and certainly some politicians, don't consider risk issues when considering an issue. One of my favorite sections of this chapter discusses how the family was traditionally the main risk reduction instutition in people's lives. This makes perfect sense when you consider how important family honor was, say, 2-300 years ago. ...the family-- the oldest insurer of all -- cautions its members, both when they are growing up and one specific occasions afterward, against various kinds of risky behavior. When families had the burden of taking care of an unwed daughter's baby, there was more chaperoning, screening of her associates, and moral stigma attached to unwed motherhood. All these things declined or disappeared after mean of these costs were shifted to government agencies. Sowell attacks the issues of risk and insurance from a number of surprising and enlightening angles. In Chapter Six, Sowell takes on immigration. Expecting him to jump right into the overwhelming costs to the system the illegal immigrant issue burdens our government, I was a little taken back when I a rather comprehensive look at immigration across history. He discusses cultural implications, income implications, health implications, legal and illegal immigration, economic benefits and costs to immigrants and the society they are immigrating to. It is, perhaps, the most unbiased and clearly focused treatment on immigration I've ever read. In his conclusions, he does touch on some points specific to the hot issues in the US illegal immigration debate. For example, in comparing import of products versus import of labor: When Americans buy a Toyota from Japan, the Toyota does not demand that the United States accomodate the Japanese language or that Americans adjust themselves to Japanese customs in their own country, much less introduce diseases into the American population. Moreover, Toyotas do not give birth to little Toyotas that can grow up with the problematic attitudes of some second generation immigrants. Chapter seven is about discrimination. It begins by educating the reader on the distinct differences between bias, prejudice, and discrimination. Sowell points out that bias, prejudice, and discrimination are not "bad" by themselves. There are circumstances, history, and more criteria to consider before we can judge that they are bad. From there, Sowell discusses anti-discrimination laws, affirmative action regulations and legislation, and the pros and cons (mostly cons) of each. One statement from the summary section reads: ...those who fail to qualify for particular benefits are often said to be denied "access" or "opportunity," when in fact they may have had as much access or opportunity as anyone else, but simply did not have the developed capabilities required... ...a mental test may be characterized as "culturally biased" if one group scores higher than another, as if it is impossible for different groups to have different interest, experience, upbringing, education, or other factors that would lead to a real difference being registered, rather than a biased assessment being made. Chapter eight discusses the economic development of nations. This chapter discusses the misnomers of "developing nations," the effects of foreign aid, the importance of formal property rights, the geographic issues related to economies as well as bunch of other implications. As I mentioned at the beginning of this review, Sowell's book is pretty heady content, but I found it refreshing as it is so clear cut. All of his statements came down on the side of common sense. Isn't that what we all wish our policy makers employed more of?

  27. 5 out of 5

    Ryan

    opened strong, last two chapters weren't great

  28. 4 out of 5

    Nathan Albright

    This book was a joy to listen to, as I had the chance to do so during my recent trip to California with a couple of friends/relatives.  A large part of what made the book a joy was the way that the author thoughtfully examined various subjects of political interest in a way that allowed his insights to easily supplement that of the reader or listener (as the case may be) in their own conversations on political matters.  Additionally, the book as a whole is full of the sound reasoning and attenti This book was a joy to listen to, as I had the chance to do so during my recent trip to California with a couple of friends/relatives.  A large part of what made the book a joy was the way that the author thoughtfully examined various subjects of political interest in a way that allowed his insights to easily supplement that of the reader or listener (as the case may be) in their own conversations on political matters.  Additionally, the book as a whole is full of the sound reasoning and attention to detail and nuance that makes Sowell's works as a whole a joy to read.  In this particular volume the author is on sound ground not only as an economist, but also someone whose knowledge social and political issues around the world is deep and profound and whose understanding of cultural patterns is similarly impressively deep. Yet despite the author's considerable knowledge, he shows a great deal of patience in methodically demonstrating how it is that good intentions and efforts at dealing with unpleasant realities often make those realities worse as a result of a lack of wisdom and attention when it comes to the perverse incentives that are created by one's interventions. This particular book is organized in a thematic fashion over nine discs, with the author examining in turn the economics of politics, housing, medical care, crime, discrimination, and the economic development of nations, among other subjects.  Throughout the course of these discussions the author looks at the difference between political and economic aspects of reality and the way that attempts to ameliorate conditions can often lead to negative externalities that exacerbate the original problem one was trying to solve.  For example, laws that seek to control rent prices lead to a reduction in housing stock as fewer rental units are built and maintenance decreases in existing housing in a predictable fashion.  The reduction or removal of such maladroit policies then leads, almost as if by magic, to more housing being built because it is again profitable to do so.  Throughout the book the author contrasts the great mass of people, especially leftist politicians, who are only able to think in stage one terms, and those whose knowledge extends to an understanding of the responses that people are going to make to given policies and regulations that allows them to thoughtfully oppose such follies and to seek to properly harness the motivations that exist in beneficial directions. And ultimately that is what this book succeeds at the best, the conveyance of the difficulty of managing social change in a way that benefits society as a whole as well as its members.  It is easy to conceive of interventions that to those who lack knowledge and insight can coerce desired social change, but it requires more thoughtfulness to recognize the way in which those actions may lead to a decline in the well-being of those groups that one claims a desire to support.  The author is, as usual, unsentimental in his approach and unsparing in his criticism, commenting on the way that we prefer socially beneficial agents to be in competition with each other but prefer criminal elements to be in cartels where the anarchic violence of individual members of the criminal class can be restrained by the rational calculations of crime lords who do not wish for scrutiny on their profitable but socially undesirable operations that would be inhibited by popular hostility to their firms.  Not everyone is amenable to thinking in a sound economic fashion, but for those who are, this book is definitely an achievement.

  29. 4 out of 5

    Jason

    I think this is a great book, and I think it was probably even better when it was written. BUT it has not aged well because of its very premise (which is ultimately that one needs to think about powerfdul distant effects as well as weak immediate effects) has weakened the case studies. This isn't surprising, given that the book is like 15 years old now, but it does point out that economists, like anyone else, really don't have a clue as to what the future holds. Sowell's basic argument: when thi I think this is a great book, and I think it was probably even better when it was written. BUT it has not aged well because of its very premise (which is ultimately that one needs to think about powerfdul distant effects as well as weak immediate effects) has weakened the case studies. This isn't surprising, given that the book is like 15 years old now, but it does point out that economists, like anyone else, really don't have a clue as to what the future holds. Sowell's basic argument: when thinking about a piece of legislation (say, minimum wage laws) one needs to consider distant reasoning as well. Raising the minimum wage to $15 an hour will give workers raises. It will also render some jobs unemployable and will also stimulate a "legal" secondary labor market that seeks a below-15 equilibrium (such as unpaid internships and the rise of the microtransactive economy). Makes sense, and in the 90s it made a lot of sense. Sowell is a conservative, laissez-faire economist, the kind I got a lot of exposure to in undergrad (and, to a lesser extent, grad school), the kind that preached that a rising tide moves all boats upward, that states that try to push equality over efficiency end up being more equal but also overall more poor, and that restricting free trade necessarily means less consumer surplus. All things which I believe remain true. The problem is that no one in the 90s, not even leftists like Krugman, were taking seriously how much a rising inequality gap, which necessarily arose from that, would change the entire socioeconomic dynamic, and in today's worldview it's almost impossible to go back to this ability to speak in terms of comparative advantage and deadweight loss as ends in and of themselves the way people did 20 years ago. Citizens of Tsarist Russia ate more beef in 1917 than Soviet citizens ever did, as the author notes, and that on the whole they lived better than they did in the Soviet Union for many years to come. But the Revolution came, even in that country that was growing the fastest.

  30. 4 out of 5

    Eric Hollister

    I was slightly disappointed with this, to be honest, as it seemed to me that Sowell didn't think beyond stage one of some of his conclusions. At one point when arguing against government provided health care he makes the point that "waiting for medical care is particularly costly in human terms, not only because of the needless pain that may be suffered by waiting, but also because the underlying malady may be getting worse..." So the cost of delaying health care is not good. But then he dismiss I was slightly disappointed with this, to be honest, as it seemed to me that Sowell didn't think beyond stage one of some of his conclusions. At one point when arguing against government provided health care he makes the point that "waiting for medical care is particularly costly in human terms, not only because of the needless pain that may be suffered by waiting, but also because the underlying malady may be getting worse..." So the cost of delaying health care is not good. But then he dismisses the uninsured with essentially three paragraphs, including the great sentence: "The most poverty-stricken person living on the street will be treated in an emergency room, with or without insurance." He does not address who pays for that, which seems to be a pretty important beyond stage one question. He also doesn't address all the delayed procedures resulting from uninsured individuals, which surely result in the same costs (if not worse) he describes above. Oddly, later in the book he compares the costs of the same procedures to individuals with and without insurance. Those without will pay almost twice as much in some cases, which seems like it would lead to delays in medical care. He seems to contradict himself in the insurance part of the book as well, at one point railing against efforts to make things (cars, for example) safer, and then talking about the benefits of insurance companies and product testers making things safer. Later, when discussing the economic development of nations, talks about Japan's remarkable recovery after World War II in spite of its lack of natural resources, never once mentioning the assistance the Allies gave Japan (similar to the Marshall Plan) following the war. There are some editing gaffes in here as well. I don't know...the book just didn't live up to my expectations.

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