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Economic Facts and Fallacies exposes some of the most popular fallacies about economic issues-and does so in a lively manner and without requiring any prior knowledge of economics by the reader. These include many beliefs widely disseminated in the media and by politicians, such as mistaken ideas about urban problems, income differences, male-female economic differences, a Economic Facts and Fallacies exposes some of the most popular fallacies about economic issues-and does so in a lively manner and without requiring any prior knowledge of economics by the reader. These include many beliefs widely disseminated in the media and by politicians, such as mistaken ideas about urban problems, income differences, male-female economic differences, as well as economics fallacies about academia, about race, and about Third World countries. One of the themes of Economic Facts and Fallacies is that fallacies are not simply crazy ideas but in fact have a certain plausibility that gives them their staying power-and makes careful examination of their flaws both necessary and important, as well as sometimes humorous. Written in the easy-to-follow style of the author's Basic Economics, this latest book is able to go into greater depth, with real world examples, on specific issues.


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Economic Facts and Fallacies exposes some of the most popular fallacies about economic issues-and does so in a lively manner and without requiring any prior knowledge of economics by the reader. These include many beliefs widely disseminated in the media and by politicians, such as mistaken ideas about urban problems, income differences, male-female economic differences, a Economic Facts and Fallacies exposes some of the most popular fallacies about economic issues-and does so in a lively manner and without requiring any prior knowledge of economics by the reader. These include many beliefs widely disseminated in the media and by politicians, such as mistaken ideas about urban problems, income differences, male-female economic differences, as well as economics fallacies about academia, about race, and about Third World countries. One of the themes of Economic Facts and Fallacies is that fallacies are not simply crazy ideas but in fact have a certain plausibility that gives them their staying power-and makes careful examination of their flaws both necessary and important, as well as sometimes humorous. Written in the easy-to-follow style of the author's Basic Economics, this latest book is able to go into greater depth, with real world examples, on specific issues.

30 review for Economic Facts and Fallacies

  1. 4 out of 5

    Amora

    This book was way ahead of it’s time. Almost every economic fallacy repeated by ideologues such as Paul Krugman and Bernie Sanders can be found debunked in this book. Economist Thomas Sowell makes empirical arguments, rather than anecdotal arguments made by people like Krugman and Sanders, to disprove the claims that wages have stagnated, income inequality is hurting the country, and that the poor are staying poor. He also disproves the much repeated myth that FDR ended the Great Depression with This book was way ahead of it’s time. Almost every economic fallacy repeated by ideologues such as Paul Krugman and Bernie Sanders can be found debunked in this book. Economist Thomas Sowell makes empirical arguments, rather than anecdotal arguments made by people like Krugman and Sanders, to disprove the claims that wages have stagnated, income inequality is hurting the country, and that the poor are staying poor. He also disproves the much repeated myth that FDR ended the Great Depression with his New Deal policies. On top of that he also explains that many of the racial economic disparities pointed out by progressive politicians to argue that the United States is racist can be explained by other factors. Excellent book and I would love it if Sowell released a third edition of this book!

  2. 5 out of 5

    Ezzy

    Most of this book is just bullshit. Mainly, it's pandering to a political ideology while pointing out weaknesses (some fatal, in his defense) of statistics that are bantered around. However, he moves from "here's a weakness in this study" to "my ideology, which disagrees with this study, is now proven right". However, all this book actually does is show that nobody has real data to support their ideologies- Sowell least of all. To pretend that disproving one hypothesis proves another is the heig Most of this book is just bullshit. Mainly, it's pandering to a political ideology while pointing out weaknesses (some fatal, in his defense) of statistics that are bantered around. However, he moves from "here's a weakness in this study" to "my ideology, which disagrees with this study, is now proven right". However, all this book actually does is show that nobody has real data to support their ideologies- Sowell least of all. To pretend that disproving one hypothesis proves another is the height of misuse of the scientific method. First of all, in a economics text that's being marketed as at least somewhat impartial, I don't expect to hear lengthy diatribes about constitutionality of particular actions. Right away, that should tip everyone off that this is actually political commentary, not economics. Second of all, right off the bat he implies that it's absurd to worry about preserving any open or green spaces in urban planning, because 95% of this country is still undeveloped. Well, that's great if you live in Alaska. If you take out Alaska and other land that is uninhabitable (like much of the desert and mountains) that number looks very, very different. Who the hell cares how much green space there is in Maine if you live in the park-free suburbs of some city with no urban planning, and have no place to take your children to play? Clearly, this is a person who thinks only about numbers and not about how people actually live. That's a method that can sometimes lead to interesting and insightful results, but to pretend that it reflects anything like the real-world is naive. It's the kind of thing I would expect from undergraduates in Freshman Econ 101. The next fallacy presented as truth in this book is that if you have no regulation on building, everything will be cheaper. As "evidence", he compares the Bay Area of California and Houston, Texas. Houston has no regulation and just builds more roads as people move further and further from the city, and housing is cheaper there. Is conclusion is that regulation makes things more expensive. There is no doubt that regulation makes life in California expensive. What Sowell fails to take into any kind of account is that regulation isn't the only factor. Sometimes, that regulation can make the standard of living so much higher that competition to live there increases- Econ 101 tells us that that should drive up the price. People are willing to pay more to live in the Bay Area because life there is so rad. Pave the whole thing, make it all suburbs (like Houston) and how much would people be willing to pay? But since the bottom-line price is the ONLY important factor in Sowell-land, I guess that would be a win. Allow me to let you into a little secret: people who have a lot of money to spend on housing tends to be the well-educated professionals. A disproportionate number of them are liberal. Housing is cheap in most of the south because compared to the coasts, it's largely unfriendly to liberals, ethnic minorities, gays, and science. Perhaps a better question is "with the total lack of many regulations in the south, which should make it very attractive to people, why is housing there still so cheap?" Also fails to take into any kind of account the physical differences in landscape- Houston is flat and has no restrictions on space, unlike much of the mountainous west coast. Reality is a bitch when it interferes with labeling pretend fallacies. His chapter on income inequality is also bullshit. A big study just came out showing that women right out of college, with no children, are still getting paid less than their male counterparts (equal in major, age, CV, etc). So the "investing in children, paid less in the workplace" thing doesn't hold much water, either. Also, saying that women get to spend their husband's money, so it doesn't matter if the earn less, is beyond insulting. Another fallacy presented as fact is that the suburbs are equally environmentally friendly as living in the city. Since everyone creates garbage, more people living in the suburbs means more garbage in the suburbs and less in the city. That's true for some factors, but doesn't take into account things like flooding- also an economic disaster as well as often environmental- is hugely due to all of the paving we've done, which doesn't allow water to be absorbed in a natural way. Just one example of millions Sowell chooses not to address in this cherry-picking book. By the time I was 1/10 of the way through this travesty of a book, I could tell the theme is "ruin it for everyone, and we can all have a shitty quality of life that comes cheap". Maybe he's taking the Walmart model to it's logical conclusion, I don't know. But it's certainly not a place I want to live.

  3. 5 out of 5

    David

    This fascinating book peels away the truths from the untruths about economics in our societies. While the style of writing is rather dry, the content is quite engaging. Many commonly held beliefs are simply wrong, as can be shown easily with a few facts and some straight-forward thinking. Law school and college accreditation boards are not designed to hold schools to some acceptable standard for their students. They are designed to maintain the elite status of the so-called "top" schools, and to This fascinating book peels away the truths from the untruths about economics in our societies. While the style of writing is rather dry, the content is quite engaging. Many commonly held beliefs are simply wrong, as can be shown easily with a few facts and some straight-forward thinking. Law school and college accreditation boards are not designed to hold schools to some acceptable standard for their students. They are designed to maintain the elite status of the so-called "top" schools, and to keep the upwardly-mobile schools from getting uppity and fashionable. They do this by making requirements that have little to do with the quality of education, but have much to do with the physical trappings of luxury. A related fallacy is that it is necessary to graduate from an ivy league college to get a top job. This idea is countered by the observation that most top corporate leaders do not come from elite colleges. Sowell shows how politicians lie with statistics. It is so easy. An incumbent politician who is running again for office can use one set of statistics about, say, household income to show how awful his predecessors were, and individual income to show how great he was while in office. Sowell shows how foreign immigrants often raise the standard of living of poor societies. It is very perverse when dictators expel them, often causing the standard of living to decline. Much of the book is about the unintended consequences of government interventions, laws and regulations. Many laws have exactly the opposite consequences from those intended. For example, rent control often has the effect of making housing completely unobtainable because it stymies building more housing units. City planners often make monumental mistakes as they plan street routes, mass transit, and zoning. They often have exactly the opposite effect, and cause massive traffic backups and effectively steal homes for uses that are not in the public's best interest. I highly recommend this book for anyone who is interested in public policy.

  4. 4 out of 5

    Cami

    I’m just finishing this book now so I won’t spoil the ending for you, just kidding. It really is a great book applying basic economic theories to real life situations. He spends quite a bit of time debunking economic myths and explaining the real reasons why for example, real estate near San Francisco and college tuition are so ridiculously expensive. Basically, it comes down to too much government economic control. I really do love Sowell’s logical practical approach. It’s great in contrast to I’m just finishing this book now so I won’t spoil the ending for you, just kidding. It really is a great book applying basic economic theories to real life situations. He spends quite a bit of time debunking economic myths and explaining the real reasons why for example, real estate near San Francisco and college tuition are so ridiculously expensive. Basically, it comes down to too much government economic control. I really do love Sowell’s logical practical approach. It’s great in contrast to raving, emotional talk show hosts. It reminds me of why I am a conservative-because conservative principles work! Given the fact that Sowell is a conservative and so am I, I would really like to read a liberal equivalent to this book. If anyone has one to suggest I would appreciate it. His arguments seem so straight-forward and indisputable to me, but that’s because I already agree with them. I would like a book to argue the other side as articulately and with as much scholarly effort.

  5. 5 out of 5

    Jen

    This gentleman has some points of view that are rather polarizing, but I have to say, he is very thoughtful and cites everything, which I appreciate. I disagree with his views on reverse mortgages, but other than that, I want to have this man's babies, all of them. Unfortunately, mingling my inferior intellectual DNA with his would be more of a tragedy than a positive thing, so no babies of his for me. Maybe I could be a surrogate for his clones? Seriously, he looks at things that seem completel This gentleman has some points of view that are rather polarizing, but I have to say, he is very thoughtful and cites everything, which I appreciate. I disagree with his views on reverse mortgages, but other than that, I want to have this man's babies, all of them. Unfortunately, mingling my inferior intellectual DNA with his would be more of a tragedy than a positive thing, so no babies of his for me. Maybe I could be a surrogate for his clones? Seriously, he looks at things that seem completely reasonable in a completely different way and can make one realize that we never really were in Kansas, we just thought we were. Very smart guy and I definitely want to read more of his work. Five stars, highly recommended!

  6. 5 out of 5

    Kenny

    STUBBORN THINGS Thomas Sowell’s remarkable book Economic Facts and Fallacies is even more remarkable for its brevity. In just over two hundred pages, he tackles and deconstructs fallacies infecting our cities, our relationships, the academy, business, race relations, and the Third World. John Adams said famously, “Facts are stubborn things.” The Austin Lounge Lizards sang, “Life is hard, but life is hardest when you’re dumb.” Both are true and one of the most difficult things in life is keeping a STUBBORN THINGS Thomas Sowell’s remarkable book Economic Facts and Fallacies is even more remarkable for its brevity. In just over two hundred pages, he tackles and deconstructs fallacies infecting our cities, our relationships, the academy, business, race relations, and the Third World. John Adams said famously, “Facts are stubborn things.” The Austin Lounge Lizards sang, “Life is hard, but life is hardest when you’re dumb.” Both are true and one of the most difficult things in life is keeping an open mind for facts that contradict received knowledge—our vision of the world which we hold close because it’s simply easier to believe what we already know is true than to investigate contradictory claims. After all, we’re not stupid; we know certain things are true, right? Well . . . that depends. Here are a few fallacies and the facts that contradict them. How you receive these facts is something to ponder: Urban Facts and Fallacies Fallacy: Affordable housing requires government intervention. Fact: It is precisely government intervention in housing which has made housing unaffordable. A hundred years ago people spent a smaller percentage of their income on housing than today. With increasing restrictions on building, due to zoning and environmental regulations, housing prices skyrocketed. “Open space” and “smart growth” policies restrict building and send prices upward. Houston has no zoning laws or like restrictions; a typical middle-class home on a quarter-acre lot that costs $152,000 in Houston costs more than $1 million in San Francisco. As recently as 2001, home prices in Tampa, FL were not much different than Houston, but after restrictive building laws began to take effect, housing prices doubled. And these rates hold true even when adjusted for inflation. Male-Female Facts and Fallacies Fallacy: The fact that women earn less money than men is proof of discrimination. Where such disparities have lessened, it is because of government intervention. Fact: While many white collar jobs may be performed equally well by women as men, most jobs are still dependent upon physical strength (construction) and the willingness of the person to engage in dangerous behavior (phone linemen). While men are 54% of the labor force, they are 92% of job-related deaths. In addition, women are often out of the job market for years at a time, bearing and raising children. When they return, their skills are rusty and outmoded. In the sciences, these same years are the peak years of achievement, and thus fewer women are notable scientists because most opt for motherhood instead. The proportion of women engaged in the professions was higher a hundred years ago than it was fifty years ago—long before anti-discrimination laws or the rise of the feminist movement. The reason is that the median age for marriage for women was higher a hundred years ago, thus more women were in the workforce during the formative years prior to their forties. Indeed, most women who staffed women’s colleges during this earlier era were not married at all; they opted out of family life. Finally, the likelihood of future interruptions because of a woman’s prospective role as a mother can make placing her in a senior position more of a risk to the employer than placing a man of similar ability in that same position. Only the never-married women and men are in comparable circumstances, and here women have had comparable or higher incomes than men, years before there were laws or government policies against sex discrimination. Academic Facts and Fallacies Fallacy: Attendance at a big-name college or university is essential for reaching the top. Fact: The four institutions with the highest percentage of their undergrads going on to receive Ph.D.s are all small colleges with less than 2000 undergrads each. And of the chief executive officers of the 50 largest American corporations, only four had Ivy League degrees and just over half graduated from state colleges, city colleges, or community colleges. The fact that graduates of Harvard receive prestigious jobs and salaries may be traced more to their wealthy family connections than the education they receive, as well as their income from the earnings of inherited assets. Income Facts and Fallacies Fallacy: American household income has stagnated, rising just 6% between 1969 and 1996. Fact: Household size has diminished; average real income per person in the U.S. rose by 51% over that very same period. Studies of what people actually consume—their standard of living—show substantial increases over the years. Alarming statistics about the plight of the poor never take into account the government and charitable resources available to them; indeed, the poor’s actual income from work accounts for only 22% of the actual economic resources at their disposal. As for stagnation, by 2001 most people defined as poor had possessions once considered part of a middle class lifestyle. Three-quarters had air-conditioning, which only a third of all Americans had in 1971. 97% had color television, which less than half of all Americans had in 1971. 73% owned a microwave, which less than 1% of Americans owned in 1971, and 98% of the “poor” had either a VCR or a DVD player, which no one had in 1971. In addition, 72% of the “poor” had a car or truck. Yet the rhetoric of the “haves” and the “have nots” continues, even in a society where it might be more accurate to refer to the “haves” and the “have lots.” In fine, the problem is not a stagnation of the national economy, but particular economic and social problems of particular groups of people. Racial Facts and Fallacies Fallacy: Governmentally-enforced civil rights laws have reduced racism in America. Fact: The percentage of black families with incomes below the poverty line fell most sharply between 1940 and 1960, going from 87% to 47% over that span, before the Civil Rights Act of 1964 or the Voting Rights Act of 1965 and well before the 1970s, when “affirmative action” evolved into numerical quotas. While the downward trend in poverty continued, the pace of that decline did not accelerate after these legal landmarks, but in fact slackened. There was a similar historical trend as regards the rise of blacks into professional, managerial, and other high-level occupations. In short, affirmative action has produced little or no effect on the relative sizes of black and white incomes. The median black household income was 60.9% of the median white household income in 1970—and never rose above that, or as high as that, throughout the decade of the 1970s. As of 1980, median black household income was 57.6 of median white household income. Fallacy: The current fatherless families so prevalent among contemporary blacks are a “legacy of slavery,” where families were not recognized. Fact: Most black children were raised in two-parent homes, even under slavery, and for generations thereafter. Freed blacks married, and marriage rates among blacks were slightly higher than among whites in the early twentieth century. Blacks also had slightly higher rates of labor force participation than whites in every census from 1890 to 1950. While 31% of black children were born to unmarried women in the early 1930s, that proportion rose to 77% by the early 1990s. If unwed childbirth was a “legacy of slavery,” why was it so much less common among blacks who were two generations closer to the era of slavery? Oh, and by the way, from 1994 on into the twenty-first century, the poverty rate among black husband-wife families was below 10%. Turns out that “the man” most important to blacks is the man his wife calls her husband. Third World Facts and Fallacies Fallacy: Western nation’s imperialism is responsible for poverty in the Third World. Fact: There are some prosperous countries whose conquests have been minor or non-existent, and countries mired in poverty that were never conquered. Why are those parts of the Third World least touched by contact with prosperous the most destitute of all? Blame is easier to understand than causation, more emotionally satisfying, and more politically convenient. There are many factors that must be considered: geography (mountainous countries persistently lag behind countries with extensive river valleys), isolation (the indigenous people of the Canary Islands were Caucasians living at a stone-age level when the Spaniards discovered them in the fifteenth century), climate (water is not only life-sustaining, but trade-sustaining; most advanced civilizations arose on navigable waterways), history (in the long view, all nations were Third World nations at some point), law and order (property rights, courts of law, uncorrupt officials—all culturally-dependent—create an environment of prosperity; even Rome’s bloody oppression of conquered lands resulted in a higher standard of living because these elements were a by-product of Roman dominance), population (there must be enough people to congregate in cities, where standards of living always increase; over-population is hardly ever the problem, as there are no examples of countries that had a higher standard of living when their population was half of what it is today), culture (Argentina was mired in poverty before German and Italian immigrants brought cattle-ranching and wheat-production to the country), and foreign aid (living standards were lower in sub-Saharan Africa decades after the departure of the colonial rulers, despite both nationalization of industries and foreign aid). I’ve merely touched upon Dr. Sowell’s brilliant book, just one of the scores of clear-thinking economic treatises he’s written over the years. Yes, life is hard, but I intend to make my own life less difficult by basing it on facts, not fallacies.

  7. 5 out of 5

    Nikolay

    To set the stage, I more often identify with centrist ideas (hard to explain) and the book was a conscious attempt to learn more about the “right” – Thomas Sowell is openly conservative, so it fit the bill. I must confess, I enjoyed the book more than I expected. It both brought me closer to some conservative economic ideas, made me think deeper about some statistics and public policies, and confirmed my belief that, as a society, we are far away from being able to have an unbiased discourse abou To set the stage, I more often identify with centrist ideas (hard to explain) and the book was a conscious attempt to learn more about the “right” – Thomas Sowell is openly conservative, so it fit the bill. I must confess, I enjoyed the book more than I expected. It both brought me closer to some conservative economic ideas, made me think deeper about some statistics and public policies, and confirmed my belief that, as a society, we are far away from being able to have an unbiased discourse about political and economic issues. Economic Facts and Fallacies goes into more detail about, as the title suggests, facts and fallacies (mostly fallacies) in six major areas of our lives – urban life and planning, gender issues, academia, income, racial issues, and the third world. Not an exhaustive list of areas, but let's say wide enough. The invariants in all sections are that the author: - finds a way to show us that the free market is good; - finds a way to show us that government intervention is bad; - provides clever, unpopular, and in-depth ways to reason about common facts and statistics. It is obvious from an airplane that the author is biased. The reading experience improved once I got better at filtering out the bullshit, like him claiming that because in 2001 3/4 of poor people had air conditioning versus only 1/3 of all Americans in 1971, this means that the 2001 poor are now closer to a middle-class lifestyle. WTF! Mind-boggling illogical episodes like this aside, Economic Facts and Fallacies left me with few take-aways: - obvious, but worth re-iterating – facts and statistics can be interpreted in many ways for various purposes, never forget that. This book both said it explicitly and abused some statistics to help the author's agenda :) - comparing averages when groups differ in more than one feature can be dangerous. Average yearly household income is a great example. If group A has lot more part-time workers than group B, their average yearly income will naturally be lower and if we want a more honest comparison, we should try hourly income, instead. Same if group A has often a different number of household members. - incentives, even unspoken ones, drive the behavior of large groups of people (society, organizations). When decision-makers don't have a stake, they make one type of decisions, when they're too invested, they go to the opposite extreme. As you might imagine, Thomas Sowell spoke mostly about the first kind :) - finding strong alternative voices in today's left-ish media landscape is very important for keeping a healthy information diet. Economic Facts and Fallacies offered me a valuable perspective, even if I didn't agree with many of the author's beliefs or conclusions. 📖❓Is the book for you: ✅ For you: if you have a reasonable of idea of economics, lean center/left, and want to be challenged. 🔸Maybe for you: already leaning right and want more talking points :) 🔴 Not for you: novice in economics and hope to learn more about how the world works.

  8. 4 out of 5

    Ryan

    Sowell is probably my favorite economic writer -- not for his novel ideas, but for his excellent presentation of the entire body of generally reasonable economic thought. He would be my dream pick for a political leader with real power. This book is a great take-down of widely believed but wrong ideas about rent control, gender pay imbalances, racial economic differences, affirmative action, etc.

  9. 5 out of 5

    Nicholas

    Pure Sowell. Same as usual. Stop interfering. Let people do what they want cause they know better than you do. Oh and things aren't as bad as everyone says. I really liked his point about traditional wives investing int he economic future of their husbands. I never thought about it that way. Probably because I never thought about it. Covers; Urban, Gender, Academic, Income, Racial, and the Third World. Quotes: "No matter how much is done to promote health, more could be done. No matter how safe thin Pure Sowell. Same as usual. Stop interfering. Let people do what they want cause they know better than you do. Oh and things aren't as bad as everyone says. I really liked his point about traditional wives investing int he economic future of their husbands. I never thought about it that way. Probably because I never thought about it. Covers; Urban, Gender, Academic, Income, Racial, and the Third World. Quotes: "No matter how much is done to promote health, more could be done. No matter how safe things have been made, they could be made safer. And no matter how much open space there is, there could be still more." "In effect, the traditional wife has been investing in her husband's career, and a divorce means that the value of that investment - made for years or even decades - can be lost to her." "One incidental consequence of this is that many of the leading independent research institutions ("think tanks") are predominantly conservative, since they can recruit leading scholars with conservative views without as much competition from the academic world as liberal think tanks have when trying to recruit leading scholars with liberal views." "The alarming statistics on their incomes so often cited in the media and by politicians count only 22 percent of the actual economic resources at [the poor's] disposal." "As of 2001 a household income of $84,000 was enough to put those who earned it in the top 20% of Americans." "Pay is not a retrospective reward for merit but a prospective incentive for contributing to production." "Input is not the measure of value. Results are." "The median age of black Americans is five years younger than the median age (35) of the American population as a whole." "Native-born citizens are obviously more familiar with the opportunities available in the society and better able to take advantage of those opportunities." "North Africa's Barbary Coast pirates alone captured and enslaved at least a million Europeans from 1500-1800, carrying more Europeans into bondage in North Africa than there were Africans brought in bondage to the United States and the American colonies from which it was formed." "Human beings learned to enslave other human beings before they learned to write." "Whatever we wish to achieve in the future, it must begin by knowing where we are in the present - not where we wish we were, or where we wish other to think we are, but where we are in fact." "In the Third World as a whole the whites outnumber the blacks." "Many a man has cherished for years as his hobby some vague shadow of an idea, too meaningless to be positively false." Charles Sanders Peirce

  10. 5 out of 5

    Andy

    There are some good points here, but they largely get overshadowed by the ideological reaching performed by the author in support of a more laissez-faire ideal. It is absolutely true that social policies can have unintended consequences, necessitating a good understanding of the issue and its causes. However, Sowell starts from the premise that the government is largely incompetent and has no real purpose in interfering in agreements between others. His laissez-faire ideal is good if we assume t There are some good points here, but they largely get overshadowed by the ideological reaching performed by the author in support of a more laissez-faire ideal. It is absolutely true that social policies can have unintended consequences, necessitating a good understanding of the issue and its causes. However, Sowell starts from the premise that the government is largely incompetent and has no real purpose in interfering in agreements between others. His laissez-faire ideal is good if we assume that people act rationally (the vast majority of the time if not always), that people have near perfect information, that perfect competition exists, that externalities do not have a negative impact on third parties, and that all parties to an agreement have equal bargaining power. If any of those assumptions are not true, then asserting the superiority of a laissez-faire system based on its efficiency is not really a sound contention. Sowell ignores or hand waves away a number of potential motivations for property regulations and zoning. Comparisons of San Francisco and New York to Houston are not really appropriate since there are different pressures for each city. Houston can afford to have no zoning requirements because it started relatively small and underdeveloped and can support a sprawling area. New York is already heavily developed with a high population density and is already quite large, making sprawl less useful. While the price of housing can be linked to supply and demand in these locations, the constraints facing each are not the same. Therefore, simply removing zoning laws is unlikely to significantly lower housing prices in New York, but it will likely increase congestion if density increases. Similarly, building more roads is not a realistic option in a significantly developed city like New York. Further, cities have additional concerns with regard to the capacities on public services and environmental issues that may necessitate zoning restrictions even in the face of rising housing costs. This is a trade-off that is appropriate for a government because it must worry about the well being of groups which may be hindered by individual actions. The unregulated development in Houston also looks less appealing after the devastation of Harvey, especially with the contamination from refineries and the development of flood plains. Finally, Sowell is inconsistent with regard to the value of communities as he condemns eminent domain for destroying communities while also condemning individuals from using zoning regulations to protect communities by noting that individuals don't buy community attributes, they only buy properties. This is a confusing issue since, if community attributes are not bought they shouldn't be considered part of the value of a property, but if they are a valuable asset of a piece of property, then we should allow owners of those properties to protect that asset. I had two issues with the gender chapter. Firstly, Sowell notes that women may suffer from career discontinuity because of families, which is likely to hurt them in careers like nuclear submarine officer and combat pilot. Women weren't allowed to serve on submarines until 2010 and the first class of female submariners were not assigned to a sub until 2011. The first female nuclear submarine officer was not named until 2018. This may be a pedantic point, but it makes the research seem sloppy. Sowell also asserts that women invest in their husband's career, which explains both the pay disparity for married women and also negates the impact because women get to spend their husband's checks as well. However, he offers no proof that this is indeed what occurs despite spending the book condemning interventionists for failing to empirically prove their beliefs. It is equally plausible that employers pay married women less based on assumptions that they will be less committed to their job and pay married men more based on assumptions that they need to support a family. Unintentional discrimination is, therefore, plausible, and I've offered as much evidence in support of my interpretation as Sowell has for his contention that women invest in their husband. The income chapter was generally useful to me since I wasn't aware of the overwhelming use of household wealth, though it was a bit confusing because Sowell notes that wealthier individuals are more likely to establish separate households, but then uses evidence to show that, in fact, poorer homes have fewer individuals. It seems like he's arguing against his own evidence here. My one issue is with the idea of high paid executives receiving that compensation because they add significant value to their companies. With the exception of one quote from a Washington Post employee, Sowell doesn't offer any empirical evidence that higher paid executives actually produce better results consistently. I know that "execs are paid their value" is a common talking point from free marketeers, but I've never seen any empirical analysis that actually proves the execs consistently outperform market expectations in a way that would justify that pay. Sowell does make some interesting points about racial disparities, but he loses it with his claim that the riots in the 60s couldn't have been about racism or economic issues. He seems to imply that the riots were due to some inferiority in black people while failing to even mention the causes of the Watts and Detroit riots, both of which began in response to police actions that were seen as oppressive from organizations which were viewed as racist because of prior interactions. The Kerner Report pointed out significant (though minority) racial animus in the police departments at issue. This, combined with segregation and housing quality disparities due to redlining, created the conditions that resulted in riots. The Kerner report at the time identified all of these issues and was deemed radical because of it. To fail to even mention these issues makes it seem like Sowell just wants to ignore real issues in favor of blaming black culture and it undermines his claims of just following facts. Sowell makes good points about the importance of internal issues with regard to development. However, he ignores any role that the US and other European powers have had in sustaining and installing corrupt and incompetent leaders in other countries. Iran and much of South America had their governments destabilized and had strongmen supporting the US installed in power. Where strongmen already sympathetic to the US existed, they were supported against popular attempts to remove them. Therefore, saying external factors are less importance is a bit disingenuous since those external factors had significant impact on the important internal factors. As for why Spain and other European powers were able to conquer colonies, it really is inaccurate to say it was all wealth and industriousness. There are substantial historical studies of these issues. For instance, Cortes was able to defeat the Aztecs because he appeared during a festival and was allowed to enter the city since he was not deemed an enemy. By the time his hostile intentions were known it was too late to rally a defense. This was a cultural issue in which the Aztecs trusted others in the area to not engage in secret attacks during these times. Cortes took advantage of it, but it was luck on his part that he ran into this situation. Had the Aztecs been distrustful it's likely that Cortes and his men would have been slaughtered. Similarly, disease paved the way for European colonization of North America by killing 90% or more of Native Americans. Overall this book raises interesting issues. However, the areas where Sowell omits key contextual information or hand waves away serious concerns undermine his stated goal of following the facts. Sowell himself also fails quite frequently to meet the standard of evidence that he holds others too. He frequently condemns reliance on statistical correlations as evidence before turning around and claiming proof of his position based on statistical correlations. Despite the important issues raised, the ideological lens obscures what could have been an important discussion.

  11. 4 out of 5

    Joel

    This book is quite a bit drier than I remember Basic Economics being. It did pick up in Chapters 5, 6, and 7 about income, race, and third-world countries, respectively. I did find that Sowell sometimes picked a weaker form of an argument when he could have been a lot more convincing. I think you really need to read Basic Economics first to understand his method of thinking, and then it will make a lot more sense. I think this book - especially the earlier parts - takes for granted that you under This book is quite a bit drier than I remember Basic Economics being. It did pick up in Chapters 5, 6, and 7 about income, race, and third-world countries, respectively. I did find that Sowell sometimes picked a weaker form of an argument when he could have been a lot more convincing. I think you really need to read Basic Economics first to understand his method of thinking, and then it will make a lot more sense. I think this book - especially the earlier parts - takes for granted that you understand his approach to economics. I did like some of the central ideas, which as I mentioned, are a lot more clear when you've read Basic Economics. I think if there's one idea that sums up this book, it's that statistical categories don't give the best picture of what's really happening in an economy. You really have to examine how individuals act within the economic system. For example (Chapter 7), it's easy to point to the fact that the riches countries and the poorest counties are farther apart in terms of GNP, but when you compare the SAME counties over time, most of them have moved closer. Similarly (Chapter 5), statistics show that people in the top few percent are now earning more compared to the lowest few percent, but when you look at INDIVIDUALS over time, most are doing better than they ever have. I did find some of his minor points to be very insightful. For example, the chapter on education made a very good point: policy makers are measuring success in education wrong; they are measuring INPUTS rather than OUTPUTS. His example of the University of Colorado's law school was a good one: their graduates passed the bar exam at higher rates at a lower cost, but the law board was threatening to not recognize them because they didn't have enough law books in their library (I'm not remembering the details exactly, but it was something like that). Though I did find the rest of the chapter somewhat weak. His chapter on race was also especially enlightening. Sowell makes a very compelling case that what looks like racial bias or discrimination is very often a result of people - both minorities and majority members - making rational economic decisions rather than the result of sinister or hateful motives. Overall, a very good book, but it was a little dry, and it must be read after Basic Economics, or you'll miss some of his more nuanced points.

  12. 4 out of 5

    David

    This is a brilliant book. The writing is uncomplicated even when dealing with complex issues. Thomas Sowell tackles economic issues that effect many of us in the course of our lives and breaks them down to the point where we can clearly see the simple choices that people make and how dynamically that impacts our society. This is not dry reading. This is not boring at all. Everyone "knows" that Homes in california cost ten times more than homes in the midwest. But in 1975 the average cost of a home i This is a brilliant book. The writing is uncomplicated even when dealing with complex issues. Thomas Sowell tackles economic issues that effect many of us in the course of our lives and breaks them down to the point where we can clearly see the simple choices that people make and how dynamically that impacts our society. This is not dry reading. This is not boring at all. Everyone "knows" that Homes in california cost ten times more than homes in the midwest. But in 1975 the average cost of a home in Topeka, Kansas was the same as a house in Palo Alto, Califorina. Find out what happened in 1976 that caused the housing costs in California to skyrocket. Why do College tuition costs go up every year at a pace greater than the rate of inflation? Find out what the president of Fort Hays state university in Hays, Kansas did that actually lowered the cost of tuition and grew the student population. This is an enlightening book that taught me something very fundamental and important. Most Economic problems are not difficult to solve. They usually have a very straightforward solution. But that choice usually demands a certain amount of sacrifice, pain or responsibility that many people and most politicians don't want to endure.

  13. 5 out of 5

    Robert

    This was a very interesting book that challenged many preconceived notions and sacred cows that continually arise in social and economic debates. The volume of evidence cited for the author's arguments made this book both exhausting to read and difficult to dismiss. While reading this book, I felt like I was back in my economics classes where the professors constantly asked the students to look deeper and not simply react to a statistic, but to really understand what factors shaped the data. Rega This was a very interesting book that challenged many preconceived notions and sacred cows that continually arise in social and economic debates. The volume of evidence cited for the author's arguments made this book both exhausting to read and difficult to dismiss. While reading this book, I felt like I was back in my economics classes where the professors constantly asked the students to look deeper and not simply react to a statistic, but to really understand what factors shaped the data. Regardless of anyone's agreement or disagreement with Sowell's conclusions, his methods are precisely what is needed to truly understand the world. So often genuine critical thinking is replaced with acceptance of popular biases that have become essentially political and social dogma. Overall, this is a book that questions the veracity of modern beliefs and sheds some light on the origins of oft-quoted statistics. If this book demonstrated nothing else, it was that a statistic by itself is meaningless if one does not adequately understand the broader context of an issue or the relevant factors that influence the numbers.

  14. 4 out of 5

    David

    If you have previously read anything by Thomas Sowell, you know you are in for an interesting read. First of all, he knows economic theory inside and out. Second, he is a talented and experienced writer who knows how to convey what could be complicated ideas in a very understandable format. Third, he can actually make economics interesting so that you will learn something. In this book, Economic Facts and Fallacies, Dr. Sowell shows how the old adage came about: Figures don't lie, but liars can If you have previously read anything by Thomas Sowell, you know you are in for an interesting read. First of all, he knows economic theory inside and out. Second, he is a talented and experienced writer who knows how to convey what could be complicated ideas in a very understandable format. Third, he can actually make economics interesting so that you will learn something. In this book, Economic Facts and Fallacies, Dr. Sowell shows how the old adage came about: Figures don't lie, but liars can figure. He shows how by being selective when picking numbers to make your point can be a challenging task, especially when you intend to blur reality and come up with something obscure that is difficult to refute, until you get to the bottom of where the numbers come from and what they are based on. Dr. Sowell is a master at decoding how people can pick numbers to prove whatever they want and explaining why they are wrong and don't stand up to critical review. You'll probably have trouble accepting numbers at face value after this read.

  15. 5 out of 5

    thewestchestarian

    This book lacks the increasingly popular long subtitle that most non-fiction books now sport; I would like to suggest “In Defense of the Wealthy”. Over this dense “an economist looks at…” collection of analyses of popular politic topics was a challenge to push through but worth the excursion so some degree. The advertising copy for this book includes the phrase: “Writing in a lively manner…” – I believe this would be the first fallacy. An early section of the book deals with property rights and I This book lacks the increasingly popular long subtitle that most non-fiction books now sport; I would like to suggest “In Defense of the Wealthy”. Over this dense “an economist looks at…” collection of analyses of popular politic topics was a challenge to push through but worth the excursion so some degree. The advertising copy for this book includes the phrase: “Writing in a lively manner…” – I believe this would be the first fallacy. An early section of the book deals with property rights and I was left with the distinct impression that Sowell may have recently been turned down for a variance by his local zoning board. Sowell feels that environmental concerns have unnecessarily eroded property rights in the U.S. and suggests that some 90% of U.S. land lies nearly criminally underdeveloped. I assume his 90% figure includes the deserts of the Southwest and the Arctic tundra of Alaska (I hear there is a lot of scrub-grass left in Montana as well). If he were to consider only those parts of the country where large numbers of people actually live, he might see the need for more centralized efforts at controlling suburban sprawl and for conservation of underdeveloped areas for future generations. To his credit he does rail against the increasing loose interpretation of eminent domain which has recently been interpreted to allow the dislocation of communities in favor of shopping malls. It is an easy target but one that needs to be assailed. Another early section actually fulfills the promised of the book’s title by reviewing the economics involved in higher education. Sowell demonstrates that colleges claim to be bastions of innovation while forcing students to spend four years attaining a degree no matter what the field and by largely using instructional methods (lecturer in front of a chalkboard) which haven’t changed in better than 125 years. He shows how the institutional accreditation system is designed to, and is extremely effective at, keeping tuitions high and competition low. He also covers other rigging of the system such as college presidents and other officials billing the university for personal costs, professors requiring book they authored to be purchased and admissions offers receiving kickbacks from student loans organizations. A particularly illuminating passage demonstrates how professors are incented not to be very good teachers. This disincentive grows with the prestige of the school such that instruction at Ivy-League schools may actually be on par with the local community college Having defended the rights of property holders but then assailing Ivy-leaguers, Sowell returns to defend the rich by exposing the fallacy (as he sees it) of an increasing division of wealth in the U.S. Sowell notes that today’s poorer classes enjoy amenities that the poor of 1971 (not sure why this year was particularly salient) could only envy from afar. He doesn’t compare how the wealthy of the two eras compare. Certainly the rich of 1971 would look at accouterments such fractional jet ownership, a doubling of house square footages and exclusive gated communities and feel some pangs of jealousy. Sowell complete ignore the point in a section where he defends outsized executive compensation by comparing it to outsized entertainer or sports star compensation. A TV star or baseball player is judged by objective measures while executive employment contracts often go to great lengths to avoid such objectivity. Actors and basketball players also don’t normally have much say in who owns the studio or team and thus sets their pay while executives often are able to staff Boards with favorable directors. Sowell also feels that the increasing CEO/average work pay gap is a fallacy by saying Boards have a right to pay what they feel is just compensation for contributions at all levels. But why has the multiple between the CEO and average worker expanded so much? Are CEOs really so much more important in 2008 versus 1960 relative to the front-line employee? Sowell never does discuss how this could be the case. Also on the topic of pay, Sowell jumps into the gender-wage gap debate showing that it can be demonstrated that women are paid a percentage of what men earn but that this gap rapidly evaporates as confounding factors are controlled for. He concludes pay discrimination is the fault of both nature, which put the responsibility for childbearing on women, and society, which expects that women will continue to shoulder the lion’s share of that responsibility after birth. However, women should not complain too loudly as Sowell cites results that suggest that somewhere above 80% of dollars spent in the typical household are the result of decisions made by wives. On a personal note, my favorite statistic in the book was that households with female children spend 70% more on appearance (clothing, cosmetics, etc.) as compared to households with boys. Having done some chapters on gender, Sowell feel compelled to cover race. I struggled to understand what his historical review of slavery has to do with economics. He also reviews the genesis of race riots in large cities. His contention that cities with officials less tolerant of demonstrations also have fewer riots is a little Orwellian. Overall, if the book didn’t have the discussion on colleges, I would have seen it as largely a defense of the privileged through economic theory. However, there were enough insightful spots to make it worthwhile.

  16. 4 out of 5

    David Schultz

    My friend said this book changed his life when he read it in college and that Thomas Sowell is a hero. I enjoyed the thoughtful and logical discussion of some popular issues.

  17. 4 out of 5

    Kenny Cranford

    Great book - started off slow but really picked up in the last half. Sowell is a very bright guy and combed through many, many books and articles to write this book. The notes/appendix section is over 10% of the book! His writing style is very preachy but I enjoyed his insights and anecdotes. His chapters on income, race, and "third world" countries were the most interesting and the most controversial. On the income front, he does a good job dispelling the myths that the middle class is shrinkin Great book - started off slow but really picked up in the last half. Sowell is a very bright guy and combed through many, many books and articles to write this book. The notes/appendix section is over 10% of the book! His writing style is very preachy but I enjoyed his insights and anecdotes. His chapters on income, race, and "third world" countries were the most interesting and the most controversial. On the income front, he does a good job dispelling the myths that the middle class is shrinking and illustrates how much standard of living is increasing across the board. I especially enjoyed his points on part time vs full time earners and the transient nature of people in the top and bottom income brackets. Another strong point he makes is defending the "greed" of corporate executives compared with actors, musicians, and other celebrities. Racially he breaks most fallacies down to differences in education and age while arguing against "employment discrimination and ghetto environments. For third world facts and fallacies Sowell rejects the way most countries distribute foreign aide and the myth of colonial exploitation. I enjoyed this paragraph: "Exploitation is a virtually perfect political explanation of income differences. It validates whatever envy or resentment may be felt by people with lower incomes toward people with higher incomes. It removes whatever stigma may be felt from implications of lower ability or lower performance on the part of those with lower incomes. It locates the need for change in other people, rather than imposing the burdens of change on those who wish to rise. More, it replaces any such task with a morally uplifting sense of entitlement. Whatever the empirical and logical problems with the theory of exploitation, political movements are seldom based on empirical evidence and logic." In general, this book makes a strong case against the notion that "third-party observers know better what is good for people than those people know themselves". When dealing with this kind of thought (read liberalism), he suggests doing 3 things: 1. Make that implicit assumption explicit 2. Demand proof of that superior knowledge 3. Point out how many disasters in countries around the world have followed in the wake of programs and policies based on that assumption. Highly recommend this quick read for those looking to dispel many of the flaws being circulated in our American society today.

  18. 4 out of 5

    Jake Pointer

    When reviewing this book, The Economist had this to say 'Thomas Sowell marshals his arguments with admirable clarity and authority. There is not a chapter in which he does not produce a statistic that both surprises and overturns received wisdom'. I wholeheartedly agree. In essence, this short book evaluates six common economic subjects where certain beliefs surrounding these subjects have become widespread. It puts these beliefs to the test by seeing how they stand up against the facts. Needles When reviewing this book, The Economist had this to say 'Thomas Sowell marshals his arguments with admirable clarity and authority. There is not a chapter in which he does not produce a statistic that both surprises and overturns received wisdom'. I wholeheartedly agree. In essence, this short book evaluates six common economic subjects where certain beliefs surrounding these subjects have become widespread. It puts these beliefs to the test by seeing how they stand up against the facts. Needless to say that many of these beliefs are exposed as fallacies and Sowell exercises this seemingly with ease, armed only with basic and yet unknown facts. The first point to note is that is book is highly accessible. You do not need a degree in economics to understand the content. This credible aspect of the book is not to be underestimated. What quickly becomes apparent when reading is that there is a significant number of people who believe they understand economics when in fact they have little idea of what they are talking about. This is evident when common and yet false assertions are made. As a result, this book would be ideal for such people; it certainly helped enlighten me on various areas which I was uneducated on before. The second point is the book covers six topics in which the majority of people probably have at least some interest or are involved in. The chapters are as follows: urban facts and fallacies (F&F), male-female F&F, academic F&F, income F&F, racial F&F and 'Third World' F&F. The majority of people are not economists but are involved in several aspects of the economy; indeed without individuals there would be no economy at all. In this regard, readers will likely find at least one chapter that relates to their own economic activity. If you live in the city, for instance, the urban chapter may be particularly relevant. If you are male or female the male-female chapter will interest you (in other words it should interest everyone). There are other aspects of the book that add credibility immediately to the arguments. For a start, call me old fashioned but I like to get my information from experts in the field; I probably would not go to a psychiatrist for guitar lessons for example. As Sowell is an accomplished economist, I would trust him over somebody who just lives in a city when it comes to urban economic issues as an instance. Secondly, everything in the book is cited and, not only that, it is cited using credible sources. This very simple practise seems to have somewhat gone out the window recently. For example, if we compare citations between this book and The Good Immigrant (which I recently reviewed), the difference is quite obvious. In the latter, claims were often made with either no citation or a questionable source such as a newspaper or blog etc. which in my estimation is not good enough. As a result, individuals interested in more concrete and rigorous arguments should shift their attention to books like the one being reviewed here. What especially stands out is how easily Sowell dissects some of these very common beliefs. For instance, pay gaps are an assertion he attends to more than once. After reading this book, I would say a pay gap is usually summarized using the following formula 'Group X's gross income is more than Group Y's gross income, therefore Group X must be oppressing/discriminating against Group Y'. This is an example of an economic issue that is thought to be easily understood and is yet much more complicated than it appears. Sowell clearly explains how many other factors are not taken into account when using this formula such as which jobs different groups are taking, how many hours they are working, age of retirement, cultural influences, education levels, geographical considerations and so on, all of which are backed up by all sorts of surprising and thought-provoking data. Another example is the chapter on the 'Third World'. It's usually the case that Western nations believe giving financial aid to other countries is a good thing to do, and I would have agreed with this. Oftentimes the legacy of colonialism is blamed for the West doing well and everywhere else doing not so well. But once again this argument is not particularly robust once the facts are brought in. Factors such as culture and geography of 'Third World' nations are rarely taken into account. One of the more meaty arguments made by Sowell is that the governments of many of these countries are affected by high levels of corruption. If that is the case, why would one assume giving these governments money assist in their development? This is not to say colonialism has not played any part at all, but rather that to point at one of several possible factors and place all the blame here is simply not accurate. If there is one criticism I would make it is that sometimes the book can be a bit dry. As one can imagine from the title, facts are often coming thick and fast. Some humour is used here and there to help ease this but a little more would have been ideal. It can feel at times like you are reading an academic journal article, which most people would probably agree can be informative but not necessarily fun. To summarize, this book concisely, articulately and convincingly lays out many often-heard claims and then puts them to the test. The claims are like sheets of paper put through a shedder, only instead of blades, the device is made up of facts. If the paper makes it through in one piece it means the claim is valid, if it arrives shredded to pieces (which most of them do) it can be considered a fallacy and disposed of. I am a big fan of books like these. No prior economic knowledge is needed, just an open mind. After reading this book, some of your economic beliefs may be in tatters, but this is a good thing, it means you will now have far less nonsense getting in the way of your worldview. Finally, this book champions two key skills which everyone benefits from when used properly, 1) critical thinking and 2) multivariate analysis; in other words, looking at an issue from all angles before making a conclusion. If those are skills you value then this book is certainly worth a read!

  19. 5 out of 5

    pavana Kumar Varanasi

    key takeaways are: 1)Ancient Rome had a population similar in size to that of Dallas today 14 but living in an area only two percent of the size of Dallas. so cheaper transportation costs of 20th century made more people to go out and stay in suburbs than was the case in last century. 2)In 1901, housing costs took 23 percent of the average American's income. By 2003, it took 33 percent of a far larger income. In California, where government interventions in housing markets have been especially perv key takeaways are: 1)Ancient Rome had a population similar in size to that of Dallas today 14 but living in an area only two percent of the size of Dallas. so cheaper transportation costs of 20th century made more people to go out and stay in suburbs than was the case in last century. 2)In 1901, housing costs took 23 percent of the average American's income. By 2003, it took 33 percent of a far larger income. In California, where government interventions in housing markets have been especially pervasive, the proportion of income required for housing has increased even more steeply, in an even shorter span of time: 3)Three-quarters of the land in the california is legally blocked from development. With such a severe restriction on supply, high land prices were virtually guaranteed 14 and therefore also high prices for the housing built on that land. It is not uncommon in California for the land to cost far more than the housing that is built on it. 4) in america as of 2005, only 5% of the land developed leaving out 95% for other purposes. 5)One of the biggest fallacies about academic institutions is that attendance at big-name colleges and universities is virtually essential for reaching the top in later life. 6)As for students, not only has tuition been rising faster than the rate of inflation for decades, colleges and universities routinely engage in price discrimination that would get a private business prosecuted under the antitrust laws. 7)It is an undisputed fact that the average real income 14 that is, money income adjusted for inflation 14 of American households rose by only 6 percent over the entire period from 1969 to 1996. That might well be considered to qualify as stagnation. But it is an equally undisputed fact that the average real income per person in the United States rose by 51 percent over that very same period.2 How can both these statistics be true? Because the average number of people per household was declining during those years. 8) Concern over poverty is often confused with concern over differences in income, as if the wealth of the wealthy derives from, and is the reason for, the poverty of the poor. 9)To say that the bottom 20 percent of households are "falling further behind" those in the upper income brackets 14 as is often said in the media, in politics, and among the intelligentsia 14 is not to say that any given fleshand- blood individuals are falling further behind, since most of the people in the bottom 20 percent move ahead over time to rise into higher income brackets. 10)Perhaps the biggest fallacy about the history of racial and ethnic minorities is that the passage of time reduces the hostility and discrimination they face. In many countries, minorities have faced greater hostility and discrimination in a later period than in earlier periods. In other countries, the reverse has been true. But the passage of time alone does not automatically produce either result. 11)Racism became a justification of slavery in a society where it could not be justified otherwise. racism is in existent even in communities of same race. 1) Many of the factors behind economic differences between different regions of the world have their origins in geography, for which neither the rich nor the poor can be blamed. 2) Although we tend to think of geography as fixed, what human beings can do with a given geographic environment changes over time as knowledge and experience grow, so that the advantages and disadvantages of particular environments, both absolutely and relative to other environments, can change profoundly over time. 3)Waterfalls were not natural resources, but simply impediments to travel on waterways, before people invented water mills and later hydroelectric dams. Thus the relative geographic advantages and disadvantages of different regions that had, or did not have, waterfalls changed and therefore changed the prospects for prosperity or poverty for the inhabitants of those regions. 4)The presence or absence of petroleum, uranium, or other mineral deposits likewise had entirely different economic effects on the relative prospects of different regions and their inhabitants before and after ways of using these things became known. 5)Similarly, peoples living on isolated islands in seas around the world have been cut off from the cultural interactions necessary to participate in the general advances of the human race. The indigenous people of the Canary Islands were of a Caucasian race, living at a stone-age level, when the Spaniards discovered them in the fifteenth century. So were the Australian aborigines on their isolated island-continent on the other side of the world before the British arrived. Geographic isolation has had a negative, and sometimes devastating, impact on economic and cultural development, whether that isolation has been absolute in some cases or relative in others. 6)Because climates usually vary more from north to south than they do over equal distances from east to west, knowledge of particular crops or the domestication and care of particular animals can travel far greater distances from east to west than from north to south. Such knowledge could travel all the way across Asia to places at similar latitudes in Europe but knowledge of the flora and fauna in the temperate zone in South America could not travel a similar distance to the temperate zone in North America because they are separated by a wide tropical zone where the flora and fauna were different. 7)There are some extremely rich Saudis as a result but, for the country as a whole, its real income per capita is approximately half that of Singapore, which has virtually no natural resources, except for its harbor, and even has to import its water from Malaysia. Israel, which has no significant amount of oil, has a higher real income per capita than most of the oil-rich Middle East countries 8)Geographic accessibility to the advances of the rest of the world seems to have had more effect on economic development than the possession of rich natural resources. 9)Argentina has fewer people per square mile than the United States but has a per capita real income that is only a fraction of that of Americans. India has a population per square mile that is several times that of either Argentina or the United States 14 but not quite as many people per square mile as Japan, which has a far higher real income per capita than India. 10)Argentina has been described as "among the world's most richly endowed countries," with "some of the world's richest soil" and "substantial oil and natural gas deposits. Early in the twentieth century, it was one of the ten richest nations in the world. Much of its modern development, however, was not internally generated but was due to foreign, mostly British, initiative. The rise of nationalistic and ideological politics, especially under the charismatic leadership of dictator Juan Peron, led to a decline of foreign investment in Argentina from a high of 48 percent of all investment in 1913 to just 5 percent by the 1950s. Counterproductive domestic political and economic policies marked Argentina's fall from the ranks of the most prosperous nations. As one study put it: "The countries with which Argentina was grouped in terms of economic progress early in this [twentieth] century have attained per-capita GNPs generally four or five times Argentina's, and virtually all of them are viable democracies." By the end of the twentieth century, Argentina's economy and monetary system had collapsed, leading to widespread use of barter. Despite some recovery from that low point, Argentina's gross domestic product per capita in the early twenty-first century was one-tenth that of the United States.

  20. 5 out of 5

    McBiscuits

    In economic facts and fallacies, Thomas Sowell talks about the different misconceptions that people make about economics. There are a lot of interesting points made about why we think this and what we should actually do. A good example of this is the chapter about cities. The author talks about housing and how it is expensive because the government got involved. I would recommend this book if you like economics. It requires basic understanding of economics to get some concepts.

  21. 4 out of 5

    John Burns

    Another powerful and brilliant non-fiction book from the highly influential writer Thomas Sowell. I enjoyed this more than A Conflict of Visions: Ideological Origins of Political Struggles. That book was this huge summary of many different works of Socioeconomic literature and the whole thing felt kind of bogged down in academia, intellectualism and abstraction. This one reminded me more of Basic Economics: A Citizen's Guide to the Economy where Sowell sets his sights less ambitiously on some ve Another powerful and brilliant non-fiction book from the highly influential writer Thomas Sowell. I enjoyed this more than A Conflict of Visions: Ideological Origins of Political Struggles. That book was this huge summary of many different works of Socioeconomic literature and the whole thing felt kind of bogged down in academia, intellectualism and abstraction. This one reminded me more of Basic Economics: A Citizen's Guide to the Economy where Sowell sets his sights less ambitiously on some very fundamental concepts of economics and attempts to clarify some typical misconceptions. As with Basic Economics, I felt like he managed to change my mind about lots of things. For example, I think I fell in with a fairly conventional view that there is something obscene about CEOs being paid millions for their work but Sowell makes the unassailable point that if a CEO can make decisions that net millions of dollars (compared to the decisions that another person might make) then having him on board is probably worth millions to the company and its stockholders. Similarly, while it may seem outrageous to pay huge leaving bonuses to CEOs who have lost lots of money, when the only legal alternative is to keep them in house, potentially losing even more money, then the big bonus payout seems comparatively reasonable. This is the basic gist of Sowell's work. He listens with disbelief while people around him expound received wisdom and intuitive ideas about economic situations and then he challenges them to think about the actual situation and what the actual alternatives are. Too often I think people fall into fanciful thinking, assuming that situations are really very simple and can be taken in hand and sorted out with common sense when in fact every economic situation is full of idiosyncracies which would stymie any crude, simplistic approach. Sowell adresses various fallacies like the fallacy of the gender pay gap. Sure there is a gender pay gap. But why shouldn't there be a gender pay gap? We pay people more to work longer hours, to work consistently for years on end without taking time off, to invest in work above all other possible commitments, to do work that is dangerous or uncomfortable or tedious, highly technical, bewilderingly abstract and often unsociable. It takes a very specific kind of person to agree to work on those terms. Such people will be paid higher wages than those who don't agree to those terms. Why on earth would we assume that such people would be equally distributed among genders? Or even among different races, different cultures, different nationalities? Are all these groups the same and equally constituted of the same kinds of people living in identical situations? Of course not. So why run straight to "discrimination" as the default explanation whenever income disparities occur between groups? Do women want to be paid as much as men? Of course. Are they equally as willing to follow the same working patterns and commitments as men in order to earn that pay? Hell, I don't want to devote years of my life to studying petro-chemical engineering. I don't want to work 70 hour weeks. If that's what it takes to earn a good wage then I'm not sure I envy the people who do. For me the peculiarity in income disparities is not that they occur between groups but that there is anyone at all who is willing to do what it currently takes to get into the top 1%. Sowell also tackles fallacies surrounding Foreign Aid. Foreign aid earned a good reputation when aid money was used after WWII to help war-torn european countries get back on their feet. But to assume that foreign aid today will have the same effect on third world countries as it did on Europe in the mid 20th century is to ignore the fact that Europe had a radically different culture to the third world countries of today. Europe was a technological and intellectual world leader before its resources were wrecked. Their wealth may have been destroyed but the culture and knowledge that generated that wealth to begin with was still there. Sowell is of the opinion that a culture that knows how to generate wealth is a lot more important than natural resources. We can see the truth in this when we think of countries like Venezuela which are oil rich but where most citizens live in poverty. Compare that to a country like Japan which has rather poor natural resources but has been one of the wealthiest countries in the world for over a century. You'll see a similar pattern occuring amongst countries (e.g. The Ivory Coast) that kick out their colonial "oppressors" only for their economy and standard of living to decline afterwards because the people of that country don't have the same culture and values that their colonial leaders had used to keep law and order. You can also see the economic prosperity of some countries improve when immigrants with specific knowledge and culture move in and start generating wealth, as in the case of Welsh immigrants bringing their knowledge of mining to Australia, Jewish immigrants bringing their garment making skills to various countries, German immigrants bringing their wheat-growing experience to Argentina etc. etc. And you can see the opposite effect when wealth generating groups are forced to leave a given country as when Idi Amin ejected the Gujuratis from Uganda. Their property and wealth was seized by the Ugandans but the Ugandan economy still collapsed a decade later. Meanwhile the Gujuratis largely moved to the UK and rapidly prospered in that society. Furthermore, it is inaccurate to even conceive of the third world as being some fixed set of countries which are in a separate category from wealthy countries. The truth is that all countries are distributed on a spectrum of wealth. All countries were at one time "third world countries" in a sense. Some eventually rose out of this state of innate poverty, some didn't. The question is not why poverty exists but what is special about the countries that manage to rise out of the poverty that is the innate condition of the human race. There are no specific countries that are inherently third world countries. Actually countries drift in and out of that category frequently. Over a period of a few decades, the list of the 20 poorest countries in the world will change significantly. This is what his books are all about. Notions that the media promotes which are not really accurate. Sowell picks them up and sets them straight. I find this stuff fascinating. He still writes in slightly long and occasionally impenetrable sentences. It's not too bad though. I've read worse. Strongly recommended to any Economics enthusiasts.

  22. 4 out of 5

    George

    WELL DONE, ONCE AGAIN. “One of the themes of ‘Economic Facts and Fallacies’ is that fallacies are not simply crazy ideas but in fact have a certain plausibility that gives them their staying power-and makes careful examination of their flaws both necessary and important, as well as sometimes humorous.”—from the www.goodreads.com synopis. Thomas Sowell is the epitome of an oxymoron. Not only is he a high school dropout with a PhD; he is also one of those rarest of strange persons, a rational econom WELL DONE, ONCE AGAIN. “One of the themes of ‘Economic Facts and Fallacies’ is that fallacies are not simply crazy ideas but in fact have a certain plausibility that gives them their staying power-and makes careful examination of their flaws both necessary and important, as well as sometimes humorous.”—from the www.goodreads.com synopis. Thomas Sowell is the epitome of an oxymoron. Not only is he a high school dropout with a PhD; he is also one of those rarest of strange persons, a rational economist. His no-nonsense commitment to objective reality has made him a champion of libertarians everywhere and a five-star hero in my book. It’s nice to have someone this brilliant on the side of reason, for a change. While I’ll admit to falling short of understanding all of the concepts presented in his book, his premises remain rock solid. Perhaps I should have read, or listened to, his ‘Basic Economics: A Citizen’s Guide to the Economy,’ first. I’ll add it to my ‘to-read’ shelf, though. Better late than never. A word here about the audiobook edition, read by Jeff Riggenbach, another light of the libertarian movement. With Jeff’s mellifluous tones, combined with the depth of the subject matter, perhaps this audiobook should come with a caution label: WARNING: LISTENING MAY CAUSE DROWSINESS. DO NOT LISTEN WHILE OPERATING MACHINERY. Recommendation: But do, indeed, read or listen to this book for insights into classical liberalism. Overdrive MP3 Audiobook, (listened to on both iPad and iPod) on loan from http://overdrive.colapublib.org

  23. 5 out of 5

    Chuck Engelhardt

    Sowell is not Levitt & Dubner, their book is a fun read; however, Sowell does have the same ability to take "conventional wisdom" and peel away the superficial layers to get to what's really happening underneath. He focuses on the results, not simply the intent. Andy Stanley wrote, "It is our direction, not our intention, that determines our destination" (Principle of the Path - Highly recommended) and in Economic Facts and Fallacies, Sowell shows how our intent, coupled with misunderstanding of Sowell is not Levitt & Dubner, their book is a fun read; however, Sowell does have the same ability to take "conventional wisdom" and peel away the superficial layers to get to what's really happening underneath. He focuses on the results, not simply the intent. Andy Stanley wrote, "It is our direction, not our intention, that determines our destination" (Principle of the Path - Highly recommended) and in Economic Facts and Fallacies, Sowell shows how our intent, coupled with misunderstanding of our direction, leads to unintended consequences. In addition, he demonstrates how many systems actually provide a disincentive for course correction. I learned a lot from this book. Those who expect a "balanced" look at capitalist & socialist policies will be sorely disappointed. This book isn't about "balance," it's about what works and what doesn't. Understand the structure of the book is to identify common fallacies and then show the why and how they lead to the unintended consequences. If a policy works, whether capitalist or socialist, then it would not fall into the fallacy category and he doesn't address it. Sowell is a free market economist and that is clearly the tenor of the book.

  24. 5 out of 5

    Toby

    Good basic stuff here. Great chapters on the differences between men and women in the economy, race and economy, and the third world and economy. He's adequately hard on "third parties" intervening into situations where two parties will do. But I wonder if he falls prey to one of his own fallacies (the chess board fallacy) assuming a kind of interchangeability between various parties (at least on that point). He's just not addressing the hardest questions in other words. I was also fairly impress Good basic stuff here. Great chapters on the differences between men and women in the economy, race and economy, and the third world and economy. He's adequately hard on "third parties" intervening into situations where two parties will do. But I wonder if he falls prey to one of his own fallacies (the chess board fallacy) assuming a kind of interchangeability between various parties (at least on that point). He's just not addressing the hardest questions in other words. I was also fairly impressed with how stats can be so manipulated. His point about analyzing who falls into what categories and when was very well taken. For example, he points out that in statistics that claim the median real income is stagnating or falling, there are a number of problems. Business ventures losing money or having an off year, retirees on fixed incomes, recent college grads as well as students can all get pooled into the same bracket and voila! incomes stagnate. He also noted that three-quarters of Americans whose incomes were in the bottom 20 percent in 1975 were also in the top 40% at some point during the next 16 years (p. 135). Again, while he is laying basic foundational principles and generalizations, this book does not even begin to address basic Scriptural principles of mercy, debt forgiveness, or generosity, or in other words, the duty of third parties.

  25. 5 out of 5

    Kym Robinson

    Thomas Sowell is perhaps at the forefront of conventional economics. He leads the vanguard with distinct focus and clarity. Often his books can read some what dry as he makes his point with a thoroughness which is seldom countered directly by those who could be called Statist economists. I like Sowell and have enjoyed all of his books that I have read, this one being perhaps the 'blandest'. Now I say this not to critique the man but perhaps more so as praise as to how he often delivers such compr Thomas Sowell is perhaps at the forefront of conventional economics. He leads the vanguard with distinct focus and clarity. Often his books can read some what dry as he makes his point with a thoroughness which is seldom countered directly by those who could be called Statist economists. I like Sowell and have enjoyed all of his books that I have read, this one being perhaps the 'blandest'. Now I say this not to critique the man but perhaps more so as praise as to how he often delivers such comprehensive material with readily digestible language. This book manages to do just that but at times feels lacking as a course of comparison to his other works. That being said this is an excellent read for any one interested in economics and general political philosophy. For those who are already in the Free market camp, this book is of little benefit as it merely confirms what you may already know or feel. It is however a good source for discussions or debates when ever you do need to defend your volunteerist position. It is perhaps a better read for those who have no understanding of economics or any real 'ideology'. But perhaps it is a contrarian perspective much needed for those who hold firm their convictions of acceptable economic principles whether they be loyal to a Marx or Keynes. All in all this is a good book and I most certainly recommend it. 73 %

  26. 4 out of 5

    Lynn

    This is a well written and incisive analysis of economics based on false assumptions about race, education and other major areas of society by a scholar and social commentator. Sowell turns economic issues on their heads by introducing an unorthodox way of viewing inter alia poverty and race and education. Claiming that the reasons for disparities in these areas are not salvageable by government intervention, (witness LB's "war on poverty" that only served to make the poor believe that everythin This is a well written and incisive analysis of economics based on false assumptions about race, education and other major areas of society by a scholar and social commentator. Sowell turns economic issues on their heads by introducing an unorthodox way of viewing inter alia poverty and race and education. Claiming that the reasons for disparities in these areas are not salvageable by government intervention, (witness LB's "war on poverty" that only served to make the poor believe that everything would be resolved if the government would only give more money to alleviate their straits,thus creating a permanent underclass), Sowell maintains that societal problems can not be solved by looking at them in the same old wrong way. A very interesting and insightful study by a master economist, who also happens to be a black conservative.

  27. 5 out of 5

    Ice Bear

    As the author alludes to, statistics can be used to prove opposite sides of an argument. This book makes you think about the larger issues covered, helpful if you live in the US. The main view I take is that the author has used his logic and evidence to make the 'generally held beliefs' be given a verdict of 'not proven' which probably does not sell as well as the word 'fallacy'. The complexities and multiple variables perhaps mean that any conclusions may be difficult to reach rather than just p As the author alludes to, statistics can be used to prove opposite sides of an argument. This book makes you think about the larger issues covered, helpful if you live in the US. The main view I take is that the author has used his logic and evidence to make the 'generally held beliefs' be given a verdict of 'not proven' which probably does not sell as well as the word 'fallacy'. The complexities and multiple variables perhaps mean that any conclusions may be difficult to reach rather than just pushing a 'conservative - monetary' view of the world. However we would like to use best/objective intentions, too often we are clouded by personal agenda's. The fallacy thus is thinking ourselves to be perfect in our own logic.

  28. 4 out of 5

    Sylvester

    First degree burn, cold water can't save them, they need ice cubes. Economic Facts and Fallacy is possibly one of the best works by Sowell after Basic Economics. He fired so many shots at the fallacies that they became smithereens. I especially enjoyed the attack on the widespread educational corruption. First degree burn, cold water can't save them, they need ice cubes. Economic Facts and Fallacy is possibly one of the best works by Sowell after Basic Economics. He fired so many shots at the fallacies that they became smithereens. I especially enjoyed the attack on the widespread educational corruption.

  29. 5 out of 5

    Travis

    I was unfamiliar with Thomas Sowell prior to a conservative friend handing me this book. Knowing my friend's political stance I started this book leery about its leaning. In our increasingly divided political landscape, it's unfortunate that we all carry our biases into every situation. While Economic Facts and Fallacies is clearly conservative in its opinion of government interference in each issue, it's not infuriating to read. Most of his arguments make sense, even to a more liberal person li I was unfamiliar with Thomas Sowell prior to a conservative friend handing me this book. Knowing my friend's political stance I started this book leery about its leaning. In our increasingly divided political landscape, it's unfortunate that we all carry our biases into every situation. While Economic Facts and Fallacies is clearly conservative in its opinion of government interference in each issue, it's not infuriating to read. Most of his arguments make sense, even to a more liberal person like myself. Overall, I found most of the arguments sound. I might not agree with all of Sowell's conclusions, but I appreciate the attempt to provide a counterpoint to the prevailing wisdom. As we all know, statistics can be interpreted to support almost any hypothesis. From the right perspective you can make the same numbers tell different stories. Sowell himself reiterates that every chapter. He cites a statistic and how it's used to support some government policy, then he will cite a different statistic and state that the new numbers disprove the policy and prove his notion. This is the push and pull of all statistical analysis and political thinking. You just can't escape it. So I wound up taking everything he said with a grain of salt, on both sides of each argument. The book covers six wide ranging topics: urban planning, male-female differences, academic institutions, income, racial issues, and third world issues. Since the book's title includes the word "Economic", it's no surprise each topic is tackled from a purely economic viewpoint. So while Sowell implores people to consider people as individuals rather than faceless masses, he still winds up treating them as numbers and even manages to occasionally "blame" a group for specific individuals. I agreed most with the chapter on academic institutions. There are several reasons provided as to why college tuition has skyrocketed. One of the key tenets introduced in this chapter that is reused later is that policies are too often based on judging the inputs rather than the outputs. For example, colleges are accredited based on inputs such as number of buildings or number of adjunct professors, rather than on outputs such as how many law graduates can pass the bar exam. Ultimately we care about results, yet we focus on the inputs and often don't or can't see the results. Another example is foreign aid provided to third world countries, where the amount of monetary aid provided is touted by organizations to "prove" how much they are helping, while in reality we rarely see any actual results from that financial input. I nodded along with most of the chapter on the third world, but I really have no idea how to judge how accurate any of it was. I can agree that corrupt governments will squander any aid given to them. But Sowell also cherry picks specific prosperous nations as examples of being able to turn around internal issues. This has the nice moral of saying any country, just like any person, can "pull itself up by its bootstraps," but in an increasingly globalized world a country has to be able to successfully integrate with the rest of the global economy, and sometimes prejudices against poor countries still exist to hinder that progress. The chapter on income disparity is pure economics. Sowell spends a fair amount of time saying one has to compare only comparable groups and admits that can be extremely difficult. The best notion introduced here is that the same people are often moving through categories. So when one compares the top 20% and the bottom 20% at two points in time, the actual people in those categories are different. This is relevant for something like income because it can show how people move up from the lower categories to the higher categories; we expect people to earn more later in life after gaining experience. The chapters on male-female income differences, racial issues, and urban planning are the most polarizing. Some of the claims made in these chapters are not nearly as well supported, or maybe it's just because I am predisposed to disagree with them. One egregious example in the racial chapter reads: "Determining whether economic differences between two groups as a whole are a result of discrimination is wholly different from determining whether individuals have been penalized for things they did not do and situation beyond their control." I may be wrong but I thought "discrimination" was practically defined as penalizing people for things they did not do. I can agree, though, with the comparison of costs being passed to the consumer. Costs created by criminals in a low-income neighborhood get passed to the consumer in higher prices on goods. Similarly, the less productive and more troublesome members of a specific group can cause other members of that group to pay a higher price in less opportunities. That's not to say that it's fair, but that is a good analogy to make. The difference in income for males and females is obviously a hot button topic. Sowell's stance is that when you control for differences such as education and work experience, the difference is not as great as the media makes it out to be. His main fact to support this claim is that women take time off from work to have children and often shoulder most of the domestic responsibilities. These two notions combine to make employers less likely to invest in a female employee over a male employee. Maybe it's because I saw some of this in action with my wife, who was constantly berated for taking time off work to handle our first child, but I actually see the logic in these arguments. And it might be an unpopular opinion in our current society but I agree with a wife adding value to a husband by taking a lot of mundane tasks off his plate. Again, maybe having a stay at home wife, who can handle getting kids to and from school and is already home to take care of sick children which, allows me to always show up to work and be more productive. At the same time, I am by no means the overworking male presented in Sowell's examples. At one point he cites a statistic that women are half as likely to want to continue working "extreme" jobs that require way more than the standard 40 hour work wee. To me, that speaks more to the sanity of women than the "drive" of men, and too often men will use work as an excuse to shirk domestic responsibilities. I've lost count of the number of weekend gatherings all the other fathers miss because they are working. Finally, the biggest issue with the urban planning chapter is Sowell's claims about "open space". He constantly cites a statistic that 90% of the land in the United States is undeveloped. That's great, but how much of that is in Alaska, deserts like Death Valley, and other less ideal areas for living? This seemed like a classic example of misusing statistics. It's unfortunate that it appears so early in the book since it will likely throw off a lot of people and dissuade them from continuing to the rest of the book. I would encourage anyone interested in public policy to read this book in addition to other sources. No one should settle all one's beliefs from a single source, which is the subtle premise of this book.

  30. 4 out of 5

    bartosz

    Thomas Sowell is one of my favorite authors - so I knew exactly what to expect when I started reading Economic Facts and Fallacies. The book concentrates on popular fallacies related to sex, race, income, the third world, the academia and cities. As typical with Sowell, the arguments and data are presented in a extremely clear and convincing matter. The author concentrates on very popular fallacies, most of which are relevant to this day: income inequality, rent control, unequal representation et Thomas Sowell is one of my favorite authors - so I knew exactly what to expect when I started reading Economic Facts and Fallacies. The book concentrates on popular fallacies related to sex, race, income, the third world, the academia and cities. As typical with Sowell, the arguments and data are presented in a extremely clear and convincing matter. The author concentrates on very popular fallacies, most of which are relevant to this day: income inequality, rent control, unequal representation etc. Each fallacy is explained, and a case why some might come to that conclusion is presented. Next the fallacy is dismantled and an alternative hypothesis is presented. The new hypothesis is compared against the fallacy and shown to represent the world better. Yet the process of explanation is so engaging this rigid structure is almost imperceivable. In a way, this book can be viewed as a distillation of other books such as Wealth, Poverty and Politics; Basic Economics; or Applied Economics (or a stepping stone in his research). I certainly didn't learn nothing new when reading it but as a fan I had a blast with the review. I think that Basic Economics might be a better book from the author that covers a similar area but this one has an advantage of having a laser-like focus on fallacies themselves. For me it was simply a very cozy read.

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