Economic Facts and Fallacies
Undefined words have a special power in politics, particularly when they invoke some principle that engages people’s emotions.
“Fair” is one of those undefined words which have attracted political support for various policies. While the fact that the word is undefined is an intellectual handicap, it is a huge political advantage. People with very different views on substantive issues can be unified and mobilized behind a word that papers over their differing, and sometimes even mutually contradictory, ideas. Who, after all, is in favor of unfairness? And who, after all, dares to point out the fallacies of a belief as long as it carries the “intent” for fairness?
Many beliefs which collapse under scrutiny may nevertheless persist indefinitely when they are not scrutinized, and especially when skilled advocates are able to perpetuate those beliefs by forestalling scrutiny through appeals to emotions or interests, utilizing these undefined terms that people favor.
Economic Facts and Fallacies is a book that exposes an array of widely held beliefs to logical scrutiny and evidence— evidence that is usually overlooked by parties who favor interventionist government policies in the name of fairness or equality. Time and again, readers are shown that support for expanding government control arises from mistaken reasoning and interpretation of data.
The bulk of the book consists of six chapters dealing with subjects where economic misunderstanding abounds: the urban economy, male-female comparisons, academia, income, race, and the Third World. In each of those sections Sowell rebuts a group of beliefs that are widely accepted despite their fallaciousness and incompatibility with the evidence.
Sowell is one of my favorite economic writers, not for his novel ideas, but for his presentation of the entire body of generally reasonable argument. Almost every economic fallacy repeated by ideologues such as Paul Krugman and Bernie Sanders can be found debunked in this book. The author makes empirical arguments, rather than anecdotal arguments. This is not to say I have no problem with all of the points he mentioned in the book. Since Sowell is openly conservative, some arguments 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, that is one point I would be more cautious to assume. Overall I’m fine with an author having a political bent in his writings as long as the general argument is logical and coherent. One of my favorite leftist writers Joseph E Stiglitz also tends to go off on tangents preaching leftist beliefs.
In a nutshell, this book highlights many instances where questionable if not downright foolish policy choices were made. It also illustrates the most widespread economic fallacies: The zero sum fallacy, fallacy of composition, post hoc fallacy, the chess-pieces fallacy, and the open-ended fallacies, and how skilled politicians can invoke peoples’ emotions to perpetuate the fallacious beliefs. It’s an interesting book that’s worth a read.
